2023 (3) TMI 701 - AT - Customs

Tribunal grants appeal for re-export of goods, directing reconsideration with revenue safeguards.

The Tribunal allowed the appeal, setting aside the order refusing provisional release for re-export of goods. The adjudicating authority was directed to ... Provisional release of goods - re-export of imported goods - power to allow provisional release under Section 110 of the Customs Act - freely importable goods - mis-declaration of description, classification and quantity - samples drawn and testing by Textile Committee - safeguarding the revenue by bond or bank guaranteeProvisional release of goods - re-export of imported goods - freely importable goods - samples drawn and testing by Textile Committee - safeguarding the revenue by bond or bank guarantee - Refusal to provisionally release the seized imported fabrics for the limited purpose of re-export was unlawful and the matter must be reconsidered by the adjudicating authority. - HELD THAT: - The Tribunal found that samples had been drawn and tested by the Textile Committee and that the goods are freely importable, although there was mis-declaration as to description, classification and quantity. The appellant undertook not to contest classification, identity or quantity and had deposited an amount with the department. Applying the reasoning in Rajkamal Industrial Pvt. Ltd. and the jurisdictional High Court in Kausalya Impex, the Tribunal held that where goods are not prohibited and the investigating agency does not require retention of the goods for adjudication (samples already drawn), the discretion under Section 110 to permit provisional release must be exercised lawfully with suitable safeguards for revenue. The Tribunal concluded that refusal solely because adjudication was pending was not justified and that provisional release for re-export could be allowed subject to reasonable conditions (such as bond or bank guarantee) to protect revenue interests. The Tribunal therefore set aside the impugned refusal and directed the adjudicating authority to reconsider the request within one month from receipt of the order, imposing reasonable conditions if necessary. [Paras 15, 18, 19]Impugned letter refusing provisional release for re-export set aside; adjudicating authority directed to consider the importer's request for provisional release for re-export within one month, subject to reasonable conditions to safeguard the revenue.Final Conclusion: The appeal is allowed: the refusal to provisionally release the freely importable goods for re-export was set aside and the adjudicating authority is directed to reconsider the request within one month, permitting provisional release for re-export subject to reasonable safeguards for the revenue. Issues:The judgment concerns the request for provisional release of goods for re-export only.Details of the Judgment:Issue 1: Mis-declaration and classification of imported goodsThe appellant imported fabrics with mis-declaration of description and quantity, leading to re-determination of classification and seizure of goods. The appellant sought provisional release for re-export due to the mistake by the overseas supplier. The adjudicating authority rejected the request for re-export, stating it can only be considered after investigation. The appellant argued that the power to allow provisional release for home consumption includes re-export, citing Customs Act, 1962. The Tribunal noted that the goods were not prohibited, and the appellant had filed under FIRST CHECK due to uncertainty in classification. The Tribunal found no reason to further detain the goods, especially as samples had been drawn and tests conducted.Issue 2: Perishable nature of goodsThe appellant highlighted that the coated fabrics were perishable and would lose value if detained for a long period. The appellant referred to CBEC Circular and various legal precedents to support the argument for provisional release pending adjudication. The appellant undertook not to dispute the classification, value, or quantity of the goods, emphasizing that samples had already been tested. The Tribunal considered the arguments and observed that the goods were freely importable, and refusing re-export request was not justified.Conclusion:The Tribunal set aside the order refusing provisional release for re-export, directing the adjudicating authority to consider the request within one month, subject to reasonable conditions for safeguarding revenue. The appeal was allowed in favor of the appellant.