Customs authorities must release imported friction testing machinery within one week despite pending appeal

The Bombay HC directed customs authorities to release imported friction testing machinery for home consumption within one week, despite pending appeal. The court applied the principle of judicial discipline, requiring subordinate authorities to follow appellate orders unreservedly. Since the Commissioner of Customs (Appeals) had set aside confiscation and ordered release, and no stay was granted on this order, the machinery must be released. The petitioner must furnish a bond for differential duty payment if the department's appeal succeeds. Respondents were also directed to issue waiver certificates for demurrage and detention charges. The release was ordered without prejudice to the department's rights in the pending customs appeal.

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Issues Involved:
1. Classification of imported machinery.
2. Compliance with appellate authority orders.
3. Release of imported machinery and waiver of detention and demurrage charges.

Issue-wise Summary:

1. Classification of Imported Machinery:
The Petitioner, engaged in providing Aviation and Expressway Services, imported a used Friction Testing Machine fitted in a CAR SAAB 9-5. The Petitioner declared the machinery under Chapter 90318000 but the Appraising Group reclassified it under Chapter 8705 as a Special Purpose Vehicle, deeming it prohibited under Section 2(33) of the Customs Act, 1962, and liable for confiscation under Section 111(d). The Original Adjudicating Authority upheld this reclassification and imposed penalties. However, the Commissioner of Customs (Appeals) later set aside this reclassification, confirming the machinery under Chapter 90318000, and ordered its release.

2. Compliance with Appellate Authority Orders:
Despite the Commissioner of Customs (Appeals) ordering the release of the machinery, the Respondents did not comply, citing a pending appeal without a stay order. The High Court emphasized the principle of judicial discipline, requiring subordinate authorities to follow appellate orders unless stayed by a competent court, referencing Supreme Court judgments in Union of India vs. Kamlakshi Finance Corporation Ltd. and other relevant cases.

3. Release of Imported Machinery and Waiver of Detention and Demurrage Charges:
The High Court directed the Respondents to release the Friction Testing Machine within one week, subject to the Petitioner furnishing a bond for potential differential duty. Additionally, the Respondents were instructed to issue a waiver certificate for demurrage and detention charges. The release was made without prejudice to the Respondents' rights in their pending appeal.

Conclusion:
The High Court ruled in favor of the Petitioner, mandating the release of the machinery and waiving detention and demurrage charges, while underscoring the necessity for compliance with appellate orders to prevent undue harassment and maintain administrative discipline.

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