Provisional release of imported goods: bank guarantee condition modified, with balance secured by bond and final assessment expedited.

In provisional release of imported goods pending final assessment, the Court held that the customs condition requiring a bank guarantee could be modified rather than maintained in full, where the provisional assessment framework and case circumstances warranted relief. It accepted that the department could seek bond and security under the Customs Act, but found the original guarantee demand excessive on the facts. The bank guarantee requirement was reduced, with the balance to be secured by bond, and the pending final assessment was directed to be completed expeditiously so the ultimate duty liability could be determined.

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Issues: Whether, in a case of provisional release of imported goods pending final assessment, the customs authorities could insist upon a bank guarantee of Rs. 60,00,000 in addition to a bond, or whether the requirement should be modified in light of the governing provisional duty assessment regulations and the circumstances of the case.

Analysis: The petitioner challenged only the condition requiring a bank guarantee, contending that the provisional assessment regime under the Customs (Provisional Duty Assessment) Regulations, 1963 contemplated execution of a bond and not such a bank guarantee. The department relied on Section 143 of the Customs Act to justify insistence on bond and security. On the facts, the Court found it to modify the condition rather than interfere with provisional release altogether. It also directed expeditious completion of the pending final assessment proceedings so that the parties' ultimate duty liability could be determined.

Conclusion: The bank guarantee requirement was reduced to Rs. 30,00,000, with the balance to be secured by bond, and the writ petition was disposed of with directions for early final assessment.

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