2024 (9) TMI 1262 - HC - Customs

Provisional Clearance Granted for Imported Goods; Bank Guarantee Required for 50% Value Pending Investigation.

M/s. Libra Natural Resources Pvt. Ltd. Versus Union of India & Ors.

The HC ordered provisional clearance of the imported goods, requiring the petitioner to provide a bank guarantee for 50% of their declared value. The ... Classification of imported goods - whether the goods imported fall under category of silver jewellery which is freely importable or under restricted category of ITC (HS) Code 71069210? - HELD THAT:- Respondent rely upon an examination report dated 5th June 2024 to suggest that the goods are crude rounded structure made of embossed silver strips which are joined together to make it look like a bangle. It is noted that the author of the report has even put a disclaimer in the report because the author says “as per our best knowledge” Therefore, prima facie this report is not reliable because it has been prepared on the basis of visual examination and if it is based on visual examination, the author could not have used the expression “as per our best knowledge.” Moreover, he does not even explain from where so called knowledge was generated. Hence prima facie, this is not satisfying. Seizure memo, a copy whereof at Exhibit-H to the petition being Seizure Memo No. 06/2024-25 dated 7th May 2024 states that the declared value is Rs. 7,70,80,299.47. Mr. Shah states 50% of that would be Rs. 3,85,40,149.73. We shall round it off to Rs. 1,40,00,000/-. Upon petitioner giving a bank guarantee of a nationalised bank for Rs. 1,40,00,000/-, respondent shall permit petitioner to provisionally clear the goods. Petition disposed off. Issues:1. Classification of imported goods under the category of silver jewelry or restricted ITC (HS) Code 71069210.2. Provisional clearance of goods under Section 125 of the Customs Act, 1962.3. Reliability of examination report in determining the nature of the goods.4. Requirement of bank guarantee for provisional clearance.5. Deadline for completing the investigation and cooperation from DGFT.Analysis:1. The main issue in this case revolves around the classification of the imported goods as either silver jewelry, which is freely importable, or falling under the restricted category of ITC (HS) Code 71069210. The petitioner argues that the goods are jewelry or semi-finished jewelry, while the revenue contends that they are crude rounded structures resembling bangles. The examination report provided by the respondent is deemed unreliable due to the lack of detailed explanation and disclaimer by the author, raising doubts about its accuracy.2. The petitioner, invoking Section 125 of the Customs Act, 1962, seeks provisional clearance of the goods even if they are considered restricted. Section 125 allows for the release of prohibited goods upon payment of a fine determined by the adjudging officer. The petitioner proposes providing a bank guarantee for 50% of the value of the goods, as per the seizure memo, to secure provisional clearance.3. The court expresses dissatisfaction with the examination report's reliability and emphasizes the need for a more thorough investigation to determine the true nature of the imported goods. The court highlights the importance of concrete evidence beyond visual examination to establish the classification of the goods accurately.4. In line with the petitioner's proposal, the court orders the provisionally clearance of the goods upon the petitioner providing a bank guarantee for 50% of the declared value of the goods. This requirement aims to ensure that the revenue is protected in case of any future developments in the investigation.5. Lastly, the court sets a deadline for completing the investigation by 31st December 2024 and directs the DGFT to cooperate with the Customs Officer promptly. The court emphasizes the importance of timely responses and collaboration to expedite the resolution of the matter. The petition is disposed of with all rights and contentions being kept open for further proceedings.