2025 (2) TMI 886 - HC - Customs

Bombay HC orders provisional release of seized wheat flour imports with duty bond and bank guarantee

BMS Enterprises Versus Union of India & Ors.

BMS Enterprises Versus Union of India & Ors. - 2025:BHC - AS:8298 - DB ISSUES PRESENTED and CONSIDEREDThe core legal questions considered in this judgment are:Whether the goods imported by the Petitioner under six Bills of Entry should be provisionally released.Whether the conditions imposed for the provisional release of goods under the first two Bills of Entry should be applied to the remaining four Bills of Entry.Whether the Petitioner is required to furnish a Bank Guarantee for anticipated redemption fines and penalties when no Show Cause Notice has been issued.Whether future imports of the same goods by the Petitioner should be provisionally released under similar conditions.Whether a Detention-cum-Demurrage Waiver Certificate should be issued for the six Bills of Entry.How the typographical error in the Bill of Entry Number should be corrected in the judgment.ISSUE-WISE DETAILED ANALYSISProvisional Release of GoodsThe legal framework involves the Customs Act, 1962, which governs the import and export of goods in India. The Court considered whether the goods imported by the Petitioner should be provisionally released pending adjudication. The Petitioner argued that the goods should be released as no Show Cause Notice had been issued, and the conditions for provisional release should not include a Bank Guarantee for anticipated fines and penalties.The Court reasoned that provisional release was justified given the absence of a Show Cause Notice. The Court agreed with the Petitioner that requiring a Bank Guarantee for anticipated fines and penalties was harsh without a formal notice. Thus, the Court ordered provisional release upon the Petitioner executing a Provisional Duty Bond and furnishing a Bank Guarantee securing 50% of the differential duty.Conditions for Provisional ReleaseThe Court examined the conditions imposed for the provisional release of goods under the first two Bills of Entry and whether these should apply to the remaining four Bills. The Petitioner contended that the Bank Guarantee condition was excessive. The Court found merit in the Petitioner's argument, noting that the guarantee should only cover the differential duty. Consequently, the Court ordered the provisional release of goods under all six Bills of Entry with a Bank Guarantee for 50% of the differential duty.Future ImportsThe Court addressed the issue of future imports of the same goods by the Petitioner. The Court ruled that future imports should be provisionally released under similar conditions, requiring a Provisional Duty Bond and a Bank Guarantee for 50% of the differential duty. The Court clarified that no guarantee would be needed for anticipated fines and penalties, and separate Show Cause Notices would be necessary for future imports.Detention-cum-Demurrage Waiver CertificateThe Petitioner sought a Detention-cum-Demurrage Waiver Certificate for the six Bills of Entry. The Court did not express an opinion on this request at this stage, leaving it open for the Petitioner to apply for the certificate before the appropriate authorities, who would decide in accordance with the law.Typographical Error CorrectionThe Court addressed a typographical error in the Bill of Entry Number in the judgment. The Petitioner requested correction, which the Court granted, replacing '7503032' with '7503023' in the relevant paragraphs of the judgment.SIGNIFICANT HOLDINGSThe Court established several core principles:Provisional release of imported goods is justified in the absence of a Show Cause Notice, with conditions tailored to secure only the differential duty.Future imports of the same goods should be provisionally released under similar conditions, with separate adjudication processes for each import.Typographical errors in legal documents should be corrected to ensure accuracy.The final determinations on each issue were:The goods under all six Bills of Entry were ordered to be provisionally released upon the Petitioner furnishing a Provisional Duty Bond and a Bank Guarantee for 50% of the differential duty.The Customs Department was directed to issue a Show Cause Notice within six weeks, with the Petitioner required to reply within two weeks of issuance, and adjudication to follow within 12 weeks.Future imports of the same goods by the Petitioner would be provisionally released under similar conditions, without a Bank Guarantee for anticipated fines and penalties.The Petitioner was allowed to apply for a Detention-cum-Demurrage Waiver Certificate at the appropriate stage.The typographical error in the Bill of Entry Number was corrected as requested by the Petitioner.