2025 (4) TMI 256 - HC - Customs

LED lighting goods seized for undervaluation get provisional release under Section 110A despite BIS non-compliance

M/s Reema Associates Versus Directorate of Revenue Intelligence, Customs Commissionerate Through Commissioner Indore, Assistant Commissioner of Customs, Chhattisgarh.

HC allowed petition for provisional release of seized LED lighting goods under Section 110A of Customs Act, 1962. Goods were seized for alleged ... Grant of provisional release of goods seized under Section 110 of the Customs Act, 1962 - import of consignment of LED lighting chain/luminaries vide aforesaid Bill of Entries by resorting to undervaluation and thereby defrauding the government exchequer by evading payment of Customs duty - HELD THAT:- Perusal of the provisions of Section 110A of the Act, 1962 would show that any goods, documents or things seized or bank account provisionally attached under section 110, may, pending the order of the adjudicating authority, be released to the owner or the bank account holder on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require. Therefore, on bare perusal of the Section 110A of the Act, 1962, the adjudicating authority has been granted the discretion to provisionally release the goods, on a bond in a proper format with such security and conditions as the adjudicating authority may require. Applying the well settled principles of law in the facts of this case and as per the provisions of Section 110A the goods can be released on certain conditions. Therefore, this court is of the considered opinion that the seized goods can be released in custody of the petitioner after imposing certain conditions because the said goods were not as per the BIS Standard. Conclusion - The provisional release under Section 110A of the Customs Act, 1962, is permissible with conditions, even for goods not complying with BIS standards, provided security is ensured - The seized article is directed to be released provisionally in favour of the petitioner subject to fulfilment of conditions imposed. Petition allowed. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered in this judgment include:1. Whether the provisional release of goods seized under Section 110 of the Customs Act, 1962, can be granted to the petitioner under Section 110A of the same Act.2. Whether the goods in question comply with the mandatory norms of the Bureau of Indian Standards (BIS) and the Legal Metrology (Packaged Commodity) Rules, 2011.3. Whether the import of the goods in question is prohibited under the Foreign Trade Policy 2015-2020 and the Electronics and IT Goods (Requirement of Compulsory Registration) Order, 2012.ISSUE-WISE DETAILED ANALYSISIssue 1: Provisional Release under Section 110A of the Customs Act, 1962- Relevant Legal Framework and Precedents: Section 110A of the Customs Act, 1962, allows for the provisional release of goods seized under Section 110, pending adjudication, upon taking a bond with security and conditions as required by the adjudicating authority. The Supreme Court's decision in Delhi Photocopies Vs. Commissioner of Customs and other cases were cited to support the provisional release.- Court's Interpretation and Reasoning: The Court noted that Section 110A provides discretion to the adjudicating authority to release goods provisionally. It emphasized that the provision allows for such release upon securing a bond and fulfilling conditions set by the authority.- Key Evidence and Findings: The petitioner had submitted letters on 8th December 2023 and 11th January 2024, seeking provisional release of goods with a bank guarantee for the differential amount of customs duty. Despite this, the goods were not released.- Application of Law to Facts: The Court applied the principles of Section 110A to the facts, determining that the goods could be released provisionally under specified conditions.- Treatment of Competing Arguments: The petitioner argued for release based on Section 110A, while the respondents contended the goods were non-compliant with BIS standards and thus should not be released.- Conclusions: The Court concluded that the goods could be released provisionally, subject to conditions ensuring compliance and security.Issue 2: Compliance with BIS and Legal Metrology Standards- Relevant Legal Framework and Precedents: The BIS standards under IS:10322 (Part5/Section 7):2017 and the Legal Metrology (Packaged Commodity) Rules, 2011, require compliance for importation of certain goods.- Court's Interpretation and Reasoning: The Court considered reports from the Bureau of Indian Standards, which indicated non-compliance of the imported goods with mandatory BIS norms.- Key Evidence and Findings: The BIS reports showed that several items were non-conforming to marking requirements and lacked BIS standard marks.- Application of Law to Facts: The Court found that the goods did not meet the required BIS standards, impacting their eligibility for import and provisional release.- Treatment of Competing Arguments: The respondents argued that non-compliance with BIS standards justified detention, while the petitioner sought provisional release despite these findings.- Conclusions: The Court acknowledged the non-compliance but allowed provisional release under strict conditions to prevent market sale without BIS certification.Issue 3: Prohibition under Foreign Trade Policy and CRO, 2012- Relevant Legal Framework and Precedents: The Foreign Trade Policy 2015-2020 and the Electronics and IT Goods (Requirement of Compulsory Registration) Order, 2012, prohibit importation of unregistered or non-compliant goods.- Court's Interpretation and Reasoning: The Court interpreted the policy as prohibiting the import of goods that do not meet BIS registration and labeling requirements.- Key Evidence and Findings: The goods were found to be non-compliant with the BIS standards, and no exemption from the Ministry of Electronics and Information Technology was obtained.- Application of Law to Facts: The Court applied the prohibition rules to the facts, noting the goods' non-compliance with the policy.- Treatment of Competing Arguments: The petitioner argued for release under Section 110A, while the respondents emphasized the prohibition under the trade policy.- Conclusions: The Court concluded that while the goods were non-compliant and prohibited, provisional release was possible under strict conditions.SIGNIFICANT HOLDINGS- The Court held that provisional release under Section 110A of the Customs Act, 1962, is permissible with conditions, even for goods not complying with BIS standards, provided security is ensured.- The judgment reinforced the principle that provisional release can be granted with proper security and compliance conditions, even when goods are non-compliant with mandatory standards.- The Court directed the provisional release of goods within 30 days, subject to conditions including verification of ownership, provision of a bank guarantee, and an affidavit ensuring no sale in the Indian market without BIS certification.