Provisional release of goods granted under Section 124 with Rs. 50 lakh bank guarantee requirement

The Bombay HC addressed a petition for provisional release of goods under the Customs Act, 1962, following a show cause notice under Section 124. The Court granted provisional release of goods covered under specified Bill of Entries within seven days, subject to petitioners furnishing a bank guarantee of Rs. 50 lakhs from a nationalized bank. This amount was calculated based on the goods' approximate value of Rs. 8.69 crores and a 6% duty rate. The Court directed disposal of the show cause notice within eight weeks of petitioners' response, keeping all contentions open for consideration. Petitioners were also permitted to apply for demurrage charge waiver.

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The Bombay High Court, in a petition involving provisional release of goods under the Customs Act, 1962, addressed the issuance of a show cause notice dated 21 June 2025 under Section 124. The Court granted liberty to the Petitioners to respond to the notice and raise all contentions, including those in the petition. Regarding provisional release, the Court noted a controversy over the applicability of Sr. No. 5(b) of C.B.E. & C.'s Circular No. 38/2016, which requires securing 100% duty by bank guarantee or cash deposit. Since adjudication of this issue involves factual determination, the Court balanced interests and directed provisional release of goods covered under Bill of Entries Nos. 7974563 and 8268069 within seven days, contingent upon the Petitioners furnishing a bank guarantee of Rs. 50 lakhs from a Nationalised Bank. This amount was based on the approximate value of goods (Rs. 8.69 crores) and a duty rate of 6% if Indo-ASEAN Treaty provisions are not applied.The Court kept all contentions open for consideration during disposal of the show cause notice, which it ordered to be decided within eight weeks from the Petitioners' response. It also allowed Petitioners to apply for waiver of demurrage charges, subject to legal disposal by Respondents. The petition was disposed accordingly.

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