Imported wheat flour sheets for spring rolls released provisionally after depositing 50% duty and bank guarantee

The Bombay HC directed release of imported wheat flour sheets dough for spring rolls pastry on provisional basis. The goods were challenged for reassessment under exemption N/N. 41/2019 and classification under Custom Tariff Heading 1901 2000. Considering the perishable nature of goods and petitioner's willingness to secure duty amount, the court found no purpose in detaining non-prohibited goods. Following Board's Circular dated 16 August 2017 parameters, respondents were directed to release goods upon petitioner depositing 50% of demanded duty and providing nationalized bank guarantee for remaining 50%. Release was ordered within one week of compliance with payment and guarantee conditions. The petition was disposed of with provisional release granted.

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ISSUES:

• Whether the reassessment order denying exemption under Notification No. 41/2019 and reclassifying imported goods under a different Custom Tariff Heading is valid.
• Whether the seizure memo relating to imported goods is illegal and liable to be quashed.
• Whether the collection of ground rent, detention, and demurrage charges can be restrained or waived.
• Whether perishable goods detained can be released pending appeal upon securing the duty demand.

RULINGS / HOLDINGS:

• On the reassessment order, the Court did not decide the validity but acknowledged the petitioner's right to challenge the order in appeal, emphasizing "the petitioner is willing to secure the duty."
• Regarding the seizure memo, the Court declined to adjudicate the issue, granting liberty to raise it in regular proceedings under the Act.
• On ground rent/detention and demurrage charges, the Court directed that if a representation for waiver is made, the respondents shall consider and decide it within two weeks, thus not restraining collection outright but ensuring due process.
• Concerning release of perishable goods, the Court directed release upon payment of 50% of the reassessed duty and furnishing a bank guarantee for the balance 50%, referencing the Board Circular dated 16 August 2017 and noting "no purpose would be served by detaining the goods."

RATIONALE:

• The Court relied on the statutory framework governing customs duty reassessment and appeals, as well as the administrative guidelines issued by the Board in its Circular dated 16 August 2017, which lays down parameters for provisional release of goods.
• The Court recognized the perishable nature of the goods and the absence of prohibition on their import, justifying provisional release to avoid undue hardship.
• The Court adopted a balanced approach by allowing provisional release conditioned on securing the duty demand through partial payment and bank guarantee from a nationalised bank, ensuring revenue protection.
• The refusal to decide on the seizure memo and ground rent waiver issues reflects judicial restraint, directing the petitioner to pursue remedies through statutory channels and representations to the appropriate authorities.

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