Provisional release of seized used digital multifunction print/copy machines allowed after importer gave full bond and bank guarantee

The dominant issue was whether restricted imported "used highly specialized equipment" digital multifunction print/copying machines should be provisionally released despite alleged inconsistent monitoring practices across Custom Houses. Relying on MeitY's memorandum noting absence of a centralized monitoring mechanism, and applying the binding conditions earlier fixed by the HC and affirmed by the SC in analogous seizure litigation, the Tribunal held that once the importer had already executed a provisional duty bond and furnished a bank guarantee covering the assessable value of the entire consignment, there was no legal basis to withhold release of the remaining units. Consequently, provisional release of 63 units was ordered on the existing bond and bank guarantee, subject to the HC/SC conditions, and the appeal was disposed of.

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1. ISSUES PRESENTED AND CONSIDERED

1. Whether the customs authority was justified in withholding provisional release of 63 pieces of "Used Highly Specialized Equipment Digital Multifunction Print & Copying Machine" on the ground that the model-wise import had crossed 100 units per calendar year.

2. Whether, given that the importers had executed "Provisional Duty Bond" and "Bank Guarantee" taking into account the assessable value of the whole consignments, there remained any valid basis to deny provisional release of the withheld 63 pieces.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Justification for withholding provisional release of 63 pieces on the "100 units per model per year" premise

Legal framework (as discussed/applied by the Court): The Court proceeded on the admitted position that the goods are "Used Highly Specialized Equipment Digital Multifunction Print & Copying Machine" and treated them as restricted items. The Court considered the stated premise on which seizure/detention had been continued and provisional release withheld, namely a model-wise cap of 100 pieces per calendar year for HSE and the absence of a centralised monitoring mechanism.

Interpretation and reasoning: The Court noted that the stated approach being followed led to different practices across Custom Houses, and that in Kolkata the practice was to count imports at that port, resulting in withholding of the subject 63 pieces. The Court treated as material that, for similar imports seized earlier, the goods were directed to be released provisionally against bond and bank guarantee by the High Court, as affirmed by the Supreme Court, and that in those directions no model-wise quantity restriction was imposed. The Court further observed that following those directions, similar consignments were being released provisionally against P.D. Bond and bank guarantee, whereas the present case alone involved withholding of part quantity.

Conclusions: The Court held that withholding provisional release of the 63 pieces was not justified in the circumstances and directed that the 63 pieces be provisionally released, subject to fulfilment of the same conditions (bond and bank guarantee) as in the High Court's order on similar imports.

Issue 2: Effect of execution of P.D. Bond and Bank Guarantee for the whole consignments on entitlement to provisional release of the withheld goods

Legal framework (as discussed/applied by the Court): The Court applied the approach reflected in the High Court's directions for provisional release on similar imports-release against execution of bond and furnishing of bank guarantee, without prejudice to adjudication-treating those conditions as governing the present provisional release as well.

Interpretation and reasoning: The Court found it undisputed that the appellants had already furnished "Provisional Duty Bond" and "Bank Guarantee" taking into account the assessable value of the whole consignment, and not merely the portion initially ordered to be released. On that factual premise, the Court held that once the security requirements stood complied with for the entire consignment, there was no valid reason to continue withholding provisional release of the remaining 63 pieces.

Conclusions: The Court concluded that the 63 withheld pieces must be provisionally released and ordered release on execution of P.D. Bond and bank guarantee in terms aligned with the High Court's conditions for similar imports, leaving the merits to adjudication.

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