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of <h1>Imported textile consignments alleged mis-declared with incomplete sampling/testing: provisional release on full-value security and 30% BG</h1> Dominant issue: validity of conditions for provisional release where imported goods allegedly mis-declared and investigation/sampling/testing is ... Provisional release of seized goods - imported goods by camouflaging them with TPU laminated fabric - importer mis-utilised AEO (Authorized Economic Operator) status - Transaction value - Classification and valuation of imported goods - Sampling and testing standards (IS/ASTM) - Mis-declaration and fraud - intention to evade payment of duty - requirement of a bond and a bank guarantee - HELD THAT:- We find that while the adjudicating authority is well within his right to impose conditions for provisional release of the goods, the said conditions should not be so impracticable and harsh so as to kill the importer’s business itself as held by various decisions as above. It has to be borne in mind that no two cases can be identical and a single fact can differentiate one case from the other. Therefore, any decision following the other cases would lead to disastrous results. Therefore, a considered decision needs to be taken based on the facts and circumstances of the case before hand. The appellants claim that there are certain inadequacies in the investigation, sampling, testing and the valuation of the goods as pointed out by the appellant. We find that the peculiar facts of the case are that: The goods are not per se prohibited; the importer is not a flyby night operator; they are in the business for more than 30 years and were importing regularly at the Port in question and in other Ports; The Appellant had imported similar goods on an earlier occasion vide Bill of Entry No. 9387015 dated 23.11.2023 and CRCL New Delhi refused to conduct testing claiming lack of facility for conducting tests especially “FITR Analysis”; the said consignments have been cleared after getting the same tested from Textile Committee; In the instant case, the opinion of Textile Committee has not been taken; CRCL has not addressed all the queries raised by the importer and have not tested all the parameters as per Indian or International standards; The Academic and Professional competence of the Chartered Engineer to evaluate the goods and the source of the methodology he adopted are forthcoming. Revenue seeks to assess most of the impugned goods on per square meter basis. However, for the purposes of Bond, BG, they consider the total value. Appellant’s averment that the impugned goods cannot be actually sold in the market at the value arrived at by the Revenue cannot be discarded. The adjudicating authority himself finds that the investigation is in progress. We find that the interest of justice and also the interest of Revenue will be safeguarded by seeking a bond for the full value of the goods and Bank Guarantee to the extent of 30% of the duty estimated. We further find that the other conditions for the provisional release, as ordered by the Commissioner of Customs, need not be interfered with. Accordingly, the appeal is partly allowed subject the appellant complying with the above directions, the goods shall be released within a period of two weeks. Issues: Whether the conditions imposed for provisional release of seized imported goods specifically requirement of a bond for full assessed value and a bank guarantee/security to cover alleged liabilities were justified on the facts and required modification.Analysis: Provisional release being an interim measure, the inquiry into classification, valuation and alleged mis-declaration remained incomplete and investigations were ongoing. Authorities had relied on sampling, CRCL test reports and a chartered engineer's valuation to estimate assessable value and duty, and had invoked Section 110A as the statutory basis for securing revenue. Judicial precedents establish that conditions for provisional release must protect revenue interest without being so harsh as to destroy the importer's business; high courts and tribunals have frequently required moderation of bank guarantee conditions (commonly directing bond for full value and a BG approximating 25-30% of differential duty). Relevant factual considerations included: ongoing investigation, disputes over sampling and completeness of tests, the importers long-standing trading history and AEO status, absence of Textile Committee opinion in the present proceedings, and the particulars of how valuation was arrived at. Balancing protection of revenue with proportionality of interim conditions, the security quantification was adjusted in light of jurisprudence and case-specific factors.Conclusion: The provisional release conditions are modified by requiring a bond for the full assessed value of the goods and a bank guarantee equal to 30% of the estimated differential duty; other conditions for provisional release remain undisturbed. Appeal is partly allowed in favour of the assessee.
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