Provisional release of imported goods: Court reduces 100% bank guarantee requirement to 50%, directing provisional release upon security.

Challenge to conditions for provisional release of imported goods focused on requirement to furnish bank guarantee equal to 100% of estimated differential duty plus anticipated redemption fine and penalties. Court found those conditions inconsistent with prior provisional assessments permitting clearance on a bond for goods value and 50% bank guarantee; therefore the 100% guarantee requirement was modified to 50% of estimated differential duty while other conditions remain. Petitioner directed to furnish provisional duty bond and 50% bank guarantee within one week, whereupon Customs must provisionally release the seized goods within a further week; compliance to be reported later.

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Issues: (i) Whether the condition imposed for provisional release of seized goods requiring the petitioner to furnish a Bank Guarantee equal to 100% of the estimated differential duty together with estimated redemption fine and penalties is justified, or whether it should be modified to require a Bank Guarantee equal to 50% of the estimated differential duty.

Analysis: The provisional release order required full security to cover estimated differential duty and anticipated fines and penalties pursuant to CBIC Circular No. 35/2017-Customs and Sections 110A, 112(a), 114A and 125(1) of the Customs Act, 1962. The petitioner demonstrated that identical goods imported subsequently were provisionally assessed and cleared on a bond for value and a Bank Guarantee equal to 50% of estimated differential duty under the Faceless Assessment regime and applicable AEO benefits reflected in Circulars Nos. 33/2016 and 38/2016. The distinction in Bank Guarantee quantum for provisional release under Section 110A versus provisional assessment was examined in light of consistency and parity of treatment; while AEO concessions provide reduced BG where applicable, the benefit is not ordinarily extended to provisional release orders unless consistent with administrative practice. Given the admitted factual parity between the seized consignment and the subsequently cleared consignment, imposing a higher quantum for the seized goods resulted in inconsistent treatment absent distinguishing considerations.

Conclusion: The condition requiring a Bank Guarantee equal to 100% of the estimated differential duty and anticipated fines and penalties is modified. The seized goods shall be provisionally released upon furnishing a Bank Guarantee for 50% of the estimated differential duty, with all other conditions of provisional release remaining unchanged, which is favourable to the petitioner.

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