Provisional release of imported fuel and re export supervision: excessive 50% bank guarantee reduced to 10% for consistency.

Provisional release conditions for imported goods under Section 110A were challenged on grounds of inconsistency and disproportionality. The decision reasons that administrative discretion must be exercised uniformly; where comparable orders permitted provisional release on a bank guarantee of 10% and bond of 100% for High Flash High Speed Diesel meeting specified test parameters, imposing a 50% bank guarantee was excessive. The importer produced a supplier analysis report and the goods were destined for re export under customs supervision. The order was modified to require a bank guarantee of 10% of value and the appeal was partly allowed accordingly.

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Issues: Legality of the conditions imposed for provisional release of seized imported goods under Section 110A of the Customs Act, specifically (i) requirement of bond equal to value of goods, (ii) furnishing of bank guarantee equal to 50% of value, (iii) undertaking to cooperate in investigation and adjudication, and (iv) re-export under Customs supervision within stipulated time.

Analysis: The decision examines whether the conditions imposed were justified given the nature of goods (allegedly High Speed Diesel) and the available test reports; whether samples and tests were representative and determinative; and whether a uniform, non-discriminatory approach should be applied where an earlier provisional release order in materially similar circumstances imposed a lower bank guarantee (10%). Consideration is given to the importer's position that goods are to be re-exported and that analysis certificates from the foreign supplier exist, and to administrative practice and judicial authority favouring consistency of treatment. On balance, while provisional release subject to safeguards is permissible under Section 110A, imposing a higher bank guarantee (50%) in circumstances where an identical subject-matter provisional release by the same authority applied 10% would be inconsistent and discriminatory; other conditions (bond equal to value, undertaking to cooperate, supervised re-export within time) are appropriate safeguards.

Conclusion: The impugned provisional release order is modified: provisional release for re-export is allowed subject to (a) execution of bond equal to the value of the goods, (b) furnishing of bank guarantee equal to 10% of the value of the goods, (c) submission of an undertaking to cooperate in investigation and adjudication, and (d) re-export under Customs supervision within a stipulated time. The appeal is partly allowed in favour of the assessee.

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