2026 (3) TMI 998 - HC - Customs

Provisional release of seized imported goods allowed subject to deposit of enhanced duty, 10% bank guarantee and compliance conditions.

Whether seized imported multifunctional devices may be provisionally released pending adjudication was resolved by permitting conditional interim release: ... Validity of seizure memo seeking interim release of the imported goods - multifunctional devices - imported consignment of the multifunctional devices (126 units) - Demurrage waiver applications - quantification and payment of enhanced duty for release - requirement of bank guarantee for provisional release. Provisional release of seized imported goods - HELD THAT:- The High Court directed the respondent authorities to pass an order for provisional release of the seized goods on the petitioner's application, subject to Customs quantifying the enhanced duty within one week of receipt of this order and the petitioner paying/depositing the quantified enhanced duty; upon receipt of the payment in entirety the goods shall be released within four weeks. The order preserves the Customs Department's right to continue adjudicatory proceedings while permitting provisional release on the specified procedural conditions. [Paras 9, 10] Provisional release permitted subject to quantification within one week and payment of enhanced duty, with release within four weeks after payment. Requirement of bank guarantee for provisional release - HELD THAT: - The Court required the petitioner to provide a bank guarantee worth ten percent of the total price of the imported goods as a condition for provisional release and imposed record-keeping obligations if the petitioner sells the goods after provisional release, to be made available to authorities. [Paras 11] Petitioner to furnish a bank guarantee of 10% of the total price and maintain transaction details if goods are sold after provisional release. Adjudicating authority's independence from interim release order - HELD THAT: - The Court expressly clarified that the order for provisional release will not impede the Customs Department from proceeding with adjudication in accordance with law; the adjudicating authority must decide the matter on its merits, considering objections and contentions raised by the parties, uninfluenced by the conditional release. [Paras 10, 12] Adjudicating authority to proceed independently and decide the proceedings on merits, unaffected by the provisional release order. The Court directed that if the petitioner files an application seeking waiver of demurrage charges incurred to date, the respondents shall consider and decide such application objectively, without the interim release order precluding such consideration. [Paras 10] Demurrage waiver applications, if filed, to be considered and decided objectively by the authorities. Final Conclusion: The writ petition was allowed at the admission stage by directing provisional release of the seized imported consignment on specified conditions (quantification and payment of enhanced duty within prescribed time, furnishing of a 10% bank guarantee, and objective consideration of any demurrage waiver application), while preserving the adjudicating authority's power to decide the matter on merits. Issues: Whether the seized imported consignment of multifunctional devices may be provisionally released pending adjudication and, if so, on what conditions.Analysis: The petition challenges a seizure memo seeking interim release of the imported goods. The Court relied on precedent of similar writ petitions where conditional interim release was ordered and the Supreme Court declined to interfere with that interim relief while permitting adjudication to proceed. The Court noted that the present stage concerns only provisional release and that the adjudicating authority's right to decide the matter on merits remains reserved. The Court identified practical conditions to protect revenue interests consisting of (i) deposit/payment of the enhanced duty amount following customs quantification within specified timelines, (ii) provision of a bank guarantee equal to 10% of the total price of the goods, (iii) maintenance and production of transaction details if the goods are provisionally sold, and (iv) objective consideration of any application for waiver of demurrage charges.Conclusion: The writ petition is allowed and the respondent authorities are directed to pass an order for provisional release of the goods subject to the conditions of prompt customs quantification, payment/deposit of the enhanced duty within the prescribed period, provision of a bank guarantee equal to 10% of the total price, maintenance and production of customer transaction details if sales occur, and consideration of any demurrage waiver application; the adjudicating authority remains at liberty to decide the adjudication proceedings on merits without being influenced by this order.