Provisional release conditions must be proportionate: bank guarantee requirement deleted where classification was backed by a final advance ruling.

Conditions for provisional release of seized imported goods must be reasonable, proportionate and rationally connected to the revenue interest. Where an advance ruling on classification had attained finality and other material supported the importer's declared position, a bank guarantee condition based mainly on visual inspection and delayed testing was unsustainable. The Tribunal found the security demand arbitrary in the facts and held that the impugned circular could not justify it. The provisional release order was therefore modified by deleting the bank guarantee requirement, while the remaining conditions were left intact.

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Issues: Whether the condition requiring furnishing of a bank guarantee as part of provisional release of seized imported goods was lawful and sustainable.

Analysis: The appellant had obtained an advance ruling on the nature of the imported goods, and the ruling had attained finality between the parties. The record also showed prior laboratory material supporting the declared classification, while the impugned classification was driven principally by CRCL reports based on visual inspection and delayed testing. The Tribunal also noted that the challenged circular could not justify an arbitrary or unreasonable security demand in the facts of the case, and that provisional release conditions must bear a rational nexus to the perceived revenue interest.

Conclusion: The bank guarantee condition was held unsustainable and was set aside; provisional release was directed without that condition, in favour of the assessee.

Final Conclusion: The appeal succeeded to the extent that the impugned provisional release order was modified by deleting the bank guarantee requirement, while the remaining conditions were kept intact.

Ratio Decidendi: Conditions imposed for provisional release of seized goods must be reasonable, proportionate, and connected to protecting the revenue; they cannot be sustained when they are arbitrary in the face of a final advance ruling and other material supporting the importer's declared position.

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