TaxTMI 
TaxTMI 
TaxTMI 
2011 (10) TMI 148
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.... that the appellant is incurring heavy losses on account of Hire charges, fuel etc. on day to day basis, we hear appeal finally today itself after allowing the application for early hearing of the appeal. 3. The brief facts of the case are that the appellant has imported a vessel on Charter Hire basis and cleared duty-free import on re-export basis for Coastal run at Mumbai under Bill of Entry no. 2606686 dated 18.01.2011 by declaring assessable value of USD 23.537 million under valid Essentiality Certificate dated 12.01.2011 for execution of contractual work of petroleum operations for ONGC, exempted under Sr. no. 241 of table & list 12 of Customs Exemption Notification no. 21/2002 dated 1.03.2002. 4. The said vessel was seized subsequently under Panchanama dated 01.09.2011 on the charge of under valuation. The higher value of USD 42.2 million was on the basis of Charter Hire agreement showing the terms of obligatory insurance for vessel USD 42.2 million and report of ICON leasing fund "Portfolio Overview Second Quarter" showing vessel value of USD 42.5 millions, and the same was liable for confiscation under section 111(m) & (o) of the Customs Act, 1962. 5. The appellant filed....
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....4.2011 in the case of Larsen & Toubro Ltd . relating to the seizure of exempted vessel meant for ONGC petroleum project wherein by setting aside the seizure, the Hon'ble High Court was pleased to direct the petitioner not to use the vessel except for the intended use till the adjudication is complete and shall not re-export the vessel, except with the permission of the Customs authorities. 9. Therefore, he submitted in this way the interest of revenue shall be protected by executing bond and imposing similar conditions for provisional release of the said vessel. He emphasized that the appellant is not in a position to comply with the onerous conditions and it is a fact that vessel is required for ONGC petroleum project of national importance and appellant are incurring loss in terms of foreign exchange. 10. On the other hand Shri V.K.Singh learned A.R submitted that considering the urgency of the matter, the appeal can be disposed of by remanding the matter to the Commissioner for fresh consideration of the contentions of the appellant and to pass a speaking order as held by the Hon'ble Kolkata High Court in the case of Govind Steel Co. Ltd. (supra) wherein the hon'ble Hi....
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....department by restricting not to re-export the vessel instead of demand of duty and execution of bank guarantee on exempted goods. As the heavy losses are accumulating on day to day basis in terms of foreign exchange on the appellant, in view of the above discussion, prima facie it would further cause undue hardship to the appellant, if the matter is remanded for fresh consideration. 14. Therefore, the impugned order is modified by waving the conditions of payment of duty and execution of bank guarantee and putting the following conditions for provisional release of the impugned vessel. A) The appellant is required to execute a bond of Rs. 237,08,76,525/-. B) The appellant shall file the undertaking and affidavit with the Commissioner of Customs (Import), Mumbai to comply with the following conditions:- i) Not to use the vessel except for the purpose of executing the contractual work of petroleum operations for ONGC till the final adjudication on completion of investigation, ii) Not to re-export the vessel except with the permission of Commissioner of Customs(Import), Mumbai, and iii) To submit monthly report of usage of the vessel in ONGC work after provisional release befor....
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....f section 111(m) will apply even in a case where there is no liability to pay duty. The goods are liable to confiscation when the value or any other material particulars are misdeclared irrespective of the fact that whether there is a requirement to make any payment of duty for the import of the goods. In the event of undervaluation being ultimately proved in the adjudication proceedings, the goods become liable to confiscation and the adjudicating authority can give an option to the importer to redeem the goods on payment of fine. Therefore, the interest of Revenue with regard to securing "fine" if any, payable on the goods needs to be taken into consideration while setting the terms and conditions for provisional release of the goods. 19.1 Section 110A of the Customs Act, 1962 gives the power of provisional release to the Commissioner of Customs who may, pending the final order, can direct release of the goods to the owner, on taking a bond from him in the proper with such security and conditions as he may require. Thus, the order passed for provisional release is subject to such terms and conditions set by the Commissioner of Customs and it is only an interim order and not an o....
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....nce to that effect in the High Court. In the above premises, we are not inclined to entertain this appeal which is accordingly dismissed in limine." 19.3 Further, a three judge bench of the Hon'ble Apex court in the case of Assistant Collector of Central Excise vs. Jainson Hosiery Industries reported in 1979(4) ELT J 511 (SC), in a case relating to provisional release of seized goods under rule 206(3) of the Central Excise Rules, 1944 observed as follows: "We certainly agree that even while releasing the goods the Courts must be very careful to see that every condition or need that the investigator points out as essential for discharging his investigative functions, should be readily conceded by the Court unless plainly unreasonable. After all, at the stage of investigation it is risky for the Court to intervene except where manifest injustice cries for the Order of the Court." 19.4 In Govind Steel Co. Ltd. vs. Union of India reported in 2010 (256) ELT 234 (Cal.) While dealing with a similar matter relating to provisional release of goods pending adjudication, the Hon'ble High Court of Calcutta held as follows: "The Assistant Commissioner of Customs is directed to take ....
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.... we have not expressed any opinion or views on the merits of the dispute which shall be independently considered by the competent authority." 19.6 From the above judgments it is clear that the Tribunal should be very careful while entertaining appeals against terms and conditions set forth for provisional release of the goods as the orders in such cases are interim and executive in nature and unless great injustice has been done, appeal against such orders should not be entertained. Further, such appeals are not maintainable before this Tribunal as decided in Navshakti Industries Pvt. Ltd.'s case cited supra. 19.7 In the instant case, as has been discussed above, the direction of the Commissioner to pay the amount of duty for provisional release is premature and unsustainable in law as duty can be demanded only after determination of the same in an adjudication proceeding. Therefore, I am of the view that the matter has to go back to the Commissioner of Customs for consideration afresh, taking into account the submissions made by the appellant in the application for provisional release and pass a reasonable order in accordance with law, after hearing the appellant in person. ....
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....as allowed to be released provisionally on the following conditions:- a) execution of Bond of Rs. 237,08,76,525/- b) payment of duty Rs. 22,18,19,288/- and, c) execution of bank guarantee of 25% of above said duty amount. 23. The Revenue raised preliminary objection regarding maintainability of the appeal on the ground that the impugned order whereby the conditions for provisional release were imposed is an administrative order and the appeal is not maintainable. However, during argument, both sides submitted that the issue of maintainability is not referred to the Third Member. 24. The appellants are aggrieved with the conditions b) and c) imposed in the impugned order. 25. The contention of the appellant is that the Hon'ble Member (Judicial) as well as the Hon'ble Member (Technical) in their detailed orders held that the vessel is entitled for the benefit of duty exemption as provided under Notification no. 21/2002 dated 1.3.2002. In view of this, the contention is that the demand of duty and the condition for execution of bank guarantee of 25% of the duty are not justified for the provisional release of the vessel and the appellant submitted that they are ready to ....