TaxTMI 
TaxTMI 
2017 (5) TMI 1234
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.... 78/12 & 13, Ground Floor, Village Bakoli, Near Ganesh Dharam Kanta, Delhi-110036; and (c) Issue a writ order or direction in the nature of mandamus to the Respondent to release the goods Seized at godown premises at Khasra No. 43/9, Village Hamidpur, Near HMR. College, G.T. Kamal Road, New Delhi-110036; 2. The factual background is that the Petitioner is engaged in the business of import of chemicals. The Petitioner states that it had placed an order over its foreign supplier, Rainbow Chemical Industry Limited, in China, for supply of ammonium sulphate industry grade for gross weight of 522080 kg for the value of USD 98,800 against commercial invoice dated 23rd January 2017. In both the said invoice and the bill of lading ('B/L') dated 10th February 2017, the goods were declared as 'ammonium sulphate'. The Petitioner filed a bill of entry ('B/E') No. 8911267 dated 16th March 2017 declaring the goods as 'ammonium sulphate' at the assessable value of Rs. 67,50,658.20. The customs duty payable was indicated as Rs. 15,42,525.40 This was also paid upon arrival of the goods. However, on the directions of the Directorate of Revenue Intelligence ('DRI'), the goods were detained on 22nd ....
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....or even the goods seized at the premises/godowns of the Petitioner. The said writ petition was first listed for hearing before this Court on 8th May 2017. Mr. Sanjeev Narula, learned Senior standing counsel for the Principal Commissioner of Customs while accepting notice on that date produced before the Court copy of an order dated 5th May 2017 passed by the Assistant Commissioner SIIB-Import granting provisional release of the goods imported against the live B/E subject to certain conditions. While acknowledging that such order had been passed, Ms. Anjali Jha Manish, learned counsel for the Petitioner, stated before the Court that those conditions were onerous and contrary to the settled legal position. At that stage, Mr. Narula sought time to file a reply to the petition. The reply has since been filed both by the Customs and the DRI. 7. In the meanwhile, the Petitioner filed the second accompanying petition Writ Petition (Civil) No. 4123 of 2017 challenging the order of provisional release dated 5th May 2017. It must be noted that the said order dated 5th May 2017 permits provisional release of the goods covered under the live B/E subject to the following conditions: "(i) the ....
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....ort) on the subject of "Investigation into import made by M/s. Mala Petro Chemicals & Polymers and others". This was as a result of the examination of the goods seized from the godowns and premises of the Petitioner. Pursuant to the request for provisional release of those goods, the DRI has in the said letter estimated the total value of the seized goods to be as follows: Melamine (Rs. 80,28,546 for a quantity of 97,225 kg) and PVC Resin (Rs. 42,00,154 for a quantity of 56515 kg) with the total duty payable against both those goods as Rs. 45,46,947 and Rs. 16,50,172 respectively. Thus, the total differential duty as estimated by the DRI on those seized goods (i.e. seized from the premises and godowns of the Petitioner) worked out to Rs. 61.97 lakhs approximately. The said letter dated 17th May 2017 further notes that the Petitioner had voluntarily deposited Rs. 3 crores towards partial discharge of duty liability of past consignments. It is mentioned therein that the market value of the seized goods is Rs. 1.73 crore (approximately). It must be mentioned at this stage as regards the goods seized from the premises and godowns of the Petitioner that no provisional release order is y....
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....f goods which would, in all probability attract penalties under Sections 112, 114A and 114AA of the Act. The requirement of furnishing a BG for 30% of the differential duty was therefore to cover the penalty that could be imposed notwithstanding that the importer may have paid a substantial portion of the differential duty. He submitted that ultimately each case turned on facts and in the circumstances of the present case, the conditions imposed could not be said to be harsh or unreasonable. He submitted that as far as the other seized goods were concerned, the Customs Department would consider issuing a provisional release order in a time bound manner on the same conditions. 14. The above submissions have been considered. In the first pace it requires to be noted that both the sides agreed that in the present case the Petitioner is seeking provisional release of seized goods. It is not and in fact cannot seek provisional assessment of the goods. This distinction requires to be kept in view. Provisional assessment of the goods takes place under the conditions mentioned in Section 18 (1) of the Act. Provisional release of imported goods that have been seized takes place under Secti....
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.... and, where the circumstances so warrant, penalty provisions contained in Sections 112, 114 A and 114 AA of the Act. It appears from a careful scrutiny of many of the orders of this Court that they were cases other than that of mis-declared goods. 18. In Zest Aviation Private Limited v. Union of India (supra), the Court was dealing with the case where the aircraft that was imported was seized when it was found being used by the promoters of the Petitioner company and not for passenger service or charter service. In other words, the conditions of the notification under which the import of the said aircraft was permitted were not adhered to. It was not a case of misdeclaration. The Court distinguished the judgment of the Bombay High Court in Apollo Cranes (P) Limited v. Union of India (supra) on the ground that the Bombay High Court had wrongly distinguished the decision of this Court in Navshakti Industries Pvt. Ltd. v. Commissioner of Customs (supra). The Court then modified the conditions of provisional lease by directing that the Petitioner there would execute a bond for a sum of Rs. 70 crores and, in addition, provide a BG for Rs. 3.6 crores being 30% of the alleged differentia....
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.... the deposit of 100% of the duty on the declared value, 50% of the differential duty, and personal bond for the remaining 50%. 23. The power under Section 110 A of the Act involves exercise of discretion. The scope of judicial review is to examine if the discretion has been rightly exercised; that it is not based on irrelevant materials and is fair and reasonable in the circumstances. It is not an appellate power. The drawing of a distinction between seizure of imported goods as a result of undervaluation and seizure of imported goods upon misdeclaration cannot per se be said to be irrational. On the contrary, the failure to draw such a distinction and treat all types of wrongful imports on an equal footing might result in miscarriage of justice. That is perhaps why Section 110 A has been worded in the way it has, leaving some margin to the Customs in the exercise of their discretion subject, of course, to the recognised legal limits. 24. Keeping the above parameters in view, the Court proceeds to examine the impugned order dated 5th May 2017 directing provisional release of the goods imported against the live B/E subject to the conditions as noticed hereinbefore. 25. The test r....