2026 (1) TMI 1181

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....that appellant is inter alia engaged in the trading, processing and retail of various agri-commodities, including spices, pulses and oilseeds. In the regular course of business, the Appellant imported "coriander seeds" under duty exemption Notification No. 21/2023-Cus dated 01.04.2023 against various Advance Authorizations issued during the period between February 2024 to February 2025. 1.2 According to the department, the appellant has diverted the said imported coriander seeds as such into the domestic market without doing any processing of the same which is in violation of actual user condition as provided in Customs Notification No. 21/2023- Customs dated 01.04.2023. It is also alleged that the said imported coriander was stored in various warehouses in the name of other parties. Further, it was also alleged by the department that to fulfil the export obligation, the Appellant is procuring the coriander seeds from the domestic market rather than processing the imported coriander seeds under Customs Notification No. 21/2023-Cus. 1.3 Based on the above allegation, department vide Seizure Memo dated 18.06.2025 seized the coriander seeds stored in various warehouses. On reque....

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....4 (178) ELT 13 (SC) (c) Steel Authority of India Ltd. vs. CCE, 1996 (88) ELT 314 (SC) (d) Indian Petrochemicals vs. CCE, 1997 (92) ELT 294 (SC) 2.3 Learned Counsel further relies on the decision in case of M/s KDL Biotech Ltd. vs. Commissioner of Customs (Export Promotion), Mumbai, 2015 (327) E.L.T 305 (Tri.-Mumbai) wherein the Tribunal observed that the term "physically incorporated" in the policy does not mean that the imported inputs should be actually used in the resultant product exported out of India. He also relies on following decisions on this aspect: (a) Dolphin Drugs (P) Ltd. V/s. C.C. Final Order No. 73/98 dated 15.01.1998 (b) Dolphin Drugs (P) Ltd. V/s. C.C. reported in 2000 (115) ELT 552 (T) (c) U-Form Pvt. Ltd. V/s. C.C. reported in 2003 (154) ELT 633 (T). (d) Vorin Laboratories Ltd. V/s. C.C. reported in 2004 (168) ELT 107 (T). 2.4 The above settled position was reiterated by the CESTAT in Galaxy Surfactants Ltd. Vs. CC - reported in 2006 (202) ELT 495, the relevant portion is reproduced hereunder: "14......As regards the use of duty free imported raw material first in the manufacture of final prod....

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....mmissioner of Customs, ICD vs. Navshakti Industries Pvt. Ltd., 2011 (5) TMI 149- (Supreme Court) wherein the Hon'ble Supreme Court modified the Hon'ble High Court's Order and directed the respondents to furnish bank guarantee of 30% of the differential duty to the satisfaction of the Commissioner of Customs for the release of goods in question. Further in the case of M/s. Printwell Offset vs. Union of India and 2, 2016 (3) TMI 988- (Gujarat High Court) wherein the Hon'ble High Court referred to the decision of Navshakti Industries (supra) by Hon'ble Supreme Court and held that the condition of furnishing guarantee for the full duty amount is required to be modified by directing the Appellant to furnish a bank guarantee only to the extent of 30% of duty amount. He, therefore, submitted that in the present case the impugned order has demanded an excessive and disproportionate amount of bank guarantee for the provisional release of goods. The amount demanded is approx. 70% of the value of the goods which stands in contradiction with the decisions of Hon'ble Supreme Court and High Court. 2.8 He further submitted that impugned order has demanded bond and bank guarantee from the Appel....

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.... the Commissioner. She further submitted that though the Commissioner has ordered provisional release of goods but imposed certain conditions as mentioned in the impugned order. She further submitted that the Tribunal should uphold the conditions mentioned in the impugned order. 4. I have heard both sides and perused the records. I find that appellant has submitted that imported coriander are always processed in his factory and never sold in market and violation of actual user condition is attracted only when imported inputs are sold in domestic market. Hon'ble High court has permitted use of imported inputs imported under notifications issued under Advance Authorisation Scheme for manufacturing of finished goods which are sold in domestic market in some decided cases. 4.1 At this stage, issue pertains to challenge to conditions of provisional release of goods under section 110A of the Customs Act, for which I find that issue is directly dealt with in decision in case of Commissioner of Customs, ICD vs. Navshakti Industries Pvt. Ltd., 2011 (5) TMI 149- Supreme Court wherein Hon'ble Supreme Court modified the Hon'ble High Court's Order and directed the respondents to furnish b....