TaxTMI 
TaxTMI 
2026 (7) TMI 930
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.....2025. The imported goods, having a total net weight of 12,22,860 gm and totally valued at Rs 25,16,49,066, were seized on 07.01.2026. Lower authority rejected the application filed by the appellants for provisional release and the appellate authority vide impugned order upheld the order of the lower authority. 3. Shri Saurabh Kapoor, Learned Counsel, assisted by Shri Vivek Sharma, submits that the case involves is only a classification dispute and the department converted the same in to a case of import of "prohibited/restricted goods; there is no allegation of concealment, mis-declaration of quantity or value, substitution, forgery of documents, involvement of hazardous etc; the impugned goods were declared as silver jewelry with synthetic stones and the test report also confirms that the goods are studded with synthetic cubic zirconia/ synthetic ruby. He submits that the test reports were not supplied to the Appellant; the impugned order itself records that the Appellant's request for copy of test report was still awaited; denial of provisional release on the basis of a document not supplied is bad in law. 4. Learned Counsel submits further that even on classification, the....
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....are liable for confiscation and benefit of imports under AIFTA is not available. 7. learned authorised representative submits that classification under CTI 71131145 is incorrect as it covers jewellery studded with natural precious or semi-precious stones; synthetic stones (cubic zirconia, synthetic ruby) are distinct and fall under CTH 7104, and accordingly, jewellery with such stones is correctly classifiable under residual entry CTI 71131149. He submits that prohibited goods do not warrant provisional release especially where goods are prohibited; DRI, Ahmedabad clearly opined, vide letter dated 02.03.2026, that goods imported in contravention of policy restrictions ought not to be released into the domestic market. 8. Learned authorised representative counters each of the contentions raised in grounds appeal filed and submits that as the Appellant was given personal hearing on 24.04.2026 and as test reports were part of seizure documents, no prejudice was caused to the appellants; panchnama records physical verification and misdeclaration is in classification and not in description; test report confirmed the presence of synthetic stones, which counters the claim of natural....
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....nue is of the opinion that the impugned goods are classifiable under CTI 7113 1149. The appellants submit that Chapter 71 explicitly contemplates articles set with "precious or semi-precious stones (natural, synthetic or reconstructed)", and does not restrict the scope of jewellery to only natural stones; once cubic zirconia is recognized as a semi-precious stone, any article of jewellery incorporating such a stone becomes classifiable as an article containing semi-precious stones, and cannot be excluded from such classification merely on the ground that the stone is synthetic; primary reasoning adopted by the department that the goods are liable to confiscation on account of alleged misclassification under Chapter 71, is wholly unsustainable and submitted that Classification is, by its very nature, a matter of interpretation of tariff entries read with Chapter Notes and the General Rules for Interpretation, and cannot be treated as a concluded finding at the stage of seizure. The appellants further contend that: * the Department has erroneously interpreted Chapter Note 9 to Chapter 71 of the Customs Tariff Act by reading into it a requirement that only "natural precious o....
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.... of the Land. The shift from CT1 71131149 to 71131145 post- notification proves mens rea. I find that this is not a technical error but a deliberate fraud attempt on the statute. It is a settled legal principle that fraud vitiates everything. 13. On going through the records of the case, the rival submissions, the impugned order and the statutory provisions as they relate to the impugned goods, we find that both the appellants and the Revenue have given elaborate submissions harping on the correctness of the classification arrived by them. However, we find that the issue of classification is not of concern at this juncture as the proceedings in the case regarding classification are yet to be finalised. The impugned order refuses to entertain the request of the appellants for provisional release of the goods imported by the appellant for the reason that they are restricted. Therefore, the issue that needs to be decided in the instant case is not about the classification of the goods but is about whether the impugned goods, which are restricted as per revenue can be provisionally released or not. In case they are held to be released what should be the conditions, under which they ....
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....onale of the case of Its My Name (supra) has since been followed by Hon'ble Delhi High Court subsequently in cases like Shanus Impex (2024) 15 Centax 129 (Del.) and M/s. Nageswara Trade 2025 (8) TMI 1014 - Delhi HC]. In these cases, the High Court reiterated that the Revenue cannot completely deny or prohibit the provisional release of goods by invoking the voided conditions of Circular 35/2017. 17. Hon'ble High Court of Delhi held in Shanus Impex 2024 (388) ELT 78 (Del) that 3. It is contended that the discretion granted by the statute to the adjudicating authority is curtailed by the impugned Circular. It is also contended that the said issue is covered by the decision of the Coordinate Bench of this Court in Additional Director General (Adjudication) v. M/s Its My Name Pvt Ltd.: Neutral Citation No. 2020: DHC:2014-DB = 2021 (375) E.L.T. 545 (Del.). 4. This petition was listed yesterday (that is, on 7-12-2023) and this Court had passed the following order: 1. The petitioner has filed the present petition, inter alia, praying as under: " (a) Issue the writ of certiorari or any other appropriate writ, order or direction in the nature of declar....
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....g cases: Goods prohibited under the Customs Act, 1962 or any other Act for the time being in force; (i) Goods that do not fulfill the statutory compliance requirements/obligations in terms of any Act, Rule, Regulation or any other law for the time being in force; (ii) Goods specified in or notified under section 123 of the Customs Act, 1962; (iii) Where the competent authority, for reasons to be recorded in writing believes that the provisional release may not be in the public interest. 2.1 Seized imported goods shall be released provisionally by the competent authority upon request of the owner of the seized goods, subject to executing a Bond for the full value/estimated value of the seized goods. 2.2 Further, in addition to the Bond mentioned at Para 2.1 above, the competent authority shall take a Bank Guarantee or Security Deposit to cover the following (i) The entire amount of duty/differential duty leviable on the seized goods being provisionally released; (ii) amount of fine that may be levied in lieu of confiscation under section 125 of the Customs Act, 1962 at the time of adjudication of the case. While....
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....toms Act with effect from 13-72006. Since this provision is relevant, the same as it stands today is extracted hereunder: "110A. Provisional release of goods, documents and things seized [or bank account provisionally attached] pending adjudication. - Any goods, documents or things seized [or bank account provisionally attached] under section 110, may, pending the order of the [adjudicating authority], be released to the owner [or the bank account holder] on taking a bond from him in the proper form with such security and conditions as the [adjudicating authority] may require." 12. From a reading of Section 110A, as extracted above, it is evident that any goods, documents or things seized or bank account provisionally attached under Section 110 may, pending the order of adjudicating authority, be released to the owner or the bank account holder on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require. Thus, this provision confers a right on the owner to seek provisional release of seized goods etc., while at the same time a corresponding discretionary power is vested on the adjudicating authority who ....
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.... Customs Act,1962, even though the goods may be held to be prohibited or restricted on final adjudication. It is an interim measure to be taken during the investigation or adjudication to protect the commercial interest attached to the goods. At the stage of provisional release itself, it cannot be concluded that the goods are prohibited or restricted. Such a confirmation would indicate a pre-meditated mind of the authority well before the final adjudication and defeats the very purpose or process of adjudication. It is precisely in this context, legislature did not put any strings, under Section 110A, regarding provisional release of goods that may be later held to be prohibited or restricted. Provisional release allows the owner of the goods to deal with them commercially in the interim while the matter is being resolved. He may be penalized for the acts of commission or omission on passing the final order. The adjudication process determines the final outcome of the case including whether the goods are liable to be confiscated or whether any penalties or duties are owed. 23. We find that the unmissable outcome of the above discussion and the jurisprudence that evolved over a ....