The Calcutta High Court has held that the authorized carrier shall not demand any container detention charges for the goods detained by customs for the purpose of verifying entries made under Section 46 or Section 50 of the Customs Act, 1962, if the entries are found to be correct.
The bench of Justice Raja Basu Chowdhury has observed that apart from execution of bond of an amount equal to the value of the goods has been directed to furnish an amount of Rs. 3 crore as bank guarantee which is far beyond the value of the goods.
The petitioner/assessee has sought the direction upon the department to allow the petitioner to export the goods.
The department placed the order dated 17th April, 2025 intimating that the petitioner’s prayer for conditional release of goods has been allowed by the Principal Commissioner of Customs (Port), Kolkata subject to fulfillment conditions.
The petitioner contended that the FOB value of the goods is Rs. 19885906.26. Unfortunately, while passing an order of provisional release, the department has directed the petitioner to furnish the Bank guarantee for an amount of Rs. 3 crores which is much more than the value of the goods.
The department contended that the petitioner has been permitted to import the goods duty free with an obligation to export the same. Since, goods have been suspected of misdeclaration, tests have been conducted. Pending enquiry, the petitioner has been permitted to provisionally export the goods. According to him, in terms of the Circular no. 01/2022-Customs dated 4th January, 2011, ordinarily, the exporters are required to execute a bond of an amount equal to the value of the goods and furnish appropriate security in order to cover redemption of fine and penalty in case goods are found to be liable to confiscation. Having regard thereto, according to Mr. Dey, there is no irregularity on the part of the respondents in demanding a bank guarantee of Rs. 3 crore from the petitioner towards security.
The petitioner referred to the Circular No. 35/2017-Cus dated 16th August, 2017 regarding provisional release of seized goods pending adjudication by Customs authorities under Section 110A of the Customs Act, 1962. Referring to the guidelines and in particular paragraph 2.2 thereof, he would submit that the competent authority while directing furnishing of bank guarantee or security, is required to cover not only the entire amount of duty/differential duty leviable on the seized goods being provisionally released but while computing the same the competent authority is also required to take note of the market price and estimated margin of profit of the said goods. The computation made by the department was without any basis and calls for interference.
Notification No. 26/2009-Cus.(N.T.) dated 17th March, 2009 concerning Handling of Cargo in Customs Areas Regulations, 2009 and having regard to the Regulation 6(L) thereof, which records that subject to any other law for the time being in force the Customs Cargo Service Provider shall not charge any rent or demurrage on goods seized or detained or confiscated by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive Officer or examining officer, as the case may be, and also noting the notification No. 38/2018-custom (NT) dated 11th May, 2018 notifying Cargo Manifest and Regulation 2018 and in particular Regulation 10(L) thereof, which provides that the authorized carrier shall not demand any container detention charges for the good detained by customs for the purpose of verifying entries made under Section 46 or Section 50 of the Customs Act, 1962, if the entries are found to be correct.
The court held that the detention charges for the time being subject to the investigation to be made by the concerned respondents be not saddled on the petitioner, though appropriate bond/security may be obtained.
Case Details
Case Title: M/s Sterling Agro Products Vs. Union of India & ors.
Case No.: WPA 5709 of 2025
Date: 30.04.2025
Counsel For Petitioner: Rishi Raju
Counsel For Respondent: Subhankar Chakraborty
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