Permitting Seized Pakistani Origin Dry Dates To Decay Won’t Benefit Customs Dept.: Bombay High Court Directs Provisional Release

The bench of Justice M.S. Sonak and Justice Jitendra Jain has observed that permitting the perishable goods [dry dates] to decay would not benefit the customs department and would cause severe prejudice to the Petitioner. If, following the proposed investigations and adjudication, no fault is found with the imports, the goods would most likely have perished. Therefore, a balanced approach was necessary to ensure that neither party's interests or concerns suffered disproportionately. The circular dated August 16, 2017, is a step in that direction.

The Petitioner, Vortex Speciality Foods LLP seeks provisional release of the goods imported under Bills of Entry Nos. 9909289 and 9909041, both dated May 6, 2021, in 36 containers containing Dry Dates.

The Petitioner relied upon Circular No. 35 of 2017- Customs dated 16 August 2017, containing Guidelines for provisional release of seized imported goods pending adjudication under Section 110A of the Customs Act, 1962.

Clause 2.1 of the Circular states that the seized imported goods shall be released provisionally by the Competent Authority on the request of the owner of the seized goods, subject to executing a Bond for the full value/estimated value of the seized goods.

Clause 2.2 of the Circular states that further, in addition to the Bond mentioned at Clause/Para No.2.1, the Competent Authority shall take a Bank Guarantee or Security Deposit to cover the the entire amount of duty/differential duty leviable on the seized goods being provisionally released. Amount of the 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 securing the same, the competent authority shall take into account the nature of the seized goods, the duty and charges payable on the said goods, their market price and the estimated margin of profit. Amount of penalties that may be levied under the Customs Act, 1962, as applicable, at the time of adjudication of the case.

Dr Sujay Kantawala, the counsel for the petitioner submitted that the differential duty, even according to the Respondents' version, would amount to approximately Rs. 6 Crores.

However, Anil Singh, the Additional Solicitor General stated that even going by the value declared by the Petitioner, the differential duty amount would come to Rs. 7.8 Crores. The amount would be much higher, but at this stage, and without prejudice, even going by the value declared by the Petitioner, the same would come to Rs. 7.8 Crores.

Dr Kantawala stated that the Bond and Bank Guarantee from the IDFC Bank will be furnished within two weeks from today. Although we do not set a timeline for the Petitioner to furnish the Bond and Bank Guarantee, we direct that within seven days of the Petitioner furnishing such a Bond and Bank Guarantee from the IDFC Bank, the Respondents, consistent with the statement made on their behalf, must release the goods provisionally.

The court held that because investigations are currently underway, and upon conclusion of the investigations, if necessary, a show-cause notice will be issued to the Petitioner, and the Petitioner will be given a full opportunity to defend itself.

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