The Mumbai bench of Customs, Excise and Service Tax Appellate Tribunal has reduced floor limits of bond and bank guarantee prescribed for allowing the provisional release of confiscated goods.
The appellant, Amglo Resources Pvt Ltd entered into negotiations with M/s NBJ International FZ-LLC, Dubai for the supply of ‘copper cathode’ conforming to LME Grade “A”. In pursuance of the negotiation imported four consignments at ICD, Tumb, and one at Jawahar Custom House, Nhava Sheva. The importer had been intimated by the supplier that these were of Zambian origin and, in due course, had been furnished with a certificate which was, in turn, produced at the two places of import.
The investigators concluded that the goods are of Iranian origin and seize the consignments on 2nd February 2022 under section 110 of the Customs Act, 1962. The adjudicating authority required execution of a bond for five times the value of the goods and furnishing of a bank guarantee for 15 percent of the value of the goods for the release of goods. On appeal, the Tribunal directed to release the goods on bond for the value of the goods and bank guarantee for ₹1,00,00,000.
During the above proceedings, the consignment imported at Nhava Sheva was also seized, under the authority of section 110 of Customs Act, 1962, on 1st March 2022 under section 111 (m) of Customs Act, 1962 for consequential misdeclaration of value to the extent of ₹9,19,79,886.72. The authority requires a bond for the revised value of the goods along with a bank guarantee covering estimated differential duty of ₹ 1,90,67,802, a probable redemption fine of ₹6,70,34,552 under section 125 of Customs Act, 1962, and a bank guarantee of ₹ 2,00,00,000 covering penalty likely to be imposed under Customs Act, 1962 for the release of the consignment.
The counsel for the appellant submitted that the value of such goods has little to do with the place of origin, even if it did happen, has no bearing whatsoever on the value of the goods. The appellant counsel further submitted that it is not their responsibility, but that of the supplier, to secure and furnish a certificate of origin, and the intended proceedings under Customs Act, 1962 are fraught with the danger of erroneous construction and trappings of misadventure.
The Tribunal observed that circular no. 35/2017 of Central Board of Excise & Customs (CBIC) banning the exercise of such authority for certain categories of imports and establishing the floor limits of bond and bank guarantee to be prescribed for allowing provisional release.
The Coram of Mr. C J Mathew, Member (Technical), and Mr. Ajay Sharma, Member (Judicial) has held that “considering the estimation adopted by the adjudicating authority and by application of the principles supra, the provisional release of the seized goods is permitted subject to furnishing of bond for the value of the goods and execution of bank guarantee of ₹ 50,00,000”.
Mr. Jitendra Motwani with Mr. Rizwan Khatri, Advocates appeared for the appellant and Mr. Manoj Das appeared for the respondent.
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