Delhi HC sets aside Customs Circular imposing Discretion of Adjudicating Authority to impose Conditions, being Contrary to Section 110A of Customs Act [Read Order]

The Delhi High Court set aside customs circular imposing discretion of adjudicating authority to impose conditions, being contrary to Section 110A of Customs Act, 1962.

The petitioner, Shanus Impex, has filed the present petition impugning a Circular bearing No.35/2017-Cus dated 16.08.2017 as ultra vires the provisions of the Customs Act, 1962. The petitioner also impugns an order dated 02.12.2023 passed by respondent no.6 directing provisional release of the goods imported by the petitioner albeit on furnishing a bond equivalent to the value of seized goods of ₹3,70,24,887/- and a bank guarantee/security depositequivalent to 120% of the said amount, amounting to ₹4,44,29,864/-.

According to the petitioner, paragraph 2 of the impugned Circular runs contrary to the provisions of Section 110A of the Customs Act, which confers the discretion on the adjudicating authority to impose such conditions and demand such security as the adjudicating authority may require.

It was contended that the discretion granted by the statute to the adjudicating authority is curtailed by the impugned Circular. It was also contended that the said issue is covered by the decision of the Coordinate Bench of the Delhi Court in Additional Director General (Adjudication) v. M/s Its My Name Pvt. Ltd.

Harpreet Singh, senior standing counsel who appeared for the respondents submitted that the challenge of the impugned Circular is covered by the decision of Additional Director General (Adjudication) v. M/s Its My Name Pvt. Ltd. and that the impugned order be set aside and the matter be remanded to respondent no.6 to decide afresh.

A Division Bench comprising Justices Vibhu Bakhru and Amit Mahajan observed that “Paragraph 2 of the impugned Circular to the extent it curtails thediscretion accorded to the adjudicating authority is set aside as being contrary to the Customs Act. The impugned order is set aside and the petitioner’s application for the provisional release of the goods is restored before respondent no.6. Considering that the goods involved are perishable, respondent no.6 is directed to decide the matter afresh and pass a speaking order within a period of four working days from date after hearing the petitioner”.

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SHANUS IMPEX vs UNION OF INDIA & ORS , 2023 TAXSCAN (HC) 2072 , Anjali Jha Manish, Priyadarshi Manish, Saksham Garg , Harpreet Singh, Suhani Mathur, Jatin Kumar Gaur