Delhi HC Slashes Bank Guarantee from 130% to 30% of Differential Duty for Release of Seized Self-Drilling Bars [Read Order]
The Court observed that the 130% bank guarantee to be disproportionate, amounting to nearly 70-80% of the value of goods. The court directed that a reduced bank guarantee of 30% of the differential duty would be just and fair in the circumstances.
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The Delhi High Court directed the Customs Department to reduce the bank guarantee required for provisional release of seized goods from 130% to 30% of the differential duty in the matter challenging the harsh conditions imposed for release of imported self-drilling bars. The seizure arose after the Customs authorities alleged misclassification of the goods under HSN code 82.07 instead...
The Delhi High Court directed the Customs Department to reduce the bank guarantee required for provisional release of seized goods from 130% to 30% of the differential duty in the matter challenging the harsh conditions imposed for release of imported self-drilling bars.
The seizure arose after the Customs authorities alleged misclassification of the goods under HSN code 82.07 instead of 73.04, thereby attracting a different duty structure. The petitioner, a regular importer, had sought provisional release under a bond without the need for a bank guarantee.
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The Customs Department, via its order dated 29th August 2024, allowed release only upon furnishing a UT bond equal to the assessable value and a bank guarantee of 130% of the differential duty.
The petitioner highlighted financial hardships due to the continued seizure since May 2024 and urged that the onerous condition of a 130% bank guarantee was unreasonable. The respondent Customs Department justified the seizure on the grounds of duty evasion and reliance on the Delhi High Court’s prior judgment in Hind Global Enterprises v. Commissioner of Customs.
The Bench comprising Justice Prathiba M. Singh and Justice Dharmesh Sharma observed that prolonging the matter further by relegating the petitioner to the appellate forum would lead to more delays, especially since the Customs Department had already agreed to provisional release in principle.
The Court observed that the 130% bank guarantee to be disproportionate, amounting to nearly 70-80% of the value of goods. The court directed that a reduced bank guarantee of 30% of the differential duty would be just and fair in the circumstances.
The court directed to release the seized goods within ten days of furnishing the modified bond and bank guarantee. The writ petition was disposed of.
To Read the full text of the Order CLICK HERE
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