The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), ruled that goods held liable for confiscation, may be released on payment of redemption fine after adjudication.
The appellant, M/s Classic Interiors imported some goods. Directorate of Revenue Intelligence received intelligence that the goods were mis-declared in terms of value and also in terms of percentage of polyvinyl chloride. During investigation, the goods were seized under section 110 of the Customs Act, 19627 by Seizure Memo dated 26.07.2019; the appellant sought provisional release of the goods under section 110A.
After considering the submissions made by the appellant the Additional Commissionerpassed the order of provisional release. Aggrieved, the appellant appealed the Commissioner (Appeals) who passed the impugned order partially allowing the appellant’s appeal by reducing the bank guarantee for provisional release to 10% of the value of the goods but otherwise upholding the order of the Additional Commissioner. Hence the present appeal.
The Counsel for the appellant submitted to waive the requirement of bank guarantee for provisional release. He submits that after the seizure, a show cause notice which has since been issued proposing recovery of differential duty, confiscation of the goods under Section 111(l) and 111(m)and imposition of penalties under Section 114A and 114AA.
The Counsel submitted that since the entire duty demanded in the SCN has already been paid, he prays that the condition of 10% bank guarantee for provisional release of the goods may be waived and the seized goods may be released provisionally without any bank guarantee on a bond for the full value of the goods.
The Bench comprising Justice Dilip Gupta, President and PV Subba Rao, Technical Member observed that “After adjudication, if the goods are held liable for confiscation, they may be released on payment of redemption fine. The present case of provisional release of goods needs to be seen in this context.”
“If the goods are confiscated and allowed redemption on payment of fine such fine has to be recovered from the appellant and some security is necessary to cover it if the goods are to be released provisionally before adjudication itself. Considering the overall factual matrix of this case we modify the impugned order reducing the amount of bank guarantee to 5% of the value of the goods” the Bench noted.
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