Legal principle

Provisional release of seized goods under section 110A is an independent proceeding that must be allowed immediately upon seizure notwithstanding pendency of adjudication, and the security demanded must be reasonable—with the section 129E pre-deposit serving as the benchmark—rather than punitive.

Court decision

The Tribunal allowed the appeals and modified the impugned order to grant provisional release of the remaining seized goods to the appellant upon execution of a bond for the value of the goods and furnishing a revenue deposit of ₹5,00,00,000 within seven days of service of the order; entries for export filed under section 50 were to be disposed of expeditiously in accordance with section 51. The seizure itself, being undisputed, was not set aside. The Tribunal deprecated Revenue's characterization of the statutory appeal as abuse of process and held that customs authorities cannot determine lack of ownership except in circumstances of rival claim. Decision in favour of the appellant-importer on the question of provisional release.

Facts

Dinesh Bhabootmal Salecha imported two consignments (bill of entry no. 642461/26.11.2021 of M/s Salecha Electronics Inc and no. 6414624/26.11.2021 of M/s 2000 Semiconductor) declared as memory cards, which were found to also contain undeclared 'iPhone 13 Pro' handsets (1826 and 1705 numbers respectively), with combined values of ₹14,81,96,804.73 and ₹12,86,96,766.83 for declared and undeclared goods. The goods were seized by DRI under section 110 of the Customs Act, 1962 in the reasonable belief that they were liable to confiscation under section 111, and some of the goods were disposed of by DRI under the procedure in section 110(1A) even before confiscation. Show cause notices dated 25th May 2022 were issued proposing confiscation and other detriments. The appellants sought provisional release of the seized goods under section 110A, but the Commissioner of Customs (Import), Air Cargo Complex, Mumbai, by Order-in-Original dated 23rd/24th May 2022, declined the request, prompting these appeals before the CESTAT Mumbai.

Key provisions

• Section 110A, Customs Act, 1962 — Provisional release of goods, documents and things seized
• Section 110, Customs Act, 1962 — Seizure of goods, documents and things
• Section 111, Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 124, Customs Act, 1962 — Issue of show cause notice before confiscation of goods etc
• Section 150, Customs Act, 1962 — Procedure for sale of goods and application of sale proceeds
• Section 126, Customs Act, 1962 — On confiscation property to vest in Central Government
• Section 125, Customs Act, 1962 — Option to pay fine in lieu of confiscation
• Section 151A, Customs Act, 1962 — Instructions to officers of customs
• Section 51, Customs Act, 1962 — Clearance of goods for exportation
• Section 28, Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded
• Section 138B, Customs Act, 1962 — Relevancy of statements under certain circumstances
• Section 11, Customs Act, 1962 — Power to prohibit importation or exportation of goods