Legal principle

Goods seized under Section 110 must be dealt with under Section 110A — releasable to the owner pending adjudication on a bond with such security and conditions as the Commissioner requires — and once the adjudicating authority considers the documents produced (such as the BRC) and passes orders in accordance with law, the owner is entitled to release of the goods.

Court decision

The writ petition was allowed: the mandamus sought, to direct the respondent to grant provisional release of the goods on adjudication of the matter, was ordered, with the respondent directed to pass appropriate orders in accordance with law and on merits on the basis of the personal hearing dated 01.12.2011 and the BRC produced on 05.12.2011 (endorsed 12.12.2011), and thereafter to release the goods. No costs; the miscellaneous petition was closed.

Facts

M/s. Umang Overseas, a partnership firm, exported polyester fabric to Afghanistan under six shipping bills dated 21.01.2011 and 02.02.2011, declaring FOB values of about Rs.3.05 crore and Rs.3.09 crore and claiming DEPB benefits of about Rs.25 lakh per consignment. After let export orders were given (one container having left territorial waters), DRI alleged overvaluation to claim higher incentives and inferior quality, recalled one consignment and stopped the other, seizing both by Mahazar dated 01.03.2011 and 02.03.2011. The Department reduced the declared value from about Rs.134-135 per yard to Rs.20 per yard (to roughly Rs.45.60/45.75 lakhs) and correspondingly slashed the DEPB claims. Petitioner's letters seeking provisional release went unanswered; a DRI show cause notice dated 24.08.2011 followed, a personal hearing was held on 01.12.2011, and the petitioner claimed to have produced the BRC on 05.12.2011 (endorsed by the Commissioner's office on 12.12.2011), leading to this writ petition for mandamus for provisional release under Section 18 read with Section 110A.

Key provisions

• Section 18, Customs Act, 1962 — Provisional assessment of duty
• Section 110, Customs Act, 1962 — Seizure of goods, documents and things
• Section 110A, Customs Act, 1962 — Provisional release of goods, documents and things seized
• Rule 8, Customs Valuation (Determination of Value of Export Goods) Rules, 2007 — Rejection of declared value
• Section 51, Customs Act, 1962 — Clearance of goods for exportation