Legal principle

Conditions for provisional release under Section 110A must be confined to protecting the duty actually at stake; the likely penalty and fine cannot be quantified into a bank guarantee before the authenticity of the certificate of origin has even been verified, and a custodian cannot charge rent or demurrage on goods seized or detained, so a complete waiver must be ordered when such goods are provisionally released.

Court decision

The Tribunal modified the Provisional Release Order No. KOL/CUS/PORT(PR.COMMR)/Gr.1/01/2026 dated 11.09.2026: the Bond was increased from Rs.3,77,38,872/- to Rs.9,05,73,295/- and the Bank Guarantee was reduced from Rs.9,05,73,295/- to Rs.1,00,00,000/-, on fulfilment of which the importer is eligible for provisional release of the consignment. Revenue officials were directed to issue a complete waiver order for demurrage and other charges on the detained consignment, and the appellant was permitted to fumigate the goods at its own cost under Customs supervision. Final Order No. 76440/2026 in Customs Appeal No.75826 of 2026.

Facts

The appellant imported 36,000 Kgs. of Areca Nut (CTH 0802 80 90) from M/s. Tirupati Industries Ltd., Bangladesh, and filed Bill of Entry No.2753710 dated 26.07.2026 with a SAFTA Certificate of Origin claiming exemption under Notification No.99/2011-CUS. On a DRI alert the goods were examined and seized on the suspicion that they were of Indonesian/Thai origin routed through Bangladesh. The appellant applied for provisional release under Section 110A on 24.08.2026, and the Principal Commissioner of Customs (Port), Kolkata passed the Provisional Release Order dated 11.09.2026 requiring a Bond of Rs.3,77,38,872/- and a Bank Guarantee of Rs.9,05,73,295/-. The appellant said the amounts were excessive and unreasoned, and pointed out that an earlier identical consignment from the same exporter under Bill of Entry No.5436776 dated 01.11.2025 had been allowed SAFTA benefit on final assessment on 10.04.2026. Revenue said the tariff value of US $10,785 per M.T. made the assessable value Rs.3,77,38,872/- against a declared value of Rs.1,40,05,613/-, that IGST of Rs.37,73,887/- would be payable if the Certificate of Origin failed, making the duty element Rs.4,15,12,759/-, and that the bank guarantee of Rs.9,05,73,295/- covered duty plus equivalent penalty plus fine of Rs.75,47,775/-. An Early Hearing Petition was allowed as the consignment was live.

Key provisions

• Section 110A, Customs Act, 1962 — Provisional release of goods, documents and things seized
• Regulation 6(1), Handling of Cargo in Customs Areas Regulations, 2009 — Responsibilities of Customs Cargo Service provider