Legal principle

Conditions of provisional release under section 110A must satisfy the 'golden mean' — the Tribunal can interfere where excessive bond or bank guarantee requirements amount to effective denial of release, and the section 129E pre-deposit should generally be the benchmark for reasonable security.

Court decision

The Tribunal allowed the application for early hearing and substantially allowed the appeal: it held that effective denial of provisional release through impossibly harsh conditions is as much a ground for appellate interference as outright denial, and it modified the terms of provisional release, permitting release of the seized goods on furnishing of a bond for the value of the goods and a bank guarantee of ₹50,00,000 only.

Facts

M/s Amglo Resources Pvt Ltd imported five consignments of 'copper cathode' (LME Grade 'A') from M/s NBJ International FZ-LLC, Dubai, claiming Zambian origin supported by certificate no. N 2741/08.11.2021. Investigators concluded the goods were of Iranian origin misdeclared, and the four consignments at ICD Tumb were seized under section 110 of the Customs Act, 1962 on 2nd February 2022, with the lone Nhava Sheva consignment seized on 1st March 2022 in the reasonable belief of liability to confiscation under section 111(m) for misdeclaration of value of ₹9,19,79,886.72. The adjudicating authority allowed provisional release under section 110A on onerous terms: bond of ₹44,68,97,008 backed by bank guarantees totalling ₹10,61,02,354 covering differential duty, probable redemption fine under section 125 and likely penalty. The importer appealed to the Tribunal seeking modification of these terms to match the lighter terms earlier fixed by a coordinate bench for the four Tumb consignments (bond for value of goods plus bank guarantee of ₹1 crore), and also applied for early hearing.

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 151A, Customs Act, 1962 — Instructions to officers of customs
• Section 125, Customs Act, 1962 — Option to pay fine in lieu of confiscation
• Section 124, Customs Act, 1962 — Issue of show cause notice before confiscation of goods etc
• Section 18, Customs Act, 1962 — Provisional assessment of duty
• Section 138B, Customs Act, 1962 — Relevancy of statements under certain circumstances
• Section 26, Customs Act, 1962 — Refund of export duty in certain cases
• Section 111, Customs Act, 1962 — Confiscation of improperly imported goods etc