Shanus Impex Vs Commissioner of Customs (CESTAT Chandigarh)
In a recent order, CESTAT Chandigarh addressed the issue of provisional release of seized garlic imported under the South Asia Free Trade Area Agreement (SAFTA). The order entails conditions for release and the legal intricacies involved.
The case pertains to M/s Shanus Impex and M/s S.K. Overseas challenging the conditions for the provisional release of seized garlic, which was suspected to be of non-Afghanistan origin. After legal battles in the High Court, the matter was brought before CESTAT Chandigarh for adjudication.
The Commissioner’s order mandated the importers to execute a bond and furnish a bank guarantee covering the alleged differential duty, fines, and penalties. The appellants contested these conditions, citing the perishable nature of the goods and the ongoing investigation into their origin.
In analyzing the case, CESTAT Chandigarh referred to various precedents and legal principles regarding provisional release of seized goods. It noted the importance of balancing the interests of the revenue authorities and the importers while ensuring procedural fairness.
Based on the specific circumstances of the case, including the perishable nature of the goods and the ongoing investigation, CESTAT Chandigarh modified the conditions for release. It directed the importers to furnish a bond covering the full value of the goods and a bank guarantee equal to 30% of the alleged differential duty.
CESTAT Chandigarh’s order provides clarity on the conditions for the provisional release of seized goods, taking into account the specific circumstances of the case. By balancing the interests of all parties involved, the tribunal ensures procedural fairness while addressing the practical concerns associated with perishable goods. This ruling serves as a precedent for similar cases and underscores the importance of equitable relief in customs matters.
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
Brief issue involved in both these appeals, filed by M/s Shanus Impex [Appeal No. C/60765/2023-CU (DB)] and by M/s S.K. Overseas [Appeal No. C/60766/2023-CU (DB)], concerns conditions of the provisional release of seized garlic imported, availing the benefit of Notification No.99/2011-CUS dated 09.11.2011, applicable to the imports under South Asia Free Trade Area Agreement (SAFTA). On the basis of an investigation conducted by the Directorate of Revenue Intelligence, the goods imported appeared to be of non-Afghanistan origin contrary to the claim of the appellants and therefore, the same were seized. On a request made by the appellant-importers, provisional release was ordered by the Department, subject to the conditions specified therein; appellants challenged the orders vide CWPs before the Hon’ble High Court of Delhi, who set aside the impugned order and remanded the case back to the Commissioner.
2. The Commissioner vide order dated 14.12.2023 allowed provisional release subject to fulfilment of certain conditions laid down therein. The appellants challenged the conditions, specified for provisional release, by filing CWPs Nos.16429/2023 and 16430/2023 before the Hon’ble High Court of Delhi. Hon’ble High Court of Delhi, vide Orders dated 20.12.2023, dismissed the writ petitions as withdrawn and allowed the appellants to file appeal against the impugned order dated 14.12.2023, within two working days and directed the Appellate Authority to dispose of the same as expeditiously as possible.
2. Learned Commissioner, vide impugned order dated 14.12.2023, has directed M/s Shanus Impex to execute a Bond amounting to Rs.4,44,29,865/- and to furnish a Bank Guarantee for Rs.3,70,24,887/; directed M/s S.K. Overseas to execute a Bond amounting to Rs.3,14,46,822/- and to furnish a Bank Guarantee of Rs.2,62,05,685/- while binding both the importers to pay the alleged differential duty, fines and penalties. Accordingly, these appeals have been filed.
3. Shri Vikrant Kackaria, learned Counsel for the appellants, reiterates the grounds of appeal and submits that the goods were imported from Afghanistan by road to India and all the goods are covered by a Certificate of Origin issued by the authorities in Afghanistan; the investigation is still going on and it is yet to be proved that the goods were not produced in Afghanistan; moreover, the goods have deteriorated and are not likely to fetch even 50% of the imported value, on being sold; therefore, the amount of Bond and Bank Guarantee fixed/imposed is very harsh; he further submits that in respect of M/s S.K Overseas, they may be permitted to pledge a property in lieu of Bank Guarantee. He relies upon the following cases:
