Nageswara Trade Vs Joint Commissioner of Customs (Delhi High Court)
Customs Circular violating sec. 110A was held void and ordered for provisional release of imported multi-functional printer and photocopier machine
Conclusion: Customs Department could not have relied upon Circular No. 35/2017-Customs dated 16 August 2017 to outrightly deny assessee’s request for provisional release, particularly when such reliance had been held to be contrary to the statutory provisions under Section 110A of the Customs Act, 1962 and therefore void. Hence, ordered for provision release of the the imported multi-functional printer and photocopier Machine on deposit of 50% of the applicable duty.
Held: Assessee’s imported consignment of multi-functional printers and photocopier machines was seized by Customs authorities under a seizure memo. Assessee argued that the seizure memo was defective, as it neither specified reasons nor was promptly provided, having been shared months after the seizure. Further, it was contended that Customs wrongly denied provisional release by relying on Circular No. 35/2017-Cus, which prohibited release of certain goods and that the said circular had already been declared void by coordinate benches of the Delhi High Court in Its My Name Pvt. Ltd. and Shanus Impex, as it exceeded the mandate of Section 110A. Assessee further submitted that similar multi-functional devices were being imported across the country and several High Courts including Telangana and Madras High Courts had ordered provisional release of identical consignments subject to conditions. Therefore, denial of release solely on the basis of the circular was arbitrary, illegal, and against the settled legal position. Customs Department argued that the goods were prohibited as they lacked Bureau of Indian Standards (BIS) certification and could not be released. Department relied on Section 46(4A) of the Customs Act and the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, to contend that such devices could pose risks and were restricted for import. It was also contended that assessee suppressed details of earlier proceedings and hence was not entitled to relief. It was held that circular unlawfully restricted the discretion vested in adjudicating authorities under Section 110A, which permits provisional release of any seized goods upon conditions. The Court also noted consistent judicial practice across High Courts allowing provisional release of similar devices, reinforcing that complete prohibition was unjustified. It said that while adjudication on confiscation or penalty may proceed, provisional release could not be barred outright. Accordingly, the bench ordered Customs to calculate applicable duty on the seized goods (valued at ₹47.56 lakh) and directed assessee to deposit 50% of the duty and furnish a bond for the balance, including any penalties. After that, the goods were to be released within one week.
