The Central Board of Excise & Customs (CBEC), vide Circular No. 35/2017 – Customs, dated 16th August 2017 issued guidelines for provisional release of seized imported goods pending adjudication under Section 110 of the Customs Act, 1962

Section 110A 

Any goods, documents or things seized under Section 110, may, pending the order of the Adjudicating authority, be released to the owner on taking a bond from him in the proper form with such security and conditions as the Adjudicating authority may require.

Latest Guidelines – In Brief 

1. Seized imported goods shall be released provisionally, upon request of the owner of the seized goods, subject to executing a Bond for the full value / estimated value of the seized goods.

2. In addition to the Bond, a Bank Guarantee or security Deposit to cover –

  • The entire amount of duty/differential duty leviable on the seized goods;
  • Amount of fine that may be levied in lieu of confiscation under Section 125 of the Act;
  • Amount of penalties that may be levied under the Act as applicable at the time of adjudication.
  • The competent authority may increase or decrease the amount of Security Deposit.

3. The adjudicating authority, specifying the reason, may deny provisional release of any goods which are liable to confiscation under Section 111 or 113 or as defined as “ Prohibited Goods under section 2(33)”.

(Malabar Diamond Gallery Private Limited v. Addl. Director General. DRI, Chennai).

4. Distinction between Provisional Assessment & Provisional Release:

The Hon’ble Madras High Court, in the above case, held that although the import of gold was not prohibited, if the import was in violation of the Conditions attached to such import amounts to smuggling and that a prayer for release could be refused.

Further, the Hon’ble Delhi High Court in Mala Petrochemical & Polymers V. The Addl. Director General, DRI & Anr, held that the power under Section 110A of the Act involves exercise of discretion & the scope of judicial review if the discretion has been rightly exercised, that treatment of all types of wrongful imports on an equal footing might result in miscarriage of justice, hence the said Section leaves some margin to the Customs in the exercise of their discretion.

5. The Bond shall contain an undertaking that the importer shall pay the duty, fine and or penalty as the case may be adjudged by the Adjudicating Authority.

6. Further, where security is furnished by way of Bank Guarantee, the Bank Guarantee should contain a clause binding the issuing Bank to keep it renewed valid till final adjudication of the case. In the case of non-renewal of guarantee, the guaranteed amount be credited to the Government account by the Bank on its own.

7. Where Provisional Release of seized goods shall not be allowed –

  • Goods prohibited under the Customs Act, 1956 or any other Acts
  • Goods that don’t fulfill the statutory compliance requirements in terms of any Act, Rule or Regulatory etc.
  • Goods specified under Section 123 of the Act.
  • For reasons in the interest of Public.

8. However, the issues of Provisional release of export goods has been dealt in Circular Nos. 33/2005 dated 02.08.2005, 01/2011 dated 04.01.2011 & 30/2013 dated 05.08.2013 shall be continued.

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November 2020