6 HIGH COURT OF DELHI: NEW DELHI + W.P.(C) 5677/2007 % Decided on: September 18. 2007 M/S EURO ASIA GLOBAL THR. ITS PROPERIETOR SANGIT K.K.AGRAWAL Petitioner Through Mr.Pradeep Jain with Mr.Prem Ranjan Jha, Mr.Sidharth, • Advocates versus COMMISSIONER OF CUSTOMS INLAND CONTAINER DEPOT TUGHLAKABAD, NEW DELHI & ANR. Respondents Through Mr.Sanjay Katyal with Mr.P.S. Gulati, Advocates CORAM: HON'BLE MR. JUSTICE MADAN B. LOKUR HON'BLE DR. JUSTICE S. MURALIDHAR ^ 1. Whether the Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes WP(C) No.5677/2007 Page 1 of 12 Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified ORDER CM No. 10529/2007 By this application under Section 151 of the Code of Civil Procedure the Petitioner seeks release of goods imported under bill of entry no. 583202 dated 24th April, 2007 on a value of US$ 1.90 per meter pending adjudication; a direction to Respondent No.2 to release the seized Indian currency of Rs.23.90 lakhs and to prohibit the said Respondent from requiring the Petitioner to maintain a minimum balance of Rs. 4.89 lakhs in the bank accounts of the Petitioner. 2. The case of the Petitioner is that he is a regular importer of PU coated fabric. According to the Petitioner, he has been importing this fabric of 1.0 m.m. + - 3% thickness over a period of time and it is stated that over 300 ^ such importshave been made from timeto time. 3. When the Petitioner imported the goods under the present bill of entry bearing number 583202 at the rate of US$ 1.55 per meter, the Respondents took action to seize these goods. WP (C) No.5677/2007 Page 2 of 12 4. Earlier, the Respondents had searched the premises of the Petitioner in respect of imports made of PU coated fabric which were cleared by the Customs authorities. During the search, the Respondents seized cash worth Rs. 23.90 lakhs and also issued orders to the banks of the Petitioner to ensure that the Petitioner maintains a minimum balance of Rs.4.89 lakhs, the total amount, according to the Respondents, representing the sale proceeds of smuggled goods. ^ 5. Insofar as the first prayer is concerned, namely, release of the goods at the rate of US$ 1.90 per meter, although the Petitioner has stated in the bill of entry that the value of goods is US$ 1.55 per meter, learned counsel for the Petitioner states that without prejudice to his rights and contentions he is prepared to clear the goods at the rate of US$ 1.90 per meter. ^ 6. Accordingto the Respondents,the valueof the goods is US$ 5.50 per meter and the differential duty comes to Rs.12,08,391/-. 7. It appears that there are two controversies that have arisen in this regard. The first controversy is with regard to the thickness of the imported WP (C) No.5677/2007 Page 3 of12 % goods. Accordingto thePetitioner,the thicknessoftheimportedmaterialis 1.0 m.m. +- 3%, while according to the Respondents the thickness is much more and therefore, the value of the imported goods is much more. 8. . We may note that the bill of entry for clearance of the goods was filed on 24th April, 2007. The Respondentson their own showing did not take any action to ascertainthe thicknessof the goods until 13thJune, 2007, when the matter was referred to the Central Research Chemical Laboratory C ('CRCL'). We have been told by learned counsel for the Respondents that certain procedural formalities were not complied with when the samples were taken and therefore, fresh samples were taken in July, 2007 and the report from the CRCL is still awaited. In the absence of any material to the contrary, we have no option but to believe the Petitioner when it says that the thickness of the imported PU coated fabric is 1.0 m.m. +- 3%. 9. We may note our surprise that even though about five months have gone by, the Respondents have not been able to ascertain the thickness of WP (C)No.5677/2007 Page 4 of12 the imported goods which itself may lead to other complicationssuch as chargesfor warehousing,etc. Butwearenotpresentlyconcernedwith that. 10. The second controversy that has arisen in this regard is whether the Respondentshave correctlydeterminedthe value of the importedgoods at the rate of US$ 5.50 per meter. sv:. 11. Learned counsel for the Petitioner submitted that apart from a large numberofimportsmade by the Petitioneritselfon a valueofUS$ 1.55 per meter which have been cleared by the Customs authorities in ICD, Tughlaqabadat US$ 1.90per meter,a largenumberof otherimportershave made importsfrom 3rd October,2006 till 24"" April, 2007, and PU coated fabrics of 1.00 m.m. thickness have been cleared by the Customs authorities at US$ 1.90 per meter. It is submitted by learned counsel that under these circumstances, there is no reason why the iinports made by the Petitioner should be valued at US$ 5.50 per meter. 12. Apart from this, learned counsel for the Petitioner has drawn our attention to a circular dated 30th August, 2005, issued by the Customs WP (C) No.5677/2007 Page 5 of12 4 4 authoritiesin Mumbaiwherein PU coated fabric of thickness 1.0 mm has beenvaluedat US$ 1,90permeter. 13. In view of the above, it appears to us that in the absence of any I determination having been made by the Respondents for almost five months about the thickness of the imported material, we have to proceed on the basis of the thickness given by the Petitioner, that is, the PU coated fabric has a thickness of 1.0 mm, + - 3%. The material placed on record regarding the value of the goods, that is, imports by other parties in ICD, Tughlaqabad and the circular issued by the Commissioner of Customs (Import), Mumbai, suggests that PU coated fabric of thickness 1.0 m.m. +- oi 3% must be valued at US$ 1.90 per meter. 14. Under the circumstances, we allow the first prayer of the Petitioner in the application and direct the Respondents to release PU coated fabric importedby, the Petitionerunderbill of entry number583202on a value of US$ 1.90 per meter. Of course, this will be provisional and pending adjudication proceedings. WP (C) No.5677/2007 Page 6 of 12 V\ •4 -j 15. Insofar as the differential amount of duty is concerned, that is, on US$ 5.50 per meter claimed by the Respondentsand US$ 1.90 per meter under which clearance is sought by the Petitioner, learned counsel for the Petitioner states that his client will furnish a bond as per Form Bll to the satisfaction of the concerned Assistant Commissioner of Customs along with a bank guarantee of 20% of the differential duty. Upon furnishing of the bond and acceptance of the bank guarantee, the Assistant Commissioner "C shouldtake immediatesteps to have the goods released. 16. Insofar as the second question is concerned, that is, for the release of an amount of Rs.23.90 seized by the Respondents and the requirement that the Petitioner should keep a minimum balance of Rs.4.89 lakh in its bank accounts, learned counsel for the Respondents has explained that the source y of powerfor the seizureemanatesfrom the reason to believethat has been placed on record at page 52 of the paper book read with Section 2(22), Section 110 and Section 121 of the Customs Act, 1962. 17. The contention of learned counsel for the Respondents is that the WP (C) No.5677/2007 Page 7 of 12 Indian currency represents the sale proceeds from smuggled goods and therefore, the Respondents are well within their rights to seize the currency. 18. Upon going through the reason to believe that has been recorded by the authoritieson 10'^ January, 2007 (page 52 of the paper book), we find that the sale proceedsare ofimportedgoods and thereis nothingto suggest thatthe goods are smuggledgoods. In fact, the sale proceedsare in respect of goods importedby the Petitionerand clearedby the Customsauthorities fromtimeto time. Thesegoodscannotbe saidto be smuggledgoods. 19. Even though there is adisputein respectof the correctvalue of the goods,thatdoes notnecessarilyclassifythe goods as. smuggledgoods. The goods were importedby the Petitionerin accordancewith law and were clearedby the Customsauthoritiesin accordancewith law. The goods may . - havebeengrosslyunderinvoicedbutthatis adifferentmatteraltogetherand will have to be decided by the authorities as and when they initiate adjudicationproceedingsagainstthe Petitioner, 20. Learned counsel for the Respondents also drew our attention to WP (C) No.5677/2007 Page 8 of 12 Section125 of the CustomsAct and pointedout that goods importedby the Petitioner are not notified goods and therefore, the burden is on the Respondents to prove that the goods imported by the Petitioner are smuggled goods. It appears to us that at best the goods importedby the Respondentscan be said to be goods which are grosslyunderinvoicedand soldin the market. Evenif that positionis accepted,it wouldnot entitlethe Respondentsto seizethe Indiancurrencyrepresentingthe salepricebecause r U the currencyis not relatableto the saleproceedsof smuggledgoods. 21. Learnedcounselfor the Respondentsreliedupon TriptaSharma Vs. Commissionerof Customs, New Delhi, [2002] 145 DLT 519, wherein a prayer was made for release of seized currency of the petitionertherein. The DivisionBenchofthis Courtrejectedthe contentionofthe petitionerin that case because there was nothing to show that the petitionertherein claimed ownership of the Indian currency. That is not the position insofar as the present case is concerned, where the Petitionerclearly claims ownership of the Indian currency. The decision relied upon by WP(C)No.5677/2007 Page 9 of 12 •J ffl fiis Courtfo 23 gn a weeJc thereafter. 26. event the undertaking is violated, the authorised representativeof the {/ Petitionerwill be liablefor proceedingsunderthe ContemptofCourtsAct. 27. Theapplicationis disposedof as above. 28. W.P.rC) 5677/2007 The prayersthathave been madebythe Petitionerin the WritPetition are more or less similar to the prayers made in the interim application that we have dealt with above. The prayers in the writ petition are : C" - "(i) to issue a writ of certiorari, order, direction thereby quashingthe impugnedcommunicationdated 23.5.2007issued by the Respondent no.2. (ii) to issue a writ of mandamus order, direction directing the WP (C) No.5677/2007 Page 11 of12 \ > i Respondent no. 2 to permit release of the goods of the Petitioner under bill of entry no. 583202 dated 2.4.2007 on the value of US$ 1.90 per meter pending adjudication. (iii) to issue a writ of mandamus order, direction directing the respondent no. 2 to release the currency of Rs. 23.90 lakhs seized from the Petitioner's premises vide panchnama dated 10.1.2007 and also to release the currency of Rs. 4.89 lakhs which has been withheld by the Respondent no.2 lying the Petitioner's bank accounts. (iv) to pass such order or further order/s which the Hon'ble Court may deem fit and proper." 29. Since we have disposed of similar prayers made in the interim application, nothing further survives in the Writ Petition and therefore that too is disposed of in terms of the order passed in the interim application. SEPTEMBER 18, 2007 dc WP (C) No.5677/2007 MAD AN B, LOKUR, J S. MURALIDHAR, J Page 12 of 12 e-'xoii-y a&t' .