CWP No.19325 of 2010 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. CWP No.19325 of 2010 Date of decision: 18.11.2010 Shri Ram Nath Gulati -----Petitioner Vs. Union of India and others ----Respondents CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Pawan Kumar Mutneja, Advocate for the petitioner. Mr. HPS Ghuman, Sr.Standing Counsel for Union of India. Adarsh Kumar Goel,J. 1. This order will dispose of CWP Nos.19325 and 19374 of 2010 as both the petitions involve common question of validity of conditions for provisional release of goods detained by the custom authorities. 1 CWP No.19325 of 2010 2. In CWP No.19325 of 2010, case of the petitioner is that it imported worn clothing and filed bills of entry with other relevant documents for clearance of goods. The custom authorities did not allow clearance against which CWP No.13805 of 2010 was filed which was disposed of with a direction to take decision in the matter within two weeks. Thereafter order dated 3.9.2010 was passed permitting provisional release subject to certain conditions, including furnishing of bank guarantee of the value of about Rs.58 lacs, in addition to furnishing of bond of the value of Rs.83 lacs which was said to be the value of the imported goods. The said conditions were onerous, arbitrary and contrary to the Customs (Provisional Duty Assessment) Regulations 1963 (for short, ‘the Regulations’) framed under Section 18 of the Customs Act, 1962 (for short, ‘the Customs Act’). 3. In the reply filed, stand on behalf of the respondents is that the goods in question were restricted goods and could not be imported without licence as per Foreign Trade Policy 2009-2014. The petitioner did not have the licence and, thus, import of the goods was illegal. Under Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992 (for short, ‘the Foreign Trade Act’) read with Section 2(33) of the Customs Act, the goods were covered by the definition of “prohibited goods” and were, thus, liable to be confiscated on that ground, apart from ground of undervaluation. 4. During pendency of the petition in this Court, Show Cause Notice dated 25.10.2010 is said to have been issued to the petitioner requiring him to show cause within 15 days why the goods be not confiscated and customs duty demanded in addition to penalty etc. 5. We have heard learned counsel for the parties and perused the record. 6. Learned counsel for the petitioner submitted that condition requiring furnishing of bank guarantee of the value of about 70% of the 2 CWP No.19325 of 2010 goods was arbitrary and against the regulations. He has placed reliance on judgment of this Court in M/s Kundan Rice Mills Limited v. The Union of India and others, CWP No.13914 of 2008, decided on 15.12.2008, holding that bank guarantee required to be furnished should not be more than the value of 20% of the goods in view of the regulations. He submitted that since order of provisional release had already been passed, plea of goods being prohibited goods not liable to be provisionally released could not be taken. 7. Learned counsel for the respondents, however submitted that the goods being prohibited goods and liable to confiscation, the same could not be dealt with at par with other goods. He also submitted that adjudication on the issue is in progress and if the petitioner furnishes reply within the time specified in the show cause notice or latest by November 29, 2010, adjudication process will be completed by December 31, 2010. 8. Without expressing any final opinion on issue of goods being prohibited goods or their liability for confiscation, but in view of import being made without licence, we do not consider it appropriate to interfere at this stage particularly in view of stand that decision on the show cause notice will be taken on or before December 31, 2010 on reply of the petitioner and relevant documents relied upon being furnished by 29.11.2010. 9. The petitions are, accordingly, disposed of. (Adarsh Kumar Goel) Judge November 18, 2010 (Ajay Kumar Mittal) ‘gs’ Judge 3 CWP No.19325 of 2010 4