1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 15.11.2011 C O R A M THE HONOURABLE MR.JUSTICE T.RAJA W.P.(MD)No.12377 of 2011 and M.P.(MD)No.1 of 2011 M/s.Shyam Petrochem Industries, Rep. By its Proprietor Mr.Anupam Agarwal, No.2, SY.No.58/10, Kudlu Village, Sarjapura Hobli, Near VGP Layout, Bangalore - 560 068. ... Petitioner Vs. 1.The Commissioner of Customs, Custom House, New Harbour Estate, Tuticorin - 628 004. 2.The Additional Commissioner of Customs(Imports), Custom House, New Harbour Estate, Tuticorin - 628 004. 3.The Deputy Director, Office of the Directorate of Revenue Intelligence, Roche Road, Solin Garden, South Beach Road, Tuticorin-628 004. ... Respondents Prayer: Writ Petition is filed under Article 226 of the Constitution of India praying to issue a Writ of Mandamus, directing the respondents herein to Release the goods viz., 71.124 MTS of Residue Wax, imported vide Bill of Entry No.4904777 dated 13.10.2011 on the value declared by the petitioner at Euro 15,971.00 totally. For Petitioner : Mr.A.K.Jeyaraj For Respondents : Mr.R.Aravindan O R D E R The petitioner M/s. Shyam Petrochem Industries, who is regular importer of Residue Wax from the manufacturer of M/s.Behran Oil Co., Iran, has imported 71.124 MTS of Residue Wax from the said manufacturer through invoice No.32-1585 dated 13.08.2011. When the said consignment reached the port of Tuticorin, on 25.09.2011, the petitioner's company has submitted the Bill of Entry No.4904777 dated 13.10.2011. 2.The learned counsel for the petitioner submitted that when they had entered into a contract with the above said manufacturer M/s.Behran oil Co., Iran, as per the contract, they had imported 71.124 MTS of Residue Wax and on that basis, they also furnished the above manufacture invoice No.32- 1585 dated 13.08.2011 by declaring the value of the goods at Euro 15,971.00 totally for 71.124 MTS and Euro 224.00 per MT. After the said Bill of Entry was forwarded to the third respondent, the Deputy Director, in the office of Directorate of Revenue Intelligence, Tuticorin, on verification of the value of the goods, it was found that the value of the goods has been under-valued and subsequently, a search also took place in the office https://hcservices.ecourts.gov.in/hcservices/ 2 premises and the residential premises of the petitioner, but they were not able to collect any incriminating documents. On that basis, it was further submitted that the goods are freely importable and when there is no restriction or prohibition for freely importing of the goods, the invoice furnished by the petitioner before the respondent is a correct invoice and the same has to be accepted by the respondents and without accepting the invoice of the petitioner, the respondents refused to release the goods. As a result, the petitioner has come up with the present writ petition. 3.The learned counsel for the petitioner further submitted that when the consignment in question had already reached the port of Tuticorin at 24.10.2011 and thereafter, the Bill of Entry was also forwarded to the third respondent for verification of the value, The consignment in question being freely importable, consist of only importable goods, the respondent department even after undertaking a search in the office of the petitioner and the residential premises and not getting any incriminating documents, can't unnecessarily delay the provisional release of the goods, which will result unnecessary demurrage charges payable by the petitioner's side. In support of his prayer, he has also relied upon two orders passed by this Court in similar circumstances. One of the orders in W.P.No.21482 of 2008 and M.P.No.1 of 2008 in the case of M/s.Arihant Clothing Private Limited vs. Commissioner of Customs, (Seeport-Imports), Custom House, No.60, Rajaji Salai, Chennai-600 001, in the said writ petition, a similar direction was also sought for from the respondent to release the goods. This Court by an order dated 30.09.2008, has issued a detailed order, directing the petitioner (a)to deposit with the authorities the custom duty payable on the value declared by him; (b)to direct the petitioner to deposit with the authorities 30% of the differential duty between the declared value and value provisionally assessed by the respondents; (c)to furnish personal bond to the satisfaction of the residential department in respect of the remaining 70% of the differential duty and thereafter a direction was also given to the authorities to assess and comply the provisions and pass orders on provisional release within a period of 10 days from the date of compliance by the petitioner of the direction given by this Court. Since this Court in a similar occasion has considered and passed a detailed order for the reason that the petitioner's goods are freely importable and the same has been unnecessarily detained without being released by the respondent, he pleaded this Court to accept the prayer to permit the petitioner to deposit the custom duty payable on the value declared by him. 4.In reply, the learned counsel for the respondents after filing a detailed counter affidavit objected that the petitioner being outside the state of Tamilnadu it would be very difficult to comply and co-operate with subsequent departmental exercise/ proceedings if the provisional release of the goods are ordered, for, even if his request is complied to pay 30% of the differential duty between the declared value and the value provisionally assessed and 70% of the personal bond to the satisfaction of the respondent. He has also further mentioned that the petitioner after receiving the summons issued by the respondent has not even furnished the other documents to enable the respondent department to reach the correct value of the goods in question. On that basis, he prayed this Court to issue a direction to pay 50% of the differential duty between the declared value and the value provisionally assessed by the respondent, by giving sufficient time to complete the entire exercise. He has also mentioned that this Court may be directed the petitioner to file an affidavit of https://hcservices.ecourts.gov.in/hcservices/ 3 undertaking to cooperate with the enquiry by the respondents. 5.Heard the parties on both sides. 6.It is not in dispute that the consignment in question, imported by the petitioner which, arrived in the port of Tuticorin on 25.09.2011, by the submission of Bill of Entry on the office of the third respondent for the verification of the value of the goods, is only freely importable goods, hence, there is no restriction or prohibition for importing the above goods. The respondent after undertaking a search on the premises of the petitioner, finding no incriminating documents available, could have asked the petitioner to pay the custom duty payable on the value declared by him. Since, the petitioner has imported only freely importable goods and having admittedly submitted his Bill of Entry dated 13.10.2011, his representation dated 24.10.2011 sent to the respondent for release of goods being not considered till date for provisional release of the above goods, as per Customs (Provisional Duty Assessment) Regulations, the goods in question covered in the Bill of Entry is exposed to severe financial burden payable in terms of demurrage charges. Section 17 of The Customs Act, obliges the respondent customs authority to examine the imported goods without any undue delay. Similarly, Section 18 of the Customs Act 1962, enables the authorities to make a provisional assessment pending production of the necessary documents by the importer, only to avoid unnecessary delay in releasing the goods which will otherwise cause unnecessary demurrage charges. Section 110A of the Customs Act is also relevant to be extracted which reads as under: “110-A.Provisional release of goods, documents and things seized pending adjudication.- Any goods, documents or things seized under Section 110, may pending the order of the adjudicating officer, be released to the owner on taking a bond from him in the proper form with such security and conditions as the Commissioner of Customs may require.” A mere reading of the above Section goes to show that any goods, documents or things seized under Section 110, may be released pending the order of adjudicating officer, to the owner on taking a bond from him in the proper form. 7.When the Act itself clearly contemplates the provisional release of the goods pending the adjudication proceedings, I do not find any impediment in issuing a direction to the respondent to the provisional release of the goods subject to the reasonable conditions. Secondly, the objections raised by the respondent that the petitioner's company is from outside the state of Tamilnadu and therefore, it would be difficult to proceed with the departmental proceedings cannot be acceptable to this Court since they have given an undertaking to execute a personal bond of 70% to the satisfaction of the respondent in addition to paying 30% of the differential duty between the declared and the value provisionally assessed. Moreover in a similar circumstances, this Court has passed an order dated 30.09.2008 made in W.P.No.21482 of 2008, by imposing the following 4 conditions, directing the respondents to release the goods. 8.In view of the above said discussions the writ petition is ordered with the following conditions viz., https://hcservices.ecourts.gov.in/hcservices/ 4 (i)The petitioner shall deposit with the authorities the custom duty payable on the value declared by him. (ii)The petitioner further deposits with the authorities 30% of the differential duty between the declared value and value provisionally assessed by the respondent. (iii)The petitioner shall furnish personal bond to the satisfaction of the respondent department in respect of the remaining 70% of the differential duty. (iv) The petitioner shall file an affidavit of undertaking to the effect that he will cooperate with the enquiry proceedings to complete the same with the respondents. (v)The authorities shall assess and complete the provisional assessment and pass orders of provisional release within a period of 10 days from the date of compliance by the petitioner of the directions given by this Court. (vi)The respondents shall complete the process of adjudication within a period of eight weeks from the date of receipt of a copy of this order and pass final orders. It is needless to state that the petitioner shall co-operate with the respondents department in the adjudication process and act as per the final orders that is passed. The writ petition is ordered on the above terms. Consequently, the connected miscellaneous petition is also closed. No costs. SD ASST REGISTRAR ( CO ) /TRUE COPY/ SUB ASST REGISTRAR srm To 1.The Commissioner of Customs, Custom House, New Harbour Estate, Tuticorin - 628 004. 2.The Additional Commissioner of Customs(Imports), Custom House, New Harbour Estate, Tuticorin - 628 004. 3.The Deputy Director, Office of the Directorate of Revenue Intelligence, Roche Road, Solin Garden, South Beach Road, Tuticorin-628 004. 1CC TO THE SPL. GOVT PLEADER SR: 40148: DM::2011:NOVEMBER:18:: W.P.(MD)No.12377 of 2011 and M.P.(MD)No.1 of 2011 15.11.2011 4P:5C:: https://hcservices.ecourts.gov.in/hcservices/