Customs - Sec 110(2) – Notwithstanding provisional release order, if no SCN is issued u/s 124(a) within six months, importer is entitled to return of goods: HC
By TIOL News Service
CHENNAI, JUNE 14, 2016: THE Petitioner had imported "LED Spare Parts for lighting fixtures, Spare Parts for lighting fixtures and Capacitors for lighting fixtures" and the BoE was taken up for investigation by the officers of SIIB. The Petitioner sought for provisional release of the goods, informing that the goods are likely to get spoiled. As there was no response, the Petitioner field a Writ Petition seeking directions to release the goods and the High Court directed the respondents to pass appropriate orders. Consequently, a provisional release order was passed with the condition that that the importer should execute a bond for the full value of the goods (i.e.) Rs.96,12,271/- and on execution of the Bank Guarantee for Rs.28,61,358/- (i.e.) 110% of the estimated duty evasion amount.
According to the petitioner, the order passed by the respondent to execute the Bank Guarantee to the extent of 110% of the estimated differential duty is unsustainable. Further, the petitioner contended that in respect of the goods under seizure in terms of Section 124(a) of the Customs Act, the respondents should have issued a notice within six months from the date of seizure, failing which the goods shall be returned to the person from whose possession they were seized.
The respondents contended that there was no seizure of the goods and the petitioner was granted permission to store the goods under Section 49 of the Customs Act. Since the goods were not seized, the question of time limit of six months from the date of seizure does not arise.
After hearing both sides, the High Court held:
+ the respondents have strangely taken a stand that there is no seizure at all. If the contention of the respondents that there is no seizure at all is accepted, then the question of provisional release under Section 110-A does not arise. When the respondent had passed an order in the application filed under Section 110-A of the Customs Act, now the respondents cannot take a contrary stand stating that there is no seizure at all. The contention cannot be accepted and the same is liable to be rejected.
+ it is clear from the provisions of Section 110(2) that the prescription of a time limit for holding seized goods is deemed mandatory and the consequence of not issuing a show cause notice within the period or extended period specified is clearly spelt out to be that the "goods shall be returned to the person from whose possession they were seized", which is apparent from the combined reading of Section 110(2) and its proviso. A plain and combined reading of Sections 110(2), 124 and 110-A spells out that any order of provisional release shall not take away the right of the assessee under Section 110(2) read with Section 124 of the Act. When no action is initiated by way of issuance of show cause notice under Section 124(a) of the Act within six months or extended period stipulated under Section 110(2) of the Act, the person from whose possession the goods were seized, becomes entitled to their return. The remedy of provisional release is independent of remedy of claiming unconditional release in the absence of issuance of any valid show cause notice during the period of limitation or extended limitation prescribed under Section 110(2) of the Act. Therefore, merely because a request has been made for provisional release of goods under Section 110-A of the Customs Act and the same has been acceded to by the respondent, the same would not take away the right of the petitioner for unconditional release of the goods under Section 110(2) of the Customs Act. The right under Section 110(2) of the Customs Act is absolute and cannot be curtailed or prevented by the Department.
+ the petitioner is entitled to get release of the goods unconditionally. Accordingly, the respondents are directed to release the goods imported.
(See 2016-TIOL-1136-HC-MAD-CUS)
