Order Prescribing Conditions Of Provisional Release Is Too Harsh: CESTAT Directs Release Seized Goods

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the order prescribing conditions of provisional release was too harsh and the assessee has already paid duty amounting to Rs. 1,18,94,536.

The bench of Dr. Suvendu Kumar Pati (Judicial Member) and Sanjiv Srivastava (Technical Member) modified the conditions in the order of provisional release, stating that used equipment (capital goods) imported by the appellant and seized under seizure memo no. 107/2022 dated 4/11/2022 can be released on execution of an indemnity bond of Rs. 4,00,00,000 along with its bank guarantee of Rs. 50,00,000.

The appellant had filed a bill of entry for clearance of old, used machinery (capital goods) and declared an assessable value of Rs. 4,28,86,373/-. As per Board Circular 7/2020-Cus dated February 5, 2020, goods were required to be cleared only after examination and determination of the value by the Chartered Engineer impanelled with the customs authority. The goods were examined by the chartered engineer. Based on his reports, the assessable value of imported goods was determined, and duty was paid by the appellant on August 31, 2022.

After being out of charge on September 1, 2022, the appellants were informed that the imported goods had been put on hold by the DRI for investigations. The goods were subsequently seized under Section 110 of the Customs Act, 1962. The appellant requested the provisional release of seized goods.

The original authority directed the provisional release of seized goods except for tyres, subject to the fulfillment of two conditions. Firstly, the execution of a bond in an amount equal to the full assessable value of the seized goods. Secondly, furnish bank deposits to the tune of Rs. 8,24,26,019 to cover the differential duty of Rs. 3,24,26,019 and the requisite fine and penalty under various sections of the Customs Act, 1962.

The tribunal held that the value of the bond and security needs to be re-determined in the interest of justice, protecting the interests of both the department and the appellant.

Case Title: M/s. OSM Ecocar Pvt. Ltd. Versus Commissioner of Customs

Case No.: Custom Appeal No. 85263 of 2023

Date: 19.04.2023

Counsel For Appellant: Chirag Shetty

Counsel For Respondent: Ram Kumar

Click Here To Read The Order