The Delhi High Court has held that the prescription of onerous conditions for provisional release would not be sustainable in law.
The bench of Justice Yashwant Varma and Justice Ravinder Dudeja has observed that detention of a consignment of goods comprising of platinum alloy sheets and the release being made subject to the submission of a PD Bond equivalent to 100% of the assessable value along with a Bank Guarantee of 10.712% differential duty pending verification of the Country-Of-Origin certificate (COO) accompanying those goods are onerous conditions and liable to be quashed.
Background
The petitioner/assessee had imported platinum alloy sheets classifiable under Customs Tariff Heading 7110 1900, under 4 Bill of Entries generated between 13 to 16 July 2024. The import was effected on payment of 5% preferential duty. A similar importation was made by the petitioner under 10 Bill of Entries submitted between 14 to 19 July 2024 for identical consignments of platinum alloy sheets. The department raised various queries between 15 to 19 July 2024 and which were duly responded to by the writ petitioners.
The department held that consequent to the conclusion of the investigation by the Special Investigation and Intelligence Branch, the competent authority had been advised to assess the Bill of Entries subject to the submission of a PD Bond of 100% of the assessable value along with a Bank Guarantee of differential duty pending verification of the COO certificate regarding origin and value addition as also verification of the percentage of platinum in the imported platinum alloy sheets.
The petitioners/assessee have challenged the detention of a consignment of goods comprising of platinum alloy sheets and the release thereof being made subject to the submission of a PD Bond equivalent to 100% of the assessable value along with a Bank Guarantee of 10.712% differential duty pending verification of the Country-Of-Original certificate accompanying those goods.
Arguments
The petitioners contended that the action of the department is wholly arbitrary since no reasons have been assigned in the impugned orders which may be viewed as being even suggestive of the formation of a reasonable belief or opinion that the COO certificate or the imported articles were non-compliant with the statutory prescriptions which apply. The petitioners refer to the detailed statutory mechanism prescribed by Section 28DA of the Customs Act, 1962 read along with the Customs Tariff (Determination of Origin of Goods under the Comprehensive Economic Partnership Agreement between India and the United Arab Emirates) Rules, 2022 together with the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2024 and which compendiously create a minimum threshold which may warrant the detention of goods covered by a Trade Agreement pending verification or enquiry. The action, when tested on those parameters, is rendered wholly illegal and unjust thus warranting the intervention of the Court.
Read More: Erroneous Duty/Tax Payment Does Not Amount To Unjust Enrichment: CESTAT
Conclusion
The court noted that since an action, undoubtedly, would have serious repercussions, it cannot conceivably be left to rest on conjecture or inference.
The court, while allowing the writ petitions, quashed the orders and directed the respondent-department to reconsider the release of the imported articles with due expedition.
Case Title: M/S Ausil Corporation Pvt. Ltd Versus Union Of India
Case No.: W.P.(C) 10943/2024 & CM APPL. 45063/2024
Date: 13/09/2024
Counsel For Petitioner: Kishore Kunal
Counsel For Respondent: Asheesh Jain