M/s P.V. Enterprises vs Commissioner Of Customs

This Appeal is directed against the communication dated November 20, 2020 sent by the Deputy Commissioner of Customs, ICD Sanathnaga, Hyderabad, by which the Appellant has been informed that the Commissioner of Customs, Hyderabad, has ordered for provisional release of the goods in terms of section 110A of the Customs Act, 1962 subject to furnishing of provisional duty bond for Rs. 1,34,69,129/- and bank guarantee for Rs.10,36,33,374/- to cover the customs duty and adjudication liabilities. It is stated that the Appellant imported certain goods for home consumption for which Bill of Entry dated July 20, 2020 was filed. The goods were, however, seized under Panchnama dated July 29, 2020. The Appellant filed an Application under section 110A of the Customs Act for provisional release of the goods and it is on this Application that the Deputy Commissioner of Customs, ICD, Sanathnagar, informed the Appellant about the order passed by the Commissioner for submission of provisional duty bond and bank guarantee. The said communication of the Deputy Commissioner of Customs dated November 20, 2020 is reproduced below :

" Please refer to your Consultant V. Raghunath (Authorized legal Representative) letter dated 31.10.2020 requesting for provisional release of the goods on the above subject.

It is to inform that the Commissioner of Customs, Hyderabad is pleased to order for provisional release of the impugned goods imported vide Bill of Entry No. 8216469 dated 20.07.2020 in terms of section 110A of the Customs Act, 1962 subject to furnishing of Provisional Duty Bond for Rs. 1,34,69,129/- (Rupees One Crore Thirty Four Lakhs Sixty Nine Thousands One Hundred and Twenty Nine) and Bank Guarantee for Rs. 10,36,33,374/- (Rupees Ten Crores Thirty Six Lakhs Thirty Three Thousands Three Hundred and Seventy Four) to cover the Customs Duty and Adjudication liabilities."

Relying upon the provisions of Section 110 A of the Customs Act, learned Counsel appearing for the Appellant has submitted that the Adjudicating Authority can release the goods on taking a bond from the owner in a proper form with such security and conditions as the Adjudicating Authority may require, but in the instant case, the Deputy Commissioner has merely stated that the Commissioner, who is the Adjudicating Authority, has provisionally released the goods on execution of a Bond of Rs. 1,34,69,129/- and furnishing of bank guarantee/security of Rs. 10,36,33,374/- without giving any reasons for arriving at such a conclusion. He, therefore, submits that the order is non-speaking order, more particularly when the order passed by the Commissioner has also not been made known or enclosed with the communication of the Deputy Commissioner.

Section 110 A of the Customs Act, which deals with the provisional release of goods pending adjudication, is reproduced as under:

"SECTION 110A. Provisional release of goods, documents and things seized or bank account provisionally attached pending adjudication. - Any goods, documents or things seized or bank account provisionally attached under section 110, may, pending the order of the adjudicating authority, be released to the owner or the bank account holder on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require."

A perusal of the aforesaid section indicates that the Adjudicating Authority may, pending the final order, release the goods to the owner on taking a bond from him in the proper form with such security and conditions as the Adjudicating Authority may require. Thus, the Adjudicating Authority has to take a decision and the owner of the goods is required to be apprised of the reasons culminating in the provisional release order.

In the present case, the Deputy Commissioner of Customs has merely informed the Appellant that the Commissioner of Customs had ordered for provisional release of the goods. In the submissions filed by the Department, the Department has not placed on record the order that might have been passed by the Commissioner. In fact, in similar matter which came up before the Tribunal in Rudras Overseas vs Commissioner of Customs, Customs Appeal NO. 50873 of 2020 decided on 24.09.2020 the Tribunal was informed that a notesheet was put up before the Commissioner for signatures and it is this order which was said to be passed by the Commissioner. While dealing with such an order, the Tribunal passed the following order :

"8. ......In the present case, it transpires that the office put up a note indicating the value of bond and the value of bank guarantee/security and this note has merely been signed by the Commissioner. It also needs to be noted that even the note was not supplied with the order. Such a procedure does not satisfy the requirement of Section 110A of the Customs Act. The order passed by the Commissioner must indicate application of mind and contain reasons for passing an order for provisional release. Each case has to be considered on the basis of the facts brought to the notice of the Commissioner.

We, therefore, have no hesitation in observing that the communication dated April 27, 2020 for provisional release of goods should be set aside.

Such goods are stated to be for human consumption and liable to deterioration. The Commissioner shall, therefore, pass an order for provisional release of the goods in the light of the observations made above within a period of one week from the date a copy of this order is served upon by the Commissioner by either of the parties.

It has been stated by the learned Counsel for the appellant that a notice has been issued for disposal of the seized goods. In the circumstances mentioned above, when an order of provisional release has to be passed, the goods seized shall not be disposed for a period of eight weeks from today.

The appeal is, accordingly, allowed. The communication dated April 27, 2020 is set aside and the appeal is allowed to the extent indicated above and with the aforesaid directions."

Since the order communicated to the Appellant is similar to the communication dated April 24, 2020 that was received in the Appeal filed by Rudra Overseas, it would be proper if a similar order is passed in this case.

In the present case also the goods are stated to be for home consumption and liable to deterioration. The Commissioner shall, therefore, pass an order for provisional release of the goods in the light of the aforesaid observations within a period of two weeks from the date of copy of the order served upon the Commissioner by the Appellant.

At this stage, the learned Counsel for the Appellant has stated that steps are being taken by the Department for disposal of the seized goods. In such circumstances, when an order for provisional release of the goods has been passed by the Commissioner, it is ordered that the goods seized shall not be disposed of for a period of eight weeks from today. The communication dated November 20, 2020 is set aside. The Appeal is, accordingly, allowed to the extent indicated above.

(Dictated & pronounced in open Court)