Navshakti Industries Pvt Ltd & Anr v. Commissioner of Customs & Ors

MUKTA GUPTA, J

HIGH COURT OF DELHI: NEW DELHI + LPA No. 262 of 2010 % Decided on: May 11, 2010 1. M/s Navshakti Indsutries Pvt. Ltd. 18/61, Punjabi Bagh (West) New Delhi-110026. 2. Praveen Goel, S/o K.C. Goel, Director M/s Navshakti Industries Pvt. Ltd. 18/61, Punj abi B agh (West) New Delhi-110026. Appellants Through: Mr. Neeraj Kishan Kaul, Sr. Adv. with Mr. T.P.S. Kang and Mr. M.M. Alam, Advs. Versus 1. Commissioner of Customs ICD, TKD New Delhi. 2. Additional Director General Directorate of Revenue Intelligence 6^^ Floor, Paryavaran Bhawan CGO Complex, Lodhi Road New Delhi-110003. 3. Assistant Director Directorate of Revenue Intelligence 6^*^ Floor, Paryavaran Bhawan CGO Complex, Lodhi Road Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. u New Delhi-110003. Respondents Through: Mr. Mukesh Anand with Mr. Shailesh Tiwari, Mr. Sumit Batra & Mr.R.C.S. Bhadoria, Advs. for Resp. No.l. Mr. Satish Aggarwal with Mr. Shirish Aggarwal, Advs. for Resps. 2 & Coram: HON'BLE THE ACTING CHIEF JUSTICE HON'BLE MS. JUSTICE MUKTA GUPTA 1. Whether the Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes MADAN B. LOKUR. ACJ (ORAL) The Appellants are aggrieved by an order dated 3'^'' March, 2010 passed by a learned Single Judge in WP (C) No. 2228/2008. 2. The Appellants had imported newsprint under the Open General Licence. When the goods arrived at the port, they were finally assessed to duty which was paid by the Appellants and the goods cleared. 3. Subsequently, it appears that Respondents No. 2 and 3 received some information that the goods were being diverted for purposes other than newsprint. Acting on this information, the goods of the Appellants were seized in exercise of powers conferred by Section lll(o) the Customs Act, 1962. The Appellants then sought release of the goods on a provisional basis after their seizure and an order was passed by the Respondents on 9^^ January, 2008 apparently in exercise of power conferred by Section 11 OA of the Act agreeing to the release of the goods on the following four conditions: - "(i) Payment of differential duty involved on the seized goods; (ii) Execution of bank guarantee to the extent of 25% of the seizure value; (ill) Execution of indemnity bond to the extent of full seizure value of seized goods; (iv) Execution of an affidavit by the party that he will not challenge the identity of the said seized goods during the course of adjudication or prosecution proceedings, if any." 4. The Appellants were of the view that the conditions were rather harsh and, therefore, filed a writ petition which led to the impugned order dismissing the writ petition and upholding the LPA No.262/2010 conditions imposed by the Respondents. 5. It is submitted by learned counsel for the Appellants, relying upon a Division Bench decision M/s Bhaiya Fibres Ltd. v. Additional Director General, Directorate of Revenue [WP (C) No. 8787/2007 decided on lO"' December, 2007\ that provisional release of the goods is permissible under the Customs (Provisional Duty Assessment) Regulations, 1963 and the terms and conditions therein would be applicable to the facts of this case. Reliance is placed upon Regulation 2 thereof which reads as follows: - "REGULATION 2. Conditions for allowing provisional assessment.- Where the proper officer on account of any of the grounds specified in sub-section (1) of section 18 of the Customs Act, 1962 (52 of 1962), is not able to make a final assessment of the duty on the imported goods or the export goods, as the case may be, he shall make an estimate of the duty that is most likely to be levied hereinafter referred to as the provisional duty. If the importer or the exporter, as the case may be, executes a bond in an amount equal to the difference between the duty that may be finally assessed and the provisi