Madras High Court

M/S.Radha Industries vs Commissioner Of Customs on 2 January, 2024

Author: Senthilkumar Ramamoorthy

Bench: Senthilkumar Ramamoorthy

                                                                             W.P.No.30338 of 2023


                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                DATED: 02.01.2024

                                                    CORAM

                        THE HONOURABLE MR.JUSTICE SENTHILKUMAR RAMAMOORTHY

                                              W.P.No.30338 of 2023
                                        and W.M.P.Nos.29923, 29921 of 2023

                     M/s.Radha Industries,
                     Represented by its Partner,
                     Umesh Kumar Prashar,
                     S/o.Krishan Kumar Parashar, aged 60 years,
                     4/3, Patel Nagar East, West Delhi,
                     New Delhi - 110 008.                                      ... Petitioner
                                                     -vs-

                     1.Commissioner of Customs,
                       Rajaji Salai, Customs House,
                       Chennai, Tamil Nadu - 600 001.

                     2.Deputy Commissioner of Customs,
                       Group-1, Rajaji Salai,
                       Customs House, Chennai,
                       Tamil Nadu - 600 001.                                 ... Respondents




                     PRAYER: Writ Petition filed under Article 226 of the Constitution of

                     India, pleased to issue a Writ of Certiorarified Mandamus, calling for


                     1/10


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                                                                                  W.P.No.30338 of 2023


                     the records of the 2nd respondent with respect to provisional

                     assessment of Bill of Entry No.6570809 dated 24.06.2023 and quash

                     the condition to furnish bank guarantee equal to 105% of the value of

                     goods and bond equal to 100% of the value of goods which has been

                     imposed, and consequently direct the respondents to immediately

                     release the goods imported by the petitioner vide Bill of Entry

                     No.6570809 dated 24.06.2023 unconditionally.



                                       For Petitioner     : Mr.Mukul Singla

                                       For Respondents    : Mrs.R.Hemalatha,
                                                            Senior standing counsel

                                                          **********

                                                          ORDER

The petitioner assails the conditions imposed in relation to the

provisional assessment of Bill of Entry No.6570809 and seeks a

consequential direction for the unconditional release of goods

imported under the above mentioned Bill of Entry.

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2. The petitioner is an importer of areca nuts. According to the

petitioner, areca nuts were imported from Sri Lanka under Bill of

Entry No.6570809 on 24.06.2023. In accordance with the free trade

agreement between India and Sri Lanka, it is stated that these goods

are exempt from customs duty. For purposes of availing of such

exemption, the petitioner states that a certificate of origin is required

to be produced and that the petitioner produced such certificate of

origin from the Department of Commerce, Sri Lanka. On the alleged

ground that the certificate may not be genuine, the petitioner states

that onerous conditions were imposed when the goods were

provisionally assessed. The present writ petition was filed in the said

facts and circumstances.

3. Learned counsel for the petitioner invited my attention to the

certificate of origin and pointed out that the said certificate of origin

contains a QR Code. Consequently, when a request was made for

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issuance of a verification certificate, the High Commission of Sri

Lanka refused to do so by pointing out that the QR Code can be

verified in real time. According to learned counsel, verification is not

supposed to be undertaken on a mechanical basis and that the

circular dated 17.08.2021 of the Central Board of Indirect Tax and

Customs specifies that it is not necessary to verify the origin of goods

imported from the same manufacturer / producer unless the

subsequent consignment was modified with regard to manufacturing

or other origin related conditions.

4. Learned counsel also relied upon the following judgments:

1. Unique Spices v. Commissioner of Customs and another, (2019)9

GSTR – OL 28.

2. N and N Traders v. Assistant Commissioner of Customs & Others,

(2023) SCC On line Madras 5900.

3. Chalissery Kirana Merchant & others v. Union of India & Others

2015(324) ELT 112 (Ker.)

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and pointed out that in all these cases the importer was permitted to

clear the goods without providing a bank guarantee. Similarly,

learned counsel submits that the petitioner may be permitted to clear

the goods subject to provision of a bond but without insisting on a

bank guarantee.

5. In response to these submissions Mrs.R.Hemalatha, learned

senior standing counsel, submits that the Directorate of Revenue

Intelligence (DRI) had noticed that certificates of origin in relation to

imports from Sri Lanka were being fabricated. Consequently, it was

decided that such certificates of origin would be subject to scrutiny

before the relevant goods are cleared for home consumption.

6. Learned counsel further submitted that provisional

assessment was undertaken in terms of Section 18 of the Customs

Act, 1962 (the Customs Act) and that clause (c) of sub-section (1)

thereof enables further enquiry even in cases where the importer has

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produced all the necessary documents. By referring to Section 28DA

of the Customs Act, learned counsel pointed out that sub-sections 4

and 5 thereof also enable verification and release of goods subject to

furnishing by the importer of security for an amount equal to the

difference between the duty provisionally assessed and the

preferential duty claimed.

7. The admitted position is that the Bill of Entry was issued on

24.06.2023. As such, more than six months have lapsed since the

goods were brought into India. In the counter of the respondents, at

paragraph 9, there is reference to the DRI having noticed

manipulation of certificates of origin by unscrupulous importers.

However, there is nothing to indicate that the petitioner indulged in

manipulation of the certificate of origin relating to the present Bill of

Entry or any other bill of entry. It should be recognized that areca

nuts have a limited shelf-life and the risk of contamination and

deterioration of goods increases over time.

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8. By taking into consideration the revenue interest in ensuring

that duty exemption is not availed of, except in genuine cases, and

the petitioner's concern that the goods be cleared expeditiously, an

appropriate balance should be struck. In my view, this can be

achieved if the respondents are directed to complete the verification

process expeditiously and by enabling clearance against a bond if

verification is not completed within the specified time limit.

9. Accordingly, W.P.No.30338 of 2023 is disposed of on the

following terms:

(i) The first respondent is directed to conclude the verification

within a maximum period of thirty days from the date of receipt of a

copy of this order. If the certificate is found to be genuine upon such

verification, the goods shall be released without insisting on payment

of duty. On the other hand, if the certificate is found to be not

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genuine, it is open to the respondents to take further action in

accordance with law.

(ii) If the verification is not completed within the above

mentioned period of thirty days, the petitioner would be entitled to

provisional release of the goods on providing a bond for 100% of the

value of goods but without insisting on a bank guarantee. Upon

completion of verification, further action will be as indicated in

clause (i) above, i.e. based on the outcome of such verification.