Customs Cannot Withhold Part Of Consignment After Accepting Full Bond, Guarantee: CESTAT Kolkata
Pranav B Prem
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Customs authorities were not justified in continuing to detain part of a consignment of used digital multifunction print and copying machines once the importers had furnished provisional duty bond and bank guarantee covering the assessable value of the entire consignment. The Tribunal held that selective detention of goods in such circumstances was arbitrary and discriminatory and directed provisional release of the withheld machines.
The ruling was delivered by a coram comprising Judicial Member Ashok Jindal and Technical Member K. Anpazhakan while deciding a batch of appeals filed by Atul Automation Pvt. Ltd., Ace Office Solutions, Teqnozo Ceramics Pvt. Ltd. and Mech and Tech against provisional release orders passed by the Principal Commissioner of Customs (Port), Kolkata.
The appellants had imported consignments of used Highly Specialised Equipment (HSE), namely digital multifunction print and copying machines, and filed Bills of Entry for their clearance. Upon examination by Customs officers in the presence of a government-approved Chartered Engineer, the goods were found to be old and used as declared, with the description, make, model and quantity tallying with the declarations. Subsequently, the consignments were seized under Section 110 of the Customs Act, 1962 on the ground that the goods were restricted items liable for confiscation.
As the adjudication proceedings were expected to take time and to avoid demurrage, the importers requested provisional release of the seized goods against execution of provisional duty bonds and furnishing of bank guarantees. While Customs authorities allowed provisional release of a substantial part of the consignments, they withheld 63 machines on the ground that the model-wise import limit of 100 units per calendar year under the Electronics and Information Technology Goods (Requirement of Compulsory Registration) Order, 2021 had allegedly been exceeded.
The importers contended that they had already furnished provisional duty bonds and bank guarantees taking into account the assessable value of the entire consignments and that there was no justification to withhold part of the goods thereafter. They further argued that there was no centralized mechanism to monitor model-wise import limits across India and that different Customs ports were following different practices, leading to discrimination. Reliance was also placed on earlier orders of the Calcutta High Court, which had directed provisional release of similar goods against bond and bank guarantee, and which were later affirmed by the Supreme Court.
After examining the records, the Tribunal noted that the goods were admittedly restricted items. However, it observed that despite repeated directions from the Ministry of Electronics and Information Technology over the years, Customs authorities had failed to evolve a centralized system for monitoring model-wise import limits of HSEs. As a result, different practices were being followed at different ports, with the restriction being enforced at Kolkata while similar imports were being released at other ports.
The Tribunal took note of earlier cases where used HSEs had been provisionally released pursuant to orders of the Calcutta High Court, which were affirmed by the Supreme Court, without imposing any quantity-based restriction. It observed that in the present case, the appellants had already executed provisional duty bonds and furnished bank guarantees by taking into account the assessable value of the whole consignment, not merely the portion ordered to be released.
The Bench observed, “Undisputedly, the appellants have already furnished ‘Provisional Duty Bond’ and ‘Bank Guarantee’, by taking into account the assessable value of the whole consignment, not only of the goods ordered to be released. As the appellants have already executed the Bond and Bank Guarantee as required for the whole consignment, we do not find any valid reason for not releasing the 63 pieces of HSEs in question.”
Holding that selective detention of part of the consignment after acceptance of bond and bank guarantee for the entire consignment was arbitrary, whimsical and discriminatory, the Tribunal directed provisional release of all 63 detained machines. The release was ordered to be subject to the same conditions as laid down by the Calcutta High Court in similar matters, which had been affirmed by the Supreme Court.
Accordingly, the CESTAT allowed the appeals and directed immediate provisional release of the 63 withheld machines against execution of provisional duty bond and bank guarantee, and disposed of the appeals on those terms.
Appearance
For Appellant: Advocate Srikant Kumar Mohapatra Along with Advocates Arijit Goswami,
For Respondent: Advocate Subrata Debnath, Authorized Representative
Cause Title: Atul Automation Private Limited Vs. Principal Commissioner of Customs (Port)
Case No: Customs Appeal No. 76064 of 2025 Final Order Nos. 77912-77915/2025
Coram: Judicial Member Ashok Jindal, Technical Member K. Anpazhakan
