Telangana High Court
M/S Auto Campus, vs Union Of India, on 25 March, 2025
Author: P.Sam Koshy
Bench: P.Sam Koshy
THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE NARSING RAO NANDIKONDA
WRIT PETITION No.3813 OF 2025
ORDER:(per Hon'ble Sri Justice P.Sam Koshy) Heard Mr.A.V.A.Siva Kartikeya, learned counsel representing Mr.Srinarayan Toshniwal, learned counsel for the petitioner and Mr.Dominic Fernandes, learned Senior Standing Counsel for the Central Board of Indirect Taxes & Customs appearing for the respondent. Perused the material available on record.
2. The challenge in the present writ petition is to the order passed by the respondent authorities for asking the petitioner for bank guarantee of 25% of the differential duty for the provisional release of the goods.
3. Learned counsel for the petitioner infact had questioned the very decision of the authorities in so far as seizing the product and subjecting it to reassessment doubting the product whether it was in fact Roasted Areca Nuts as per CAAR order. The learned counsel for the petitioner submitted that when the goods were subjected to test at the Government Laboratory itself the moisture contents of the said good was found to be 2.54, based upon this learned counsel for the Page 2 of 5 petitioner banked on the fact that this moisture content only come when the goods are roasted and not otherwise.
4. Learned counsel for the petitioner also produced the test report that was undertaken at the place from where the good were exported to the petitioner; where again it was reflected to be Roasted Areca Nuts so also in the test report conducted at the laboratory of the Government of India. There is also an observation made by the chemical examiner that based on the parameter appearance of the sample it is roasted Areca Nuts and therefore the entire proceedings initiated by the respondent to be per se bad.
5. Learned counsel for the petitioner relied upon the decision of the Gujurat High Court as also a decision from the Madras High Court in this regard.
6. Per contra, the learned Standing Counsel appearing for the respondents opposing the petition submits that from the test report itself it reflects that they were certain doubts still remaining to be ascertained before reaching to the conclusion as to whether the Areca Nuts imported by the petitioner were infact Roasted or not.
7. Learned Standing Counsel referred to the note of the test report given by the examiner, wherein there was an observation that certain parameters which were required to be under taken could not be under taken because of the instrument break down at the laboratory, so also Page 3 of 5 it could not be ascertained by the examiner as to whether it is fit for human consumption or not. There was also doubt on the procedure of preparation of roasting if undertaken because of all these, the proceedings have been initiated by the respondent authorities and to ensure that before the good are provisionally released, the petitioners were directed to furnish a bank guarantee equivalent to 25% of the differential duty.
8. Perusal of the documents and pleadings in support of the writ petition, though from the lab report and also from the other contents it appears that the moisture content of the product imported by the petitioner seems to be 2.54, however, there is no strong, cogent materials available in the records to show that the product before being exported out of Indonesia had been subjected to the process of roasting. Except for the test report and the certificate issued by the authorities from the exporting country stating the goods being exported to the petitioner being Roasted Areca Nuts along with a write up that was given by the seller to the petitioner which only provides for the literature as to the process of roasting is concerned. However, whether the goods infact have been subjected to roasting or not and any document in this regard was no available either with petitioner nor it is attached to the pleadings to the writ petition. Page 4 of 5
9. In the given circumstances, if the authorities have asked for submission of a bank guarantee of 25% of the differential duty the same in the opinion of this Bench cannot be said to be arbitrary or illegal in any manner.
10. However, the learned counsel for the petitioner contended that the furnishing of 25% of the differential duty itself would be too harsh for the petitioner as his financial status does not permit him in providing this much of bank guarantee and the goods may not be worth the calculation done by the respondent authorities. Therefore prayed for an appropriate order relaxing the payment of 25% of differential duty by way of bank guarantee.
11. Given the fact that the petitioner pleads that his financial status does not permit him in providing the bank guarantee equivalent to 25% of the differential value in one go, we thought it proper that the said condition can be slightly modified to the extent of permitting the petitioner in getting the goods seized released provisionally in two installments. We therefore feel that it would be proper at this juncture to permit the petitioner to pay the 50% of the 25% of the differential duty i.e., 12.5% by way of either a bank guarantee or a fixed deposit to the respondent authorities and on furnishing the same, the authorities are directed to porvisionally release 50% of the goods seized. That so far as the balance of 50% i.e., remaining 12.5 % of the Page 5 of 5 25% differential duty that the petitioner would be required to furnish either by way of a bank guarantee or a fixed deposit or a secured property which is not charged or mortgaged with any bank or financial institution nor should the said property be in any sort of a dispute and must have clear title, rights of the petitioner over the same and subject to fulfilling the other conditions in respect of the said property to the satisfaction of the officers of the respondent No.2. That upon furnishing the same, the balance 50% goods can also be released to the petitioner.
12. With the aforesaid direction the present writ petition in its form stands disposed of. No order as to costs.
As a sequel, miscellaneous applications pending if any, shall stand closed.
__________________ P.SAM KOSHY, J _________________________________ NARSING RAO NANDIKONDA, J Date: 25.03.2025 AQS