ESSAR INVESTMENTS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioners have sought to challenge an order for provisional release dated October 11, 2012 as amended on November 9, 2012 and an order of the Additional Commissioner of Customs (Preventive), dated March 4, 2013 declining to accept the request for the substitution of a corporate guarantee in lieu of a bank guarantee. The petitioners filed five bills of entry, all dated July 9, 2012 for the importation of two sets of video conferencing suites and accessories; two sets of RPX 408M series and three sets of RPX 418M series. Five consignments were originally sent by Polycom Inc. U.S.A., the exporter, to Beetel Teletech Ltd., the importer. There was a first stage high seas sale by Beetel Teletech Ltd. to AGC Networks Limited under four agreements dated March 30, 2012 and March 31, 2012 at a value of Rs. 76.67 lakhs and Rs. 85.10 lakhs. AGC Networks Limited, in turn, sold the goods on high seas sale to the petitioners at a value of Rs. 1.29 crores for RPX 408M series and Rs. 1.45 crores for RPX 418M series under agreements dated March 30 and 31, 2012, respectively. On the basis of self assessment, the assessable value was declared at Rs. 1.31 crores for RPX 408M series and Rs. 1.47 crores for RPX 418M series. The petitioners paid customs duty of Rs. 1.18 crores together with interest on delayed payment. The consignments were detained on September 27, 2012 on specific intelligence indicating that there was an evasion of customs duty. The case of the Department is that the manufacturers' suggested retail price for RPX 408M series was US $ 599,999 and for RPX 418M series, it was US $ 665,999. Moreover, according to the Revenue, Polycom Inc., had classified the export products under their respective sub -headings and a part of the consignment value was not eligible for the benefit of Notification No. 24/2004. The five consignments were seized under a panchanama dated October 3, 2012 on the reasonable belief that the goods were liable to confiscation under section 111(m) of the Customs Act, 1962. The petitioners have relied upon a letter dated September 21, 2012 of Polycom Asia Pacific Pvt. Ltd. stating that a discount of 73.5 per cent. was offered.

(2.) ON October 5, 2012, the petitioners applied for provisional release of the seized goods. On October 11, 2012, the Commissioner of Customs (Preventive) granted provisional release subject to the following conditions which were referred to in the letter:

(3.) DURING the course of the hearing, the counsel appearing on behalf of the Revenue has placed on record, a statement containing the manner in which the provisional duty has been computed. As noted earlier, since the petitioners have paid duty in the amount of Rs. 1.18 crores, the order for provisional release requires the petitioners to pay the balance of Rs. 3.33 crores besides furnishing a bond and bank guarantee representing ten per cent. of the value of the goods.