Goutam Roy vs. Union Of INDIA And 2 Ors

Held

The Court held that the verification initiated by the respondents prima facie fell under Rule 6(1)(C) of the CAROTAR, 2020 (random verification), and not Rule 6(1)(b) as the respondents' reply did not conform to the structure of verification based on failure to provide requisite information. The Court found that the respondents had evaded a specific reply to the petitioner's allegation of goods being held up without reason, merely stating that preferential treatment was denied until doubts on the Certificate of Origin were resolved. The Court reasoned that the respondents' communication did not align with verification under Rule 6(1)(b) as no information was requested from the petitioner. Therefore, Rule 5(b) of CBEC's circular No. 38/2016-customs dated 22.08.2016 was deemed applicable. The Court directed the respondents to release the imported goods upon the petitioner furnishing an indemnity bond to deposit the difference between the assessed duty and the preferential duty paid. The Court clarified that if the assessed duty is not deposited within seven days of assessment, it would carry interest at 15% per annum from 26.09.2020. The goods were to be released within twenty-four hours of filing the indemnity bond. The petitioner was granted liberty to question the assessment decision as per law.

Facts

The petitioner, Shri Goutam Roy, an importer and exporter, imported soybean oil (55,200 kg) from Bangladesh on 26.12.2020 through the Agartala Land Customs Station. He submitted all requisite documents and paid IGST amounting to Rs. 2,34,191/-. However, the imported goods were warehoused without assessment of duty under Section 17 of the Customs Act, 1962, and without any reason being provided. The petitioner questioned the action as impermissible under Sections 17 and 18 of the Customs Act, 1962, and sought release of the goods, arguing they were perishable and held up indefinitely. The respondents stated that preferential treatment of customs duty was denied until doubts on the Certificate of Origin were resolved.

Key Issues

1. Whether the verification initiated by the respondents regarding the Certificate of Origin falls under Rule 6(1)(c) of the CAROTAR, 2020 (random verification) or Rule 6(1)(b) of the CAROTAR, 2020 (verification based on failure to provide information). Petitioner's arguments: The petitioner contended that the verification was random and covered by Rule 6(1)(c) of CAROTAR, 2020, and paragraph 5(b) of CBEC's circular No. 38/2016-Customs. He argued that no bank guarantee should be required in cases of random verification, citing CBEC circulars No. 38/2016 and No. 42/2020, and CBIC instruction No. 20/2020. The petitioner also relied on a previous High Court judgment in Pijush Banik versus Union of India and Others. He asserted that the respondents failed to provide specific reasons for non-clearance and evaded specific replies to allegations of goods being held up without reason. Respondent's arguments: The respondents argued that the cost break-up submitted by the petitioner was outdated and inconsistent regarding packaging material. They stated that the origin criterion declared by the petitioner made him ineligible for Special Treatment to Least Developed Countries under Rule 10 of the Rules of Determination of Origin of Goods under SAFTA. They communicated the reasons for non-clearance in accordance with Rule 6(1)(b) of CAROTAR, 2020, and informed the petitioner about the verification proceedings and his option for provisional assessment under Rule 6(4)(c) of CAROTAR, 2020, subject to furnishing security.