CBIC Circular Cannot Override Provisional Release Of Seized Goods Under Customs Act: Allahabad High Court
The Allahabad High Court at Lucknow has held that Customs authorities cannot deny provisional release of seized goods merely because an executive instruction places such goods outside the scope of provisional release.
The bench of Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary held that CBIC Circular No. 35/2017-Cus. dated 16.08.2017 cannot dilute the scope of Section 110A of the Customs Act, 1962, by prohibiting provisional release of goods notified under Section 123 of the Act.
“CBIC Circular cannot have overriding effect, so as to dilute Section 110-A of the Act. Any such dilution by way of Circular is impermissible in law, as the Subordinate Legislation cannot supplant the main Legislation.”
Officers of the Directorate of Revenue Intelligence, Lucknow Zonal Unit intercepted a car in August, 2024 and recovered gold pieces and gold jewellery, which were seized by the Customs authorities.
The respondent's application under Section 110A for provisional release was rejected, and his appeal before the Commissioner (Appeals) was dismissed. On further appeal, the CESTAT directed provisional release of the gold subject to conditions.
In the meantime, the Adjudicating Officer had ordered confiscation of the goods, but the order was set aside by the Commissioner (Appeals) and the matter was remanded.
The Revenue challenged the CESTAT order under Section 130 of the Customs Act, questioning whether release could be ordered after adjudication and despite non-disclosure of the adjudication proceedings to the Tribunal. It was argued that the Circular specifically prohibited release of goods notified under Section 123.
The Court noted that the confiscation order already stood set aside when the Tribunal passed its order, and held that the questions on adjudication and non-disclosure were of no relevance.
On the Circular, the Court relied on the Delhi High Court's decision in Additional Director General (Adjudication) v. Its My Name Pvt. Ltd., wherein para 2 of the Circular was held to be void and unenforceable for being contrary to Section 110A, as the CBEC could not by executive instruction impose limits on provisional release which the statute does not contain. The Court observed that the SLP against that judgment was disposed of by the Supreme Court by allowing provisional release with enhancement of the bank guarantee amount.
Answering the question in favour of the respondent, the Court dismissed the appeal.
For Appellant: Advocate Dheeraj Srivastava
For Respondent: Advocate Vineet Kumar Singh, Jameel Ahmad