Imposition Of Conditions By Customs For Provisional Release Of Seized Goods 'Discretionary': Delhi HC Tunes Down 130% Bank Guarantee

In doing so, a division bench of Justices Prathiba M. Singh and Dharmesh Sharma scaled down the alleged onerous condition imposed on an importer, for executing a Bank Guarantee of 130% of the deferential duty.

It observed, “The calculated amount for the bank guarantee would be substantial and may almost constitute 70-80% of the value of the goods itself. The imposition of conditions being a discretionary matter, in the facts of this case, this Court is of the opinion that it would be just and fair that apart from the Bond which has been directed, the Bank Guarantee to the tune of 30% of the differential duty be furnished by the Petitioner.”

Petitioner imported self-drilling bars against four bills of Entry. The said goods were seized by the Customs Department on the ground that they were wrongly classified under Entry No. 82.07 instead of 73.04 HSN.

On Petitioner's application, the Principal Commissioner ordered provisional release of seized goods however, subject to furnishing of UT Bond equal to assessable value and Bank Guarantee of 130% of the deferential duty.

The Petitioner challenged the above conditions as being “onerous”. It was further submitted that the issue of classification had to be finally decided by the Customs Department, however, for the last nine months, the goods had been lying with the Department, resulting in financial losses to the Petitioner.

The Department on the other hand challenged the maintainability of the writ petition. Reliance was placed on Hind Global Enterprises vs. The Commissioner of Customs & Anr. whereby the High Court had held that mere onerous conditions would not permit the Petitioners to bypass the appellate remedy available under the Customs Act, 1962.

The Court agreed that usually in such cases parties ought to avail of the appellate remedy and not rush to the High Court by invoking its extraordinary writ jurisdiction.

However, noting the factual matrix of the case, it said Petitioner cannot be relegated to the appellate remedy since its goods have been lying with the Department since May 2024 and even the writ petition had been pending for six months.

Accordingly, terming the impugned quantum of bank guarantee as “substantial”, the Court directed the Petitioner to furnish Bank guarantee of 30%.

Appearance: Mr. Prabhat Kumar and Mr. Karan Kanwal, Advs. for Petitioner; Mr. Harpreet Singh, Sr. SC with Ms. Suhani Mathur and Mr. Jay Ahuja, Advs. for Respondent

Case title: Rocktek Infra Services Pvt. Ltd. v. Principal Commissioner Of Customs (Import)

Citation: 2025 LiveLaw (Del) 155

Case no.: W.P.(C) 12489/2024

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