Provisional release security must not include speculative penalties or fines before investigation establishes liability.

The appellant imported 36,000 kg of areca nut from Bangladesh and claimed the benefit of Notification No. 99/2011-Cus on the basis of a SAFTA Certificate of Origin.

Following a DRI alert and suspicion that the goods originated in Indonesia or Thailand and had been routed through Bangladesh, Customs seized the consignment.

The appellant sought provisional release under Section 110A of the Customs Act, 1962.

The Principal Commissioner required a bond of ₹3,77,38,872 and a bank guarantee of ₹9,05,73,295.

The appellant challenged those conditions, relying also on a previous consignment from the same exporter that had received SAFTA treatment after final assessment.

Whether the bond and bank-guarantee conditions imposed for provisional release of the seized consignment should be modified.

Whether the appellant was entitled to waiver of demurrage and other charges, and to fumigate the goods pending release.

Section 110A of the Customs Act, 1962 provides for provisional release of seized goods subject to conditions imposed by the competent authority.

The Tribunal treated a bond as security for the assessed value and potential duty liability, while considering it premature to secure possible penalty and fine before the investigation established the alleged origin and the authenticity of the Certificate of Origin.

Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009 provides that, subject to other applicable law, a Customs Cargo Service Provider shall not charge rent or demurrage on goods seized, detained or confiscated by the proper officer.

The Tribunal accepted that the tariff value made the assessable value ₹3,77,38,872 and considered a bond appropriate to protect the Revenue in respect of that value.

It found, however, that securing the possible penalty and fine through a substantial bank guarantee was premature because the investigation into the Certificate of Origin had not yet established the Revenue’s case.

The prior clearance of a consignment from the same exporter with SAFTA benefit after final assessment also supported reducing the guarantee, without determining the origin issue on its merits.

As the goods had been detained and were being provisionally released, the Tribunal applied Regulation 6(1)(l) to direct waiver of demurrage and other charges, and permitted fumigation under Customs supervision to prevent deterioration.

Upon meeting those conditions, the consignment was eligible for provisional release.

The Tribunal also directed waiver of demurrage and other charges and permitted the appellant to fumigate the goods at its own cost under Customs supervision.