Provisional-release security under Section 110A must be reasonable and proportionate to the case circumstances.

The petitioner, charterer of the barge *M.T. Bay III*, challenged the conditions imposed by the Additional Commissioner of Customs for its provisional release under Section 110A of the Customs Act, 1962.

Customs had seized the barge during an investigation into the alleged transfer of approximately 208 KL of VLSFO to *M.V. Angara*.

The impugned order required a bond of Rs.12 crore and a bank guarantee of Rs.6 crore. The petitioner claimed that the barge was worth approximately Rs.2.80–2.90 crore and that the security conditions were excessive.

*M.V. Angara* had been provisionally released against an e-bond of approximately Rs.16.12 crore and a bank guarantee of Rs.30 lakh; a demand draft of Rs.50 lakh had also been deposited towards fine or penalty in connection with the barge’s release.

Customs objected that the petitioner had an appellate remedy and relied on a valuation certificate stating that the barge was worth Rs.12 crore.

1. Whether the High Court should entertain the writ petition despite the asserted statutory appellate remedy against the provisional-release order.

2. Whether the Rs.6 crore bank-guarantee condition imposed for provisional release of the barge was excessive and unreasonable on the facts of the case.

Section 110A of the Customs Act, 1962 empowers the adjudicating authority to provisionally release seized goods on a bond and such security and conditions as it may require; the discretion must be exercised reasonably, on relevant materials, to safeguard revenue.

The Act prescribes no uniform security quantum: the amount depends on the circumstances, including the alleged offence, goods or cargo, value of the conveyance, revenue exposure, possible confiscation, fine or penalty, and the applicant’s role.

The court also considered the asserted appellate route under Sections 128 and 129A of the Act, but held that the conditions in this case warranted writ intervention.

Respondents relied on CBIC Circular No. 35/2017-Customs and *Commissioner of Customs (Import-I) v. S. S. Offshore Pvt. Ltd.*, 2018 (361) E.L.T. 51 (Bom), in support of their submissions on provisional release and appellate remedy.

Although the authority had discretion under Section 110A and the respondents pointed to a statutory appeal, the Court found the conditions imposed to be *ex facie* excessive and unreasonable, justifying consideration of the petition.

It compared the security required for *M.V. Angara*—the vessel in which the VLSFO had been provisionally released—with the Rs.6 crore bank guarantee demanded for the barge, and considered the petitioner’s valuation material alongside Customs’ Rs.12 crore valuation certificate.

Taking the circumstances together, the Court held that the security quantum should be reduced; the conditions imposed for release of *M.V. Angara* were a relevant factor, though not a uniform rule for determining security in every case.

The remaining conditions in the impugned order, including the bond condition, were left intact; there was no order as to costs.