Case Note & Summary
The present intra-court appeal under Clause 15 of the Letters Patent was filed by the Commissioner of Customs (Imports) and other competent authorities of the Customs Department, challenging an interim order dated 26.12.2025 made in W.M.P.No.56394 of 2025 in W.P.No.50387 of 2025, as modified by a later order dated 07.01.2026. The respondent, M/s.Balaji Trading Company, a proprietary concern engaged in the import and local sale of food products including areca nuts, imported a consignment described as split betel nuts (areca nuts) from Bangladesh and filed Bill of Entry No.6230018 dated 11.12.2025, claiming classification under CTH08028090 and exemption from Basic Customs Duty under Notification No.99/2011-Cus dated 09.11.2011, on the strength of a SAFTA Certificate of Origin issued by the competent authority in Bangladesh. At the time of assessment, the Customs authorities, in exercise of their statutory powers under Section 17 of the Customs Act, 1962, provisionally assessed the Bill of Entry, citing the need for verification of the Certificate of Origin under the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR, 2020). Under Rule 6(1)(b) of CAROTAR, 2020, the respondent was required to furnish a bond and bank guarantee to safeguard the revenue pending verification. The respondent filed a writ petition seeking release of the goods without insisting on a bank guarantee, and the learned Single Judge passed an interim order directing release on furnishing a bond without bank guarantee, which was later modified. The appellants contended that the interim order was contrary to the statutory scheme and that the requirement of bank guarantee is a mandatory safeguard to protect revenue. The respondent argued that the goods were perishable and that the bank guarantee would cause financial hardship. The Division Bench held that the balance of convenience lies in protecting the revenue interest by insisting on a bank guarantee, as the goods are not perishable and the respondent can seek release by complying with statutory requirements. The court allowed the appeal, set aside the impugned interim order, and directed the respondent to comply with the requirements under Rule 6(1)(b) of CAROTAR, 2020, including furnishing a bond and bank guarantee, for release of the consignment.
Headnote
A) Customs Law - Provisional Assessment - Section 17 of Customs Act, 1962 read with Rule 6(1)(b) of CAROTAR, 2020 - Requirement of Bond and Bank Guarantee - The Customs authorities provisionally assessed the Bill of Entry for verification of the Certificate of Origin under SAFTA. The respondent importer sought release of goods without furnishing a bank guarantee. The Single Judge directed release on furnishing a bond without bank guarantee. Held that under Rule 6(1)(b) of CAROTAR, 2020, the proper officer may allow clearance on execution of a bond with bank guarantee or security. The requirement of bank guarantee is a statutory safeguard to protect revenue pending verification. The Single Judge's order directing release without bank guarantee was set aside. (Paras 1-8) B) Customs Law - Interim Relief - Balance of Convenience - The respondent imported areca nuts from Bangladesh claiming exemption under Notification No.99/2011-Cus dated 09.11.2011 based on a SAFTA Certificate of Origin. The Customs authorities sought verification of the certificate. The respondent argued that the goods were perishable and that the bank guarantee would cause financial hardship. Held that the balance of convenience lies in protecting the revenue interest by insisting on a bank guarantee, as the goods are not perishable and the respondent can seek release by complying with statutory requirements. (Paras 4-8) C) Customs Law - Scope of Interim Orders - The Single Judge's interim order dated 26.12.2025 directed release of goods on furnishing a bond without bank guarantee, which was modified on 07.01.2026. The Division Bench found that the order effectively bypassed the statutory scheme under CAROTAR, 2020. Held that interim orders must not frustrate statutory provisions and must balance the interests of both parties. The appeal was allowed, and the impugned order was set aside. (Paras 5-8)
Issue of Consideration
Whether the learned Single Judge was justified in directing the release of the imported consignment of areca nuts without insisting on a bank guarantee, pending verification of the SAFTA Certificate of Origin, in light of the statutory requirements under Section 17 of the Customs Act, 1962 and Rule 6(1)(b) of CAROTAR, 2020.
Final Decision
The appeal is allowed. The impugned interim order dated 26.12.2025 made in W.M.P.No.56394 of 2025 in W.P.No.50387 of 2025, as modified by order dated 07.01.2026, is set aside. The respondent is directed to comply with the requirements under Rule 6(1)(b) of CAROTAR, 2020, including furnishing a bond and bank guarantee, for release of the consignment. No costs. Consequently, connected miscellaneous petition is closed.
Law Points
- Provisional assessment under Section 17 of Customs Act
- 1962
- Rule 6(1)(b) of Customs (Administration of Rules of Origin under Trade Agreements) Rules
- 2020 (CAROTAR
- 2020)
- requirement of bond and bank guarantee for release of goods pending verification of Certificate of Origin
- scope of interim relief in customs matters
- balance of convenience and irreparable injury.
