2026-VIL-1884-CESTAT-AHM-CU
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CUSTOMS CESTAT Cases

Customs - Bank Guarantee condition in Provisional Release - Section 110A read with Section 110 of the Customs Act, 1962 - Appellant imported goods declared as Distillate Marine Oil, which were seized on the basis of a laboratory report stating that the sample is most akin to High Flash High Speed Diesel, an item restricted for import - The Respondent permitted provisional release subject to end use bond, bond for the full assessable value and Bank Guarantee for ten percent of the assessable value to cover fine, penalty and differential duty that may arise - Appellant challenged the Bank Guarantee condition - Whether the Bank Guarantee condition is sustainable - HELD - The Respondent himself recorded that the sample is not identical to High Flash High Speed Diesel for the limited purpose of provisional release, that deliberate mixing could not be ascertained, and that the sample matches fully with Distillate Marine Fuel and only partially with High Flash High Speed Diesel for the tested parameters. The second laboratory described the product only as diesel fraction and did not endorse the conclusion that it is most akin to High Flash High Speed Diesel - The Bank Guarantee was sought to cover a contingent liability, while the Appellant had already executed the bond and agreed to the end use conditions. Seeking Bank Guarantee in similar circumstances is against the directions of the jurisdictional High Court, which held that the test reports were not definitive and that cloud point cannot be the sole basis for seizure, and against the Tribunal's decision in a similar matter - The Bank Guarantee condition is set aside, the Bank Guarantee shall be returned on production of the end use certificates and a bond, and the appeal is allowed
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