Kolkata, 16.12.2025 : The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that Customs authorities acted arbitrarily in continuing to detain part of a consignment of used digital multifunction print and copying machines after the importers had already furnished provisional duty bonds and bank guarantees covering the full value of the consignments.
The decision was delivered by a Bench comprising Judicial Member Ashok Jindal and Technical Member K. Anpazhakan while deciding a batch of appeals filed by Atul Automation Pvt. Ltd., Ace Office Solutions, Teqnozo Ceramics Pvt. Ltd., and Mech and Tech. The appeals challenged provisional release orders issued by the Principal Commissioner of Customs (Port), Kolkata.
The appellants had imported used Highly Specialised Equipment (HSE), specifically digital multifunction printing and copying machines, and filed Bills of Entry for clearance. Customs officers examined the goods in the presence of a government-approved Chartered Engineer, who confirmed that the machines were old and used as declared, and that their description, make, model, and quantity matched the import documents. Despite this, the consignments were seized under Section 110 of the Customs Act, 1962 on the ground that the goods were restricted items liable for confiscation.
Since adjudication was likely to take time and to avoid demurrage, the importers sought provisional release of the seized goods by executing provisional duty bonds and furnishing bank guarantees. While Customs allowed provisional release of a large part of the consignments, it withheld 63 machines, citing an alleged breach of the model-wise import limit of 100 units per calendar year under the Electronics and Information Technology Goods (Requirement of Compulsory Registration) Order, 2021.
The importers argued that once bonds and bank guarantees had been accepted for the entire assessable value of the consignments, there was no justification for withholding a portion of the goods. They also pointed out that there was no centralised system in place to track model-wise import limits across ports, leading to inconsistent practices and discrimination. Reliance was placed on earlier orders of the Calcutta High Court, which had directed provisional release of similar goods against bond and bank guarantee, orders that were later affirmed by the Supreme Court of India.
After reviewing the record, the Tribunal acknowledged that the goods were restricted items but noted that Customs authorities had failed to implement a centralised monitoring mechanism for model-wise import limits, despite repeated directions from the Ministry of Electronics and Information Technology. As a result, restrictions were being enforced at some ports, including Kolkata, while similar consignments were being released at others.
The Bench observed that in the present case the appellants had already executed provisional duty bonds and furnished bank guarantees covering the assessable value of the entire consignments, not merely the portion initially ordered to be released. It found no valid reason to continue detaining the remaining 63 machines.
Holding that selective detention of part of a consignment after accepting security for the whole consignment was arbitrary, whimsical, and discriminatory, the Tribunal directed provisional release of all 63 withheld machines. The release was ordered subject to the same conditions laid down by the Calcutta High Court in earlier cases, which had been upheld by the Supreme Court.
Accordingly, CESTAT allowed the appeals and ordered immediate provisional release of the detained machines against the existing bonds and bank guarantees.
