The court's decision established the legal principle that provisional release of seized goods can be ordered with specific conditions under the Customs Act, while allowing the investigation and adjudication proceedings to continue.

1. Heard Mr. B.Kumar, learned Senior Counsel for Mr. B.Satish Sundar, learned counsel appearing for the petitioners and Mr. S.Xavier Felix, learned Senior Central Government Standing Counsel for the respondents.

2. These writ petitions have been filed, seeking to quash the proceedings in File Nos.S.Misc.144/2013-SIIB, S.Misc.108/2013-SIIB, S.Misc.128/2013-SIIB dated 26.08.2013, issued by the 3rd respondent with a consequential direction to the respondents to release the imported goods (live goods covered under Bill of Entry Nos.2045972 dated 06.05.2013, 2014153 dated 02.05.2013 and already cleared goods on payment of appropriate duty as reassessed by the proper officer in terms of Section 17(4) of the Custom Act 1962) viz. Multi Media Speakers for Computers of varying models more particularly by lifting the Restraint Orders dated 07.05.2013 from the premises of the petitioner entity.

3. For the sake of brevity, facts are being taken from W.P.No.25862 of 2013, as common question of law and facts are involved in all these writ petitions.

4. The case of the petitioner in a nut-shell is as follows:-

"(a) The petitioner-entity is a trader in electronics and computer / IT goods and procures goods both locally and from abroad on wholesale basis. The petitioner for the purpose of conducting the said business is favoured with an Import-Export Code No.0405010532 issued by the office of the Zonal Joint Director General of Foreign Trade, Chennai and is duly registered with the Commercial Taxes Department of the State Government. The petitioner entity is also assessed to VAT with TIN No.33400582017, that registered with Central Sales Tax in C.S.T.No.789549 / 01.08.2003 and that also assessed to Income Tax with PAN No.AADCS9919C by the said department;

(b) The petitioner, which is in the business for more than 9 years, in the course of its business, had imported consignments of “Multi Media Speakers for Computers” from M/s. Kaybee International Ltd., Hong Kong and had filed Bills of Entry with the office of the respondent for the clearance of the same. Along with the Bills of Entry, relevant Commercial Invoice, Packing List, Bill of Lading, Product Literature etc., were also filed. After due examination and assessment to duty by the proper officer of Customs, the goods were released on collection of duty on enhanced values. The said authorities had issued “Out of Charge” order permitting clearance of goods in terms of Section 47 of the Customs Act, 1962. Pursuant to clearance of goods from the Customs fold, the same was kept at the petitioner's premises at No.24, Sunkuwar Agraharam Street, Chintadripet, Chennai, for local sales;

(c) The petitioner, on the basis of its contract entered into with the foreign suppliers, received a consignment of imported goods in May, 2013 and had filed Bill of Entry No.2045972 dated 06.05.2013 for assessment and clearance of goods viz., Multi Media Speakers for computers. The said consignment has not been cleared so far and the goods covered under the same are in the custody and control of the respondents;

(d) Acting on certain intelligence, the officers attached to the 3rd respondent commenced investigation into the imports of the petitioner entity on the allegation of mis-classification and mis-declaration. Pursuant to such investigation, the 4th respondent on the authorization of the 3rd respondent conducted search of the godown premises of the petitioner entity on 07.05.2013 and sealed the said premises along with stocked goods viz., “Multi Media Speakers for Computers” already cleared from customs, after drawing representative samples of three models at the premises. They drew a mahazar of even date and affixed customs seal on the godown on the reasonable belief that the stocked goods have been mis-classified. Further certain import documents, viz. Bills of entry, invoice, packing list, purchase order pertaining to the past imports were also seized under the said mahazar. This apart a Restraint O