M/s PFive Bullions Pvt. Ltd. vs Union of India — Customs and Excise | Bombay HC (2025)

M/s PFive Bullions Pvt. Ltd. vs Union of India — Customs and Excise | Bombay HC (2025)

What the court decided

AI extract

Outcome

Petition disposed of with directions: provisional release of the Petitioner's goods under Bill of Entries Nos. 7974563 dated 21 January 2025 and 8268069 dated 10 February 2025 within seven days on furnishing a bank guarantee of Rs. 50 lakhs from a Nationalised Bank; liberty to respond to the show cause notice dated 21 June 2025 raising all permissible contentions (show cause notice to be disposed of within eight weeks of the response); liberty to apply to the Respondents for waiver of demurrage charges.

Issue for consideration

Whether the Petitioner's goods held under Bill of Entries Nos. 7974563 dated 21 January 2025 and 8268069 dated 10 February 2025 should be provisionally released, and on what security/conditions. +2 more

Court's answer

In the interest of justice and balancing the interests of the Petitioner and the Revenue, the Court directed provisional release of the Petitioner's goods held under Bill of Entries Nos. 7974563 dated 21 January 2025 and 8268069 dated 10 February 2025, within seven days of the Petitioner furnishing a bank guarantee from a Nationalised Bank in the amount of Rs. 50 lakhs.

Ratio / Principle

The Petition was disposed of by giving the Petitioners liberty to respond to the show cause notice and raise all permissible contentions, including the contentions raised in the Petition.

Key takeaways

The controversy whether the Petitioner's case falls under Sr. No. 5(b) of Circular No. 38/2016 or other sub-clauses of Sr. No. 5 would involve adjudication into factual issues and was not decided by the Court, especially as a show cause notice had already been issued.obiter¶19
The bank guarantee amount was fixed at Rs. 50 lakhs having regard to learned counsel for the Petitioner's submission that the goods were valued at approximately Rs. 8.69 crores and that duty payable, if Indo-ASEAN Treaty provisions were not applied, would correspond to 6% of the value, i.e., in the range of Rs. 50 lakhs or more.obiter¶21

Detailed headnote1 paragraphs

Bombay High Court (Ordinary Original Civil Jurisdiction), Coram M.S. Sonak & Jitendra Jain, JJ., disposed of Writ Petition No. 1764 of 2025 filed by M/s. PFIVE Bullions Pvt. Ltd. against Union of India & Ors. By then, the Respondents had issued a show cause notice dated 21 June 2025 under Section 124 of the Customs Act, 1962. Balancing the interests of the Petitioner and the Revenue, the Court directed provisional release of the Petitioner's goods held under Bill of Entries Nos. 7974563 dated 21 January 2025 and 8268069 dated 10 February 2025, within seven days on furnishing a bank guarantee of Rs. 50 lakhs from a Nationalised Bank; the quantum was fixed having regard to counsel's submissions placing the goods value at approximately Rs. 8.69 crores and the duty (absent Indo-ASEAN Treaty benefits) at about Rs. 50 lakhs or more. The controversy whether the case fell under Sr. No. 5(b) of paragraph 3 of C.B.E. & C. Circular No. 38/2016 dated 22 August 2016, or another sub-clause of Sr. No. 5, was left open as involving factual adjudication. All contentions were left open for the show cause notice, which is to be disposed of within eight weeks of the Petitioner's response; the Petitioners remain free to apply for waiver of demurrage charges.

22-WP-1764-2025.DOCX

Chaitanya

CHAITANYA ASHOK JADHAV

Digitally signed by CHAITANYA ASHOK JADHAV Date: 2025.06.25 10:42:10 +0530

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

WRIT PETITION NO. 1764 OF 2025

M/s. PFIVE Bullions Pvt. Ltd. … Petitioner Versus Union Of India And Ors. … Respondents

Mr Prashant Mishra a/w Adv. Chahat Modi, Mr Bharat Jadhav, Adv Purla Birla, Ms Asmita Pandey i/b Enact Legal, for Petitioner.

Mr Subir Kumar a/w Mr Harshad Shingnapurkar, Adv Soutrik Kar, for Respondent.

CORAM : M.S. Sonak &

Jitendra Jain, JJ.

DATED : 23 JUNE 2025

PC:-

Heard learned counsel for the parties. The learned counsel for the Respondents tenders his reply in the Court. The same is taken on record.

After this Petition was instituted, the Respondents have issued a show cause notice dated 21 June 2025, under Section 124 of the Customs Act, 1962.

Accordingly, we propose to dispose of this Petition by giving liberty to Petitioners to respond to the show cause notice and raise all permissible contentions, including the contentions raised in this Petition.

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22-WP-1764-2025.DOCX

Learned counsel for the Petitioner, however, submitted that we should issue certain directions for the provisional release of the goods. Prayer clause (b) of the Petition refers to provisional release of the goods in terms of Sr. No. 5(b) of paragraph 3 in C.B.E. & C.’s Circular No. 38/2016, dated 22 August 2016. There is a controversy whether Sr. No. 5(b) of the Circular will apply in the facts of the present case. The Circular, otherwise, requires securing the duty demand to the extent of 100% by providing a bank guarantee or cash deposit as convenient to the importer. The controversy as to whether the case of the Petitioner falls under Sr. No. 5(b) or whether, it is governed by other sub-clauses of Sr. No. 5, would involve adjudication into factual issues. As it stands, a show cause notice is already issued to the Petitioner.

Therefore, in the interest of justice and by balancing the interest of the Petitioner as well as the Revenue, we direct the provisional release of the Petitioner’s goods held under Bill of Entries Nos. 7974563 dated 21 January 2025 and 8268069 dated 10 February 2025, within seven days of the Petitioner furnishing a bank guarantee from a Nationalised Bank, in the amount of Rs. 50 lakhs.

We have determined the bank guarantee amount at Rs. 50 lakhs, because the learned counsel for the Petitioner submitted that the value of the goods would be approximately Rs. 8.69 crores. He also submitted that if the treaty provisions under the Indo-ASEAN Treaty are not applied, then, the duty

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22-WP-1764-2025.DOCX

would correspondent to 6% of the value of the goods. Accordingly, the duty payable would be in the range of Rs. 50 lakhs or more.

All contentions of all parties are left open and should be taken into consideration while disposing of the show cause notice dated 21 June 2025.

The show cause notice shall also be disposed of within eight weeks from the date of the Petitioner filing its response.

Regarding the demurrage charges, it will be open to the Petitioners to apply to the Respondents for waiver. If such an application is made the same should be disposed of in accordance with law.

10. The Petition is accordingly disposed of.

(Jitendra Jain, J)

(M.S. Sonak, J)

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