2007 (2) TMI 37 - HC - Customs

Valuation (Customs) Alleged that the unit price declared by the appellant is very low when compared with the prevailing unit price Authority permitted petitioner to release the goods provisionally on execution of simple bond and bank guarantee at 120% of differential duty.

Summary

Issues:
1. Provisional release of Mulberry raw silk imported under Bill of Entry.
2. Dispute over the declared value of imported goods.
3. Conditions for provisional clearance set by the Customs authorities.
4. Compliance with statutory provisions under the Customs Act for provisional assessment.
5. Comparison of declared value with similar imports for provisional clearance.
6. Release of goods provisionally on execution of personal bond and bank guarantee.

Issue 1: Provisional Release of Imported Goods
The writ petition sought a mandamus to direct the respondents to permit the release of Mulberry raw silk imported under a specific Bill of Entry on a provisional assessment basis at the declared value of USD 13.40. The petitioner, a company importing raw silk, faced delays in clearance despite filing necessary documents and offering to furnish a personal bond due to discrepancies in the declared value compared to previous imports.

Issue 2: Dispute Over Declared Value
The Customs authorities raised concerns over the low declared unit price of the imported goods compared to prevailing market prices, initiating an investigation into the origin of the goods and the authenticity of the certificate provided. The petitioner argued that similar goods had been cleared at a higher value previously and contested the demand for a bank guarantee for the differential duty.

Issue 3: Conditions for Provisional Clearance
The respondents imposed conditions for provisional clearance, including a provisional duty of USD 28.00/kg, a PD bond backed by a bank guarantee, and an investigation into the origin of the goods. The petitioner objected to the high provisional duty and the demand for a 120% bank guarantee, advocating for a simpler provisional bond based on their history as a regular importer.

Issue 4: Compliance with Statutory Provisions
Section 18 of the Customs Act allows for provisional assessment of goods pending further tests or inquiries, provided the importer furnishes suitable security. The court emphasized the need for reasonable conditions for provisional clearance, considering past clearances of similar goods at a lower value.

Issue 5: Comparison with Similar Imports
The court noted that previous consignments of similar goods from Uzbekistan had been cleared at USD 14.50/kg, indicating inconsistency in the treatment of the petitioner's imports. The respondents' insistence on a higher provisional value without sufficient justification was deemed arbitrary and unreasonable.

Issue 6: Release on Personal Bond and Bank Guarantee
Ultimately, the court modified the conditions for provisional release, directing the release of goods upon the petitioner furnishing a bank guarantee for the differential value between declared and cleared values, along with a personal bond. The court highlighted the need for fair treatment based on past practices and directed the expeditious assessment of the bills of entry to recover due amounts.

The judgment resolved the issues by ensuring compliance with statutory provisions, addressing discrepancies in treatment of imports, and providing a balanced approach to provisional clearance based on the specific circumstances of the case.