2007 (5) TMI 37 - HC - Customs

Provisional Assessment Petitioner contended that the respondents do not have jurisdictional to determine the tariff entry for the purpose of levy of duty on the basis of test report Held that petitioner contention is not correct and allowed liberty to take delivery by furnishing BG and PD bonds

Summary

Issues:
1. Delay in release of imported consignments
2. Provisional assessment under Customs Act, 1962
3. Discrepancy in tariff entry classification
4. Jurisdiction of proper officer in provisional assessment

Analysis:
1. The petitioner sought a writ of mandamus for the release of imported consignments of Fabrics, "Polyester Fabric Bonded," detained at ICD, Gariharsaru, Gurgaon. Despite submitting bills of entry in December 2006, the goods were not cleared promptly, causing business losses and demurrages. The petitioner requested provisional assessment under Section 18 of the Customs Act, 1962.

2. The respondents stated that after examination and testing, the goods were found to be classified differently from the declared entry, leading to a significant variance in duty rates. A show cause notice was issued to the petitioner, who was accused of non-cooperation. The court, considering the delay and business impact, ordered provisional release of goods based on a specified value, with conditions for bank guarantee and PD bond.

3. A subsequent application by the revenue for clarification on the classification of goods was rejected. The petitioner argued that the respondents' classification under a different tariff entry resulted in higher financial obligations. The petitioner claimed mala fide actions and insisted that tariff entry changes could only occur at final assessment, not during provisional assessment.

4. The revenue contended that the provisional assessment was based on valid material and within the proper officer's discretion. They emphasized that provisional assessment allows for tariff entry adjustments pending final assessment, ensuring duty calculation accuracy. The court upheld the provisional assessment and directed the petitioner to comply with the financial requirements for goods' release.

5. The court rejected the petitioner's jurisdictional challenge, affirming the proper officer's authority in determining tariff entry for provisional assessment. The court declined to intervene in the disputed factual issues, leaving the petitioner to address loss claims through appropriate legal channels. The petition was disposed of with directions for goods release upon compliance with financial obligations.