2007 (12) TMI 330 - HC - Customs

Demand of differential duty - Import of PVC laminated flexible film gummed vinyl printable vinyl PVC foam board from some parties in China - Petitioner seeks the release of the goods covered by these bills of entry on a provisional assessment basis alleged that goods have been grossly under valued by the Petitioner and which are lying seized under superdarinama ought to be valued at US 1640/PMT whereas the Petitioner has declared their value between US 870/PMT to US 1000/PMT Held that - Respondent to provisionally clear the goods forming the subject matter of 12 bills of entry that have been mentioned in the petition upon the Petitioner depositing an amount equivalent to 20% of the difference in the provisional duty as sought to be assessed by the Respondent and on the basis of the value prima facie determined by the Respondent that is US 1640/PMT and the value declared by the Petitioner that is between US 870/PMT and US 1000/PMT - Petitioner should not be permitted to dispute the identity of the goods once they are provisionally released in terms of order

Summary

Issues:
Imported goods valuation dispute, provisional assessment regulations compliance, release conditions validity.

Analysis:
The petitioner imported goods from China and faced valuation disputes with the Directorate of Revenue Intelligence (DRI). While some goods were cleared provisionally, others were subject to objections regarding their valuation. The petitioner sought release based on provisional assessment regulations.

The court examined the Customs (Provisional Duty Assessment) Regulations, 1963, which allow for provisional assessment when there is a valuation dispute. The regulations require a bond and a deposit not exceeding 20% of the differential duty. The court emphasized the need to follow these regulations when releasing goods provisionally.

The respondent imposed conditions for releasing the goods that exceeded the requirements of the regulations. The respondent demanded the entire differential duty, an indemnity bond, and a bank guarantee, contrary to the 20% deposit stipulated by the regulations. The petitioner challenged these conditions as excessive.

The respondent justified their actions based on Section 110A of the Customs Act, 1962, allowing for provisional release pending adjudication. However, the court found that provisional release and assessment are interconnected, and the principles of the regulations must be followed to safeguard revenue interests.

The court directed the respondent to provisionally clear the goods upon the petitioner depositing 20% of the differential duty. The petitioner would also need to execute a bond for the remaining duty. The respondent was instructed to issue a show cause notice before finalizing the assessment.

Regarding goods already provisionally assessed in Kolkatta, the court noted that the respondent did not demand anything additional. All clearances were made subject to final adjudication by the respondent. The court disposed of the writ petition, concluding the judgment.