2014 (1) TMI 122 - HC - Customs

Duty demand - Confiscation of goods - Notification 85/2013 - Held that - So long as the said tariff value fixed by the Revenue is not under challenge, the respondent/importer insisting to pay duty on the transaction value does not arise. It is, however, open to the respondent/importer to challenge the assessment proceedings, if aggrieved in accordance with law. If the respondent/importer prays for a speaking order, the authority shall issue a speaking order so as to enable the respondent/importer to work out his remedy as per law - no justification to allow the respondent/importer to pay balance 25 % by way of bond when the duty is payable on the tariff value fixed. Further, the Notification 85/2013, it is stated that this may not apply to the earlier import of which we do not want to comment at this stage. Taking note of the plea of the respondent/importer that several orders have been passed by this Court for the release of the goods on payment of substantial duty together with bond and taking note of the vagaries of nature that is likely to cause severe hardship to the import of Betel Nuts, we are inclined to allow the appeals and modify the orders of the learned single Judge to safeguard the interest of revenue as well. Orders are modified to the extent that 75% of the duty demanded on assessment shall be paid and for the balance 25%, duty demanded by way of bank guarantee. The goods shall be released on compliance of the above, immediately. Since the assessment has already been made, if there is a request made by the respondent/importer for passing a speaking order, the authority shall pass a speaking order - Decided partly in favour of Revenue.

Summary

Issues:
1. Appeal against conditional release of goods.
2. Dispute regarding valuation of goods under Customs Act.
3. Applicability of tariff values fixed by Customs Department.
4. Challenge to assessment proceedings and release of goods.
5. Modification of orders to safeguard revenue's interest.

Analysis:
1. The appeal was filed against the conditional release of goods, Betel Nuts, as directed by the learned single Judge. The conditions included payment of admitted customs duty, depositing 75% of the differential duty, and executing a bond for the remaining 25% before the goods could be released. The Revenue was aggrieved by these conditions imposed by the Judge.

2. The dispute revolved around the valuation of goods under the Customs Act. The appellants argued that the bill of entry had been assessed based on tariff value, while the respondent/importer claimed the valuation should be based on the transaction value. Section 14 of the Customs Act stipulates that the value of imported goods shall be the transaction value unless tariff values are fixed by the Board through notification.

3. The Customs Department demanded duty based on the tariff values fixed by notification No.85/2013, dated 21.08.2013. The respondent/importer objected to this, insisting on paying duty based on the transaction value. However, the Court held that as long as the tariff values fixed by the Revenue were not challenged, the respondent/importer could not insist on paying duty based on transaction value.

4. The Court emphasized that the respondent/importer could challenge the assessment proceedings if aggrieved, but for the release of goods, duty had to be paid based on the tariff value. The Court modified the orders of the single Judge to ensure the interest of revenue was safeguarded. The direction to issue a show cause notice for adjudication was set aside at that point.

5. Ultimately, the Court allowed the appeals, modifying the orders to require payment of 75% of the duty demanded on assessment and the remaining 25% through a bank guarantee. The goods were to be released upon compliance, and the respondent/importer could pursue further remedies in accordance with the law. If the assessment order was not challenged or set aside, the Department could invoke the bank guarantee. No costs were awarded, and connected petitions were closed.