2017 (10) TMI 987 - HC - Customs

Provisional assessment of goods - furnishing of Bond and Bank Guarantee - Held that - Mere pendency of an appeal before the Appellate forum will not amount to stay of the order passed by the lower forum/authority. In the instant case, the valuation of the identical goods passed by the Commissioner of Customs (Appeals) is binding on the third respondent - the third respondent cannot mechanically insist upon the production of bond and Bank guarantee without referring to the earlier decision passed by the Commissioner of Customs (Appeals), which is in favor of the petitioner - petition allowed.

Summary

Issues:
1. Provisional assessment of imported goods requiring bond and Bank guarantee.
2. Justification for demanding bond and Bank guarantee.
3. Binding effect of earlier decisions on current assessment.

Issue 1: Provisional assessment of imported goods requiring bond and Bank guarantee.
The petitioner, an importer of textile fabrics, imported a consignment from China and was directed by the third respondent to furnish bond and Bank guarantee for provisional assessment of the goods. The petitioner challenged this requirement in the High Court.

Issue 2: Justification for demanding bond and Bank guarantee.
The High Court analyzed the facts and circumstances of the case, noting the history of previous imports by the petitioner. It highlighted that the petitioner had successfully contested valuation issues in the past, with the Commissioner of Customs (Appeals) accepting the declared value of similar goods in an earlier order. The Court referenced the principle that orders of higher appellate authorities are binding on lower authorities within their jurisdiction, as emphasized in a Supreme Court decision.

Issue 3: Binding effect of earlier decisions on current assessment.
The judgment emphasized that the third respondent cannot mechanically insist on bond and Bank guarantee without considering the previous decision by the Commissioner of Customs (Appeals) in favor of the petitioner. The Court allowed the writ petition, quashed the impugned order, and directed the respondent to provisionally assess the goods without insisting on bond and Bank guarantee, taking into account the earlier decision. The respondent was instructed to release the goods on provisional assessment within three weeks.

Overall, the judgment focused on the legal principle that decisions of higher appellate authorities are binding on lower authorities, emphasizing the importance of following such decisions to avoid undue harassment to parties involved. The Court's decision in this case was based on the established precedent and the specific circumstances of the petitioner's imports and past valuation disputes.