2013 (9) TMI 859 - HC - Customs

Assessment of Provisional Duty - CIF value of Areca Nuts - Whether the provisional duty was to be assessed on the basis of the tariff value fixed in by the DGFT Notification dated 13th May, 2013 or on the basis of the Customs Notification dated 29th August, 2013 - Held that - Since an arguable case was made out which can be decided only upon exchange of affidavits, the Court, therefore, passes an interim order directing the customs authorities to make the provisional assessment in accordance with the provisions applicable therefor and upon payment of the duty by the petitioner, shall release the goods so imported by the petitioner. Since the show cause notice was based on the purported notification dated 13th May, 2013, the concerned authorities were permitted to proceed with the proceeding initiated on the basis of the said show cause notice, but shall not take any coercive measure against the petitioner without obtaining leave of the Court - authorities shall proceed on the basis of the show cause notice, but they were restrained from taking any coercive measures against the petitioner till the disposal of the writ petition.

Summary

Issues:
Challenge to notification revising CIF value, Arbitrariness of conditions, Violation of constitutional rights, Interpretation of Foreign Trade (Development & Regulation) Act, 1992, Customs Act, 1962 provisions on tariff value and duty assessment.

Analysis:
The petitioner contested a notification altering the CIF value issued under the Foreign Trade (Development & Regulation) Act, 1992, contending arbitrariness and infringement of constitutional rights. The respondents justified the policy under the Act, emphasizing adherence to duty imposition regulations. They argued that the bill of entry must comply with the CIF value circular to avoid classification as prohibited goods under the Customs Act, 1962. Section 46 of the Act mandates correct bill of entry submission for imports, with errors deemed as prohibited goods, justifying the show cause notice to the petitioner.

The petitioner highlighted a subsequent circular allowing provisional assessment based on the contentious notification, asserting its binding nature on customs officials for goods release. The respondents countered, citing a revised tariff value under the Customs Act, 1962, but acknowledged the option for provisional assessment and duty payment for the petitioner's imports. The core issue revolved around whether provisional duty should align with the initial or updated circular.

Sections 14, 15, and 18 of the Customs Act, 1962 outline the tariff value determination and duty application process comprehensively. Recognizing a debatable case requiring affidavit exchange, the Court issued an interim order directing provisional assessment compliance with applicable provisions for goods release post-duty payment. While permitting authorities to proceed with the show cause notice-based actions, coercive measures against the petitioner were restrained pending further court orders.

The Court mandated filing of affidavit-in-opposition and subsequent replies within specified timelines, scheduling the case for further proceedings post-vacation. Emphasizing adherence to the show cause notice, authorities were barred from coercive actions until the writ petition's resolution, ensuring due process and fair treatment during legal proceedings.