2021 (4) TMI 1229 - HC - Customs

Verification of the Country of Origin Certificate - whether the process of verification is random in nature or it is a verification which falls under Rule 6(1)(b) of the CAROTAR, 2020? - HELD THAT - Even though the petitioner has brought allegation against the respondents by stating that he has met all the requirements for getting the clearance, but it has been found by the customs that he has made some inaccurate statement in respect of minimum value addition in Bangladesh. That apart, some components contributing to the price could not be figured out. Thus, the verification on deficiency is prima facie justified. Within a short while, the reason for ware-housing had been disclosed to the petitioner. The petitioner was apprised of his right of exercising option for the provisional assessment of the duty subject to the final decision. The petitioner therefore might get the imported goods released on furnishing the Bank Guarantee (BG) for an amount of ₹ 12,74,031/-, but the petitioner has not done so in terms of the communication dated 17.10.2020 Annexure-E to the reply . In the facts and circumstances as surfaced, this court is not inclined to interfere in the manner as asked for - The petitioner may take release of the imported goods covered by Bill of Entry No.659, 629/IMP/AGT-LCS/2020-2021 dated 29.09.2020 without prejudice to his claim - Petition dismissed.

Summary

Issues Involved:
1. Non-assessment and clearance of imported goods under Section 17 of the Customs Act, 1962.
2. Verification of the Certificate of Origin under CAROTAR, 2020.
3. Requirement of bank guarantee for provisional assessment under Section 18 of the Customs Act, 1962.

Detailed Analysis:

1. Non-assessment and clearance of imported goods under Section 17 of the Customs Act, 1962:
The petitioner, a company importing Galvanized Steel Sheets from Bangladesh, claimed that the respondent customs authorities failed to assess and clear the goods under Section 17 of the Customs Act, 1962. Despite submitting all requisite documents, no reason was provided for the inaction. The petitioner argued that the goods should have been cleared either by accepting the concessional rate of duty under self-assessment or by reassessment under Section 17.

2. Verification of the Certificate of Origin under CAROTAR, 2020:
The petitioner alleged that they were not informed whether the goods were held for verification of the Certificate of Origin or any other reason. The petitioner complied with the CAROTAR, 2020 requirements and submitted the Certificate of Origin, showing the necessary value addition in Bangladesh. The petitioner argued that the customs authorities cannot indefinitely hold up the assessment/clearance without passing a reasoned order and should have either cleared the goods or initiated verification with proper communication.

3. Requirement of bank guarantee for provisional assessment under Section 18 of the Customs Act, 1962:
The petitioner contended that if the verification was initiated on a random basis, no bank guarantee should be required as per Rule 6(1)(c) of CAROTAR, 2020 and CBIC’s circulars. The petitioner cited a previous court decision (Pijush Banik vs. Union of India and Others) where the court directed provisional assessment and release of goods on obtaining an indemnity bond without a bank guarantee. The petitioner requested a similar order for provisional assessment under Section 18 without requiring a bank guarantee.

Respondent's Argument:
The respondents argued that the petitioner was asked to submit additional information for verification of the Certificate of Origin. The verification was initiated under Rule 5(4) of CAROTAR, 2020, and the petitioner was informed about the reasons for not clearing the goods. The respondents contended that the petitioner was given the option for provisional assessment under Section 18 of the Customs Act, 1962, with a bank guarantee, which the petitioner did not furnish. They maintained that the verification was justified due to inaccuracies in the petitioner's declaration regarding value addition in Bangladesh.

Court's Decision:
The court found that the verification process was justified due to inaccuracies in the petitioner's declaration and some undetermined components of manufacturing costs. The petitioner was informed about the option for provisional assessment and the requirement of a bank guarantee. The court concluded that the petitioner could get the goods released by furnishing the required security (bank guarantee or cash) and dismissed the writ petition. No order as to costs was made, and the records were ordered to be returned.