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TMI Blog2015 (6) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... ase that the power conferred under the statute upon the proper officer have been negated and/or taken away by framing the regulations, the regulation cannot have a paramount impact upon the substantive statute. It would be a different thing where the power is circumscribed to be exercised in the manner to be provided in the subordinate legislation. It is clearly discernible from Regulation 2 thereof that where the provisional assessment made by the proper officer, the importer is required to pay maximum 20% of such provisional duty as assessed together with certain conditions as to the surety and/or security provided under Regulation 4 thereof. Regulations have its applicability at the pre-stage of provisional assessment and not at the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for provisional assessment and provisional release before the authority under Section 18 of the Customs Act. Subsequent to the filing of the writ petition the authority has provisionally assessed and communicated the same to the petitioner requiring him to deposit the full differential amount as well as a P.D. Bond covering the same. 3. According to the petitioner though the authority is vested with discretion under Section 18 of the Customs Act but such discretion should be exercised reasonably, rationally and in consonance with the provision regulating such discretion. In particular it is submitted that Regulations 2 and 4 of Customs (Provisional Duty Assessment) Regulation, 2011 provides for the conditions allowing provisional asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty on the imported goods and may direct the importer to furnish such security as the said authority deems fit for payment of deficiency between the duty finally assessed and the duty provisionally assessed. Sub-section (2) of Section 18 of the Act provides either for payment of an excess amount of duty or the refund in case the authority found that the duty provisionally assessed is higher than the duty finally assessed. 7. The Customs (Provisional Duty Assessment) Regulation, 2011 is promulgated in exercise of power conferred under Section 56 of the Customs Act read with Section 18 of the said Act. It is a settled proposition of law that the subordinate/delegated legislation should be in conformity with the substantive provision of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake an exercise of substituting its own discretion, except in a case where it is found that the so-called exercise of discretion was either mala fide or coloured by collateral consideration. 12. In light of the aforesaid legal position if one examines the communication dated 12-5-2010, which is under challenge in the present petition, it becomes clear that the respondent authority has virtually carried out the process stipulated by Section 18 of the Act read with the Regulations when one considers the following extracts from the said communication : Pending production of original commercial invoice, bill of sale, document evidencing payment of purchase price to the sellers and any other document/information required by the department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnish bank guarantee issued by any nationalised bank for the balance amount of differential duty i.e. ₹ 16251627/- (Rs. 20314534/- ₹ 40629077- = ₹ 162516627/-) in favour of the President of India through the undersigned. 13. Regulation 4 of the Regulations reads thus : 4. Surety or security of the bond. - The proper officer may require that the bond to be executed under these regulations may be with such surety or security, or both, as he deems fit. Reading the provision of Regulation 4, in the light of the provision of Section 18 of the Act, it is apparent that under the said provision the proper officer may require that the bond executed under the Regulations may be with surety or security or both, as he dee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. This Court cannot accept the submission of Mr. Saraf that the said regulations have its applicability at the pre-stage of provisional assessment and not at the stage of provisional assessment. Such interpretation in my view shall render the entire Regulations unworkable and meaningless. The decision of the authority in directing the petitioner to pay the entire amount of provisional duty so assessed and the surety of equal amount in the absence of P.D. Bond is contrary to the aforesaid Regulations and, therefore, cannot be sustained. 11. This Court, therefore, directs the proper officer i.e. the Respondent No. 3 herein, to consider the matter afresh in the light of the observations made hereinabove within two weeks from the date ..... X X X X Extracts X X X X X X X X Extracts X X X X
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