Time-bound project import assessment: bank guarantees cannot be renewed or encashed after required installation proof is furnished.

An importer who had furnished the required import documents, installation records and verification material, and whose installation and commencement of operations had been confirmed by the jurisdictional excise authority, was entitled to interim protection against encashment and renewal of bank guarantees pending finalisation of project import assessment. The applicable Customs Board circular required such assessments to be finalised within 60 days of submission of the requisite documents and stated that bank guarantees should not be renewed once proof of utilisation and installation had been produced, unless a justified delay was recorded. Because the departmental delay was not attributable to the importer, the administration could not insist on renewal or encashment of the guarantees.

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Issues: Whether the petitioner was entitled to interim protection against encashment and renewal of bank guarantees pending finalization of the project import assessment.

Analysis: The record showed that the petitioner had submitted the required import documents, installation and verification materials, and the jurisdictional Central Excise authority had confirmed installation and commencement of operation of the imported machinery. The applicable Customs Board circular required finalization of project import assessments within 60 days of submission of requisite documents and stated that bank guarantees should not be renewed once the required proof of utilization and installation had been furnished, unless justified delay existed for recorded reasons. The circulars issued by the Board were binding on subordinate authorities, and the delay in finalizing the assessment could not be visited on the petitioner when its part of the compliance had already been completed and the departmental verification had also been reported.

Conclusion: The petitioner was entitled to interim protection and the respondents were not justified in insisting on renewal of the bank guarantees or in encashing them pending finalization of the project import assessment.

Ratio Decidendi: Where an importer has furnished all requisite documents and the jurisdictional authority has verified installation and utilization, the Customs administration is bound by its own circular governing time-bound finalization of project import assessments and cannot insist on renewal of bank guarantees merely because the department has delayed completion of assessment.

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