Quasi-judicial customs discretion cannot be curtailed by circulars imposing extra exemption conditions or mandatory bank guarantees.

Section 151A of the Customs Act, 1962 does not authorise customs instructions that compel a particular quasi-judicial assessment, impose extra conditions for a statutory exemption, or eliminate officer discretion in provisional assessment. The Delhi High Court treated circulars directing denial of preferential duty on gold jewellery imports from Indonesia and requiring a 100% bank guarantee as ultra vires and unsustainable. It also held that a show cause notice reproducing those invalid circulars, while ignoring country-of-origin certificates, reflected no independent application of mind and could not support consequential proceedings.

---

---

Issues: (i) Whether the circulars directing customs officers to deny preferential customs duty benefit on imports of gold jewellery from Indonesia and to demand 100% bank guarantee for provisional assessment were within the scope of Section 151A of the Customs Act, 1962; (ii) Whether the show cause notice and consequent proceedings issued to the importer were invalid because they were based on the impugned circulars and ignored the country-of-origin certificates.

Issue (i): Whether the circulars directing customs officers to deny preferential customs duty benefit on imports of gold jewellery from Indonesia and to demand 100% bank guarantee for provisional assessment were within the scope of Section 151A of the Customs Act, 1962.

Analysis: The power to issue instructions under Section 151A is limited to guidance for uniform administration and cannot be used to compel a particular assessment, restrict the statutory exemption regime, or dictate how a quasi-judicial customs officer must decide a case. The impugned circular of 6 October 2015 proceeded on factual assumptions unsupported by the material and imposed additional conditions for availing the exemption. The later circular of 20 January 2016 further directed officers to insist on a 100% bank guarantee in provisional assessment, which was inconsistent with the provisional assessment regulations and left no discretion to the assessing officer.

Conclusion: The circulars were held to be ultra vires Section 151A of the Customs Act, 1962 and unsustainable in law.

Issue (ii): Whether the show cause notice and consequent proceedings issued to the importer were invalid because they were based on the impugned circulars and ignored the country-of-origin certificates.

Analysis: The show cause notice was a virtual reproduction of the invalid circular and therefore reflected no independent application of mind by the customs authority. Since the notice and subsequent action were founded on an unlawful instruction and disregarded the accepted certificates of origin, the consequential proceedings could not stand. In these circumstances, relegation to alternative statutory remedies would serve no useful purpose.

Conclusion: The show cause notice and the consequential proceedings were held to be invalid and unsustainable in law.

Final Conclusion: The impugned customs circulars and the consequential demand for full bank guarantee were quashed, and the connected proceedings were set aside, leaving customs officers to decide future matters according to law without being influenced by the quashed instructions.

Ratio Decidendi: Section 151A does not authorise administrative instructions that compel a particular quasi-judicial assessment or impose additional conditions that restrict a statutory exemption.

---