Provisional project-import clearance under customs law permits a show cause notice for alleged misdeclaration and unauthorised importation.

Clearance of imported machinery under the Project Imports (Registration of Contract) Regulations, 1985 was treated as provisional under Section 143 of the Customs Act, 1962 where continuity bonds had been executed, so the final-clearance bar under Section 47 did not apply. On that basis, customs authorities could issue a show cause notice alleging misdeclaration, unauthorised importation, and excess installed capacity. Earlier authorities dealing with final clearance were considered inapplicable because the import arrangement remained provisional, and the notice was therefore not treated as lacking jurisdiction.

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Issues: Whether the show cause notice issued by the Customs authorities was without jurisdiction after clearance of the goods, and whether the clearance under the project import scheme was provisional so as to permit further action.

Analysis: The controversy turned on the nature of the clearance granted to the imported machinery. The petitioners relied on final clearance under Section 47 of the Customs Act, 1962 and contended that further proceedings were barred. The Court accepted the respondents' stand that the imports had been made under Project Imports (Registration of Contract) Regulations, 1985 and that the clearance was under Section 143 of the Customs Act, 1962 with continuity bonds executed, making the assessment and clearance provisional. On the materials placed before the Court, the allegation that additional machinery had been unauthorisedly imported and that the installed capacity exceeded the licensed capacity could not be said to be without basis. In that setting, the earlier decisions dealing with final clearance under Section 47 were held to be inapplicable.

Conclusion: The show cause notice was not without jurisdiction and interference in writ jurisdiction was unwarranted.

Ratio Decidendi: Where imports are cleared under a provisional project-import arrangement governed by Section 143 of the Customs Act, 1962, the customs authorities may issue a show cause notice alleging misdeclaration and unauthorised importation, and final clearance principles applicable to Section 47 do not bar such action.

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