Customs provisional assessment must follow Section 28DA procedure before insisting on bank guarantee security

Provisional assessment of an imported arecanut consignment, together with any insistence on security, must be tested against the statutory procedure under Chapter V-AA and Section 28DA of the Customs Act, 1962. Where preferential tariff treatment has not been suspended and the record does not show any call for information that was not furnished, security by bank guarantee cannot be insisted upon without that foundation. The proper course is provisional re-assessment of the Bill of Entry under the prescribed customs procedure, while also considering the treatment of other related Bills of Entry.

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Issues: Whether the provisional assessment of the imported consignment of arecanut and the insistence on security were to be re-examined under the procedure relating to preferential tariff treatment under Section 28DA of the Customs Act, 1962, before permitting clearance.

Analysis: The record did not show that any information had been called for from the importer and failed to be furnished, nor was there any suspension of preferential tariff treatment under Section 28DA of the Customs Act, 1962. In those circumstances, the direction to furnish security by way of bank guarantee could not stand on the footing suggested by the respondents. The proper course was to re-assess the Bill of Entry provisionally in accordance with the procedure prescribed under Chapter V-AA and Section 28DA of the Customs Act, 1962 and the rules made thereunder, while also taking note of the course adopted in respect of the other Bills of Entry referred to in the order.

Conclusion: The issue was answered in favour of the importer to the extent that the matter required re-assessment under Section 28DA before clearance could be effected.

Ratio Decidendi: Where preferential tariff treatment has not been suspended and no call for information has been shown to have been made and defaulted, the clearance process must proceed in accordance with the statutory procedure under Section 28DA of the Customs Act, 1962 rather than by insisting on security without such foundation.

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