2001 (6) TMI 72 - HC - Customs

Court mandates provisional clearance of imported goods, emphasizes Customs Act Section 18 compliance.

The Court allowed the writ petition, directing the respondent to clear the goods based on the initial duty assessment. The petitioner's bond already ... Imported goods Issues involved:Petition for issuance of a writ of Certiorarified Mandamus to quash an order related to Customs duty assessment and clearance of imported materials.Analysis:1. Background and Contractual Obligations:The petitioner had contracts with a foreign seller for the supply of RBD Palmolein. Shipments were made periodically, and the price was fixed per metric tonne based on the contract terms. Various consignments were shipped, and corresponding Bill of Entries were filed before the authorities.2. Dispute over Duty Assessment:A specific contract agreed upon a shipment date, price, and quantity. The petitioner filed a Bill of Entry for this contract, and Customs authorities initially assessed the duty. However, a re-assessment was done later, increasing the duty payable significantly, along with a requirement for a bond of Rs. 3 crores.3. Legal Arguments - Petitioner's Position:The petitioner argued that the issue falls under Section 18 of the Customs Act, which allows provisional clearance upon furnishing a bond. The petitioner had already furnished a bond for Rs. 3 crores, exceeding the additional duty demanded.4. Customs Department's Response:The Customs department contended that no payment had been made towards the Bill of Entry, and the petitioner needed to clear the goods first. Any dues could be refunded later if the petitioner succeeded in adjudication.5. Court's Decision - Provisional Clearance under Section 18:The Court emphasized that provisional assessment must adhere to the provisions of the Customs Act. Section 18 allows provisional assessment when the importer furnishes adequate security for any deficiency in duty payment. In this case, the difference in duty was Rs. 29 lakhs, already covered by the bond of Rs. 3 crores.6. Final Judgment and Directions:The Court directed the third respondent to clear the goods based on the duty assessment done by the Customs department. The petitioner was instructed to produce the bond as directed earlier. The Customs authorities were permitted to further adjudicate the issue as per the Act.In conclusion, the writ petition was allowed, and the connected Writ Miscellaneous Petition was closed without any costs. The judgment clarified the application of Section 18 of the Customs Act in the context of provisional clearance of imported goods, resolving the dispute over duty assessment and clearance of the imported materials.