2025 (9) TMI 1645 - HC - Customs

Mandamus denied; authority ordered to provisionally assess imported goods under Bill of Entry No. 3879527 within four weeks

The HC declined to grant a mandamus directing the authority to exercise its discretion in a specific manner, holding such relief inappropriate absent a ... Seeking to assess and issue out of charge order and clear the goods under CTI 8517 1810 - alternatively, seeking a writ to direct the Respondent No. 3 to provisionally assess the goods under the CTI 8517 1810 without payment of duty and without executing any bond/guarantee - HELD THAT:- The petitioners have sought for a writ of mandamus against the Respondent No. 3 to exercise discretion in a particular manner. Generally, such a writ is not issued unless a compelling case is made out. Normally, a writ of mandamus can be issued to an authority to decide the matter in accordance with law. After considering rival contentions, it is satisfied that no case is made out to deviate from this normal practice. The respondents cannot delay the provisional assessment unreasonably - The rival contentions must be considered and a view one way or the other must be reached or at least provisionally reached within some reasonable time so that the importers know where they stand . The Respondent No. 3 is directed to provisionally assess the imported goods under bill of entry No. 3879527 dated 14th August 2025 as expeditiously as possible and in any event within a period of four weeks from the uploading of this order - petition disposed off. ISSUES PRESENTED AND CONSIDERED 1. Whether a writ of mandamus may be issued to direct the customs authority to assess and issue an out-of-charge order (final clearance) in respect of imported goods classified under a specific Customs Tariff Item (CTI). 2. Whether, alternatively, a writ of mandamus may be issued directing the customs authority to provisionally assess and allow clearance of imported goods under the specified CTI without payment of duty and without execution of bond/guarantee. 3. The extent to which a decision of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) binds the customs authority pending an appeal to the Supreme Court, and the impact of other tribunal/Supreme Court decisions relied upon by the customs authority. 4. Whether and in what timeframe the customs authority is obliged to provisionally assess imported goods when rival classification/contentions are pending. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Availability of writ of mandamus to compel final assessment and out-of-charge order Legal framework: The writ of mandamus is an extraordinary remedy to compel public authorities to perform statutory or public duties but is not ordinarily used to direct the authority to exercise its discretion in a particular manner; it may, however, require the authority to act in accordance with law and to decide the matter within a reasonable time. Precedent treatment: The Court adhered to the general principle limiting mandamus to compelling action in accordance with law rather than prescribing the substance of the authority's discretion. The Court considered the existence of an appellate tribunal decision favourable to the petitioner but did not treat that alone as creating a freestanding entitlement to a mandamus directing final assessment. Interpretation and reasoning: The Court held that the petitioner sought an order compelling the authority to exercise discretion in a particular manner (i.e., to assess under a particular CTI and issue out-of-charge). Absent a compelling case to depart from established practice, the Court would not direct the authority how to exercise its classification/assessment discretion. The correct role of the writ is to require the authority to decide lawfully and promptly, not to substitute the Court's view on classification for that of the authority. Ratio vs. Obiter: Ratio - mandamus will not ordinarily be issued to dictate the manner of discretion; it can require lawful and timely decision. Obiter - the general remark that a tribunal decision may be persuasive does not itself convert into a mandate for final administrative action where competing legal contentions exist. Conclusion: No writ of mandamus was granted to compel final assessment and out-of-charge under the specified CTI; the Court declined to prescribe the substantive exercise of the customs authority's discretion. Issue 2 - Availability of mandamus for provisional assessment without duty/bond Legal framework: Provisional assessment is an administrative mechanism intended to enable movement/clearance of goods pending final determination; courts normally require a reasoned exercise of administrative discretion and will guard against unreasonable delay in provisional processes. Ordering release without duty or bond is an extraordinary relief and typically requires exceptional justification. Precedent treatment: The Court applied normal mandamus principles to the provisional assessment context, emphasizing that courts do not routinely direct authorities to release goods free of duty/bond absent clear legal entitlement or compelling circumstances. Interpretation and reasoning: The Court considered the petitioner's alternative plea for provisional assessment without payment of duty and without a bond/guarantee, but concluded that instead of granting the extraordinary relief of unconditional release, the appropriate judicial intervention was to require the authority to process and decide the provisional assessment promptly and to provide a reasoned order. The Court balanced the importer's interest in certainty and the authority's duty to consider rival classification contentions. Ratio vs. Obiter: Ratio - courts will not order unconditional release without duty/bond through mandamus as a rule; they may, however, compel prompt provisional assessment and reasoned decision-making. Obiter - examples of circumstances that might justify unconditional release were not articulated as binding propositions. Conclusion: No order was made releasing goods without payment of duty or bond. Instead the Court directed the customs authority to provisionally assess the goods expeditiously and to pass and communicate a reasoned order within a specified timeframe. Issue 3 - Binding effect of CESTAT decision pending appeal; impact of other appellate decisions Legal framework: Decisions of the CESTAT are authoritative in proceedings before customs authorities absent being set aside; however, where appeals are pending before higher courts, the binding effect may be affected by orders in those appeals (e.g., interim orders), and distinctions of facts between matters are material for classification disputes. Precedent treatment: The Court noted that the petitioner relied upon a CESTAT judgment classifying identical goods under the contested CTI, while the customs authority relied upon another CESTAT decision and the Supreme Court's disposition in that other case. The Court accepted that tribunal decisions bind the authority unless and until reversed but also recognized that factual distinctions drawn by the tribunal may limit applicability. Interpretation and reasoning: The Court acknowledged the petitioner's submission that the relevant CESTAT decision distinguished earlier authority relied upon by customs and that the Supreme Court had not granted interim relief overturning the tribunal's decision. Conversely, the customs authority relied on a decision in which the Supreme Court dismissed an importer's appeal; the Court observed the existence of competing legal positions and factual distinctions between the cases. Given these competing precedents and the pendency of higher court review in the petitioner's matter, the Court refrained from deciding the classification issue on merits and limited its intervention to ensuring administrative expedition. Ratio vs. Obiter: Ratio - where tribunal decisions are invoked, the customs authority must consider them but may lawfully reach a different view if there are sound legal or factual reasons; the pendency of appeals does not automatically mandate a particular administrative outcome. Obiter - the Court's observations about distinctions between the cited tribunal decisions are fact-specific and not authoritative beyond the record. Conclusion: The Court did not hold that the CESTAT decision conclusively bound the customs authority to grant final relief; rather, the existence of competing tribunal/supreme court treatments justified prompt but independent administrative determination by the customs authority. Issue 4 - Obligation and timeframe for provisional assessment when rival contentions exist Legal framework: Administrative authorities are obliged to decide matters in accordance with law and within a reasonable time; unreasonable delay in provisional assessment or in concluding classification disputes may be curtailed by judicial direction to dispose within a stipulated reasonable period, including provision of reasoned orders and opportunity to be heard. Precedent treatment: The Court applied well-established supervisory principles permitting judicial directions as to timeframe and procedural fairness without pronouncing on the merits of the classification dispute. Interpretation and reasoning: Finding that the respondents cannot delay provisional assessment unreasonably, the Court directed the customs authority to provisionally assess the goods as expeditiously as possible and, in any event, within four weeks from uploading of the order. The Court required the authority to hear the importer and to pass and communicate a reasoned order, thereby preserving procedural fairness and the authority's discretion to reach a substantive view. Ratio vs. Obiter: Ratio - where rival contentions exist, the customs authority must reach and communicate at least a provisional view within a reasonable and court-directed timeframe; this includes a hearing and a reasoned order. Obiter - the specific four-week period is an exercise of the Court's discretion in the facts of this case and not a categorical rule for all matters. Conclusion: The Court directed provisional assessment to be completed with a reasoned order and communication within four weeks, keeping open substantive contentions for administrative determination; failure to comply would be contrary to the Court's order but no further final substantive mandate was given.