2026 (1) TMI 490 - HC - Customs

Delay in finalising customs assessments for multiple imports after provisional release leads to remand, no new documents allowed

Unexplained inordinate delay in finalising customs assessments for imports covered by multiple bills of entry, despite provisional release, was held to ... Inordinate delay in finalization of Assessment Bill of Entries - cause of action - Grant of provisional release u/s 110A - encashment of bank guarantees pending final assessment - principles of natural justice - levy of customs duty/penalty in the proposed assessment order will be arbitrary and illegal - violation of the provisions of the Customs Act and contrary to various decisions rendered by the Constitutional Courts - HELD THAT:- Neither in the counter affidavit nor in the communications exchanged between the parties, there is any explanation given by the respondents for the inordinate delay in passing of the final assessment order. Since the petitioner in the year 2022 itself, just prior to the filing of these writ petitions, had requested the respondents to pass the final assessment order, this Court is not inclined to grant a positive relief as prayed for by the petitioner in these writ petitions, but, instead, deems it fit to remand the matter back to the respondents for passing of the final assessment order after giving due consideration to all the contentions that have been raised in these writ petitions before the respondents, which includes the contention of inordinate delay on the part of the respondents in passing the final assessment order. This Court is of the considered view that if the final assessment is made by the respondents within the time limit fixed by this Court, namely, six weeks, the petitioner will not be prejudiced, as the matter can also be listed again before this Court for reporting compliance. Since the subject imports covered under 32 bills of entries are of the year 2014, and since the petitioner had obtained provisional release of the goods in the year 2014 itself, the question of directing the petitioner to furnish further documents apart from the documents already furnished by the petitioner before the Customs Department for obtaining provisional release of the goods, does not arise. Therefore, it is made clear that the respondents shall not direct the petitioner to furnish any further documents, and only based on the documents available with the Customs Department, they will have to pass the final assessment order. The second respondent is directed to pass the final assessment order covered under 32 bills of entries, which are the subject matter of these writ petitions, after giving due consideration to the contentions of the petitioner as raised in these writ petitions including the ground of inordinate delay on the part of the respondents to pass the final assessment order, within a period of six weeks from the date of receipt of a copy of this order, by adhering to the principles of natural justice, as well as by adhering to the circulars issued by CBFC, which includes the grant of personal hearings to the petitioner. Issues: (i) Whether the Customs authorities' long delay in passing final assessment in respect of imports provisionally released under Section 110A warrants relief from the Court; (ii) Whether the respondents can encash the bank guarantees furnished for provisional release pending final assessment; (iii) Whether the respondents may direct the petitioner to produce further documents beyond those already furnished at the time of provisional release.Issue (i): Whether the inordinate delay by the respondents in passing final assessment orders in respect of goods provisionally released under Section 110A justifies judicial relief and the appropriate remedy.Analysis: The Court found that there has been an inordinate delay since provisional release was granted in 2014 and that disputed questions of fact and communications between the parties exist. The respondents' counter affidavit did not address the delay on merits but agreed to reconsider and undertake fresh assessment. The Court declined to decide the merits itself and instead ordered a remand with a specific timeline and directions to adhere to principles of natural justice and applicable departmental circulars.Conclusion: Partly in favour of AssesseeIssue (ii): Whether the respondents are entitled to encash the bank guarantees furnished by the petitioner for provisional release prior to conclusion of the final assessment.Analysis: The Court recorded that one bank guarantee had already been encashed in 2022 without prior notice and observed a likelihood of further encashments. The Court restrained encashment of the remaining bank guarantees pending outcome of the final assessment to be conducted within the directed timeframe.Conclusion: In favour of AssesseeIssue (iii): Whether the respondents can require the petitioner to furnish additional documents beyond those already produced at the time of provisional release when passing the final assessment.Analysis: Since provisional release and the relevant production of documents occurred in 2014, and the Court found no basis to direct further production, it prohibited the respondents from directing the petitioner to produce any additional documents and required final assessment to be made based only on documents already on record.Conclusion: In favour of AssesseeFinal Conclusion: The matter is remitted to the respondents for final assessment on the existing record, with directions to afford personal hearings and observe natural justice and departmental circulars, to be completed within six weeks; the remaining bank guarantees are restrained from encashment pending that assessment and no further documents shall be called for from the petitioner.