1989 (4) TMI 236 - AT - Customs

Tribunal rules in favor of appellants in Project Import case, deems Custom House's appropriation unjustified.

PROJECTS DEVELOPMENT INDIA LTD. Versus COLLECTOR OF CUSTOMS

The Tribunal ruled in favor of the appellants in a case involving the import of goods under Project Import. The Custom House's appropriation of Rs. 20 ... Demand Issues:1. Non-submission of documents for finalization of assessment under Project Import bond.2. Appropriation of Rs. 20 lakhs by Custom House without finalizing assessment.3. Prima facie case, financial hardship, and waiver of pre-deposit.4. Enforcement of bond due to non-submission of documents.5. Remand for re-consideration of the matter by the original authority.Analysis:1. The case involved the import of goods under Project Import, where the appellants cleared the goods provisionally by executing a bond under Section 38 of the Customs Act. Subsequently, the Custom House issued a notice presuming non-submission of documents required for finalization of assessment, leading to the appropriation of Rs. 20 lakhs based on this presumption.2. The Assistant Collector and the Collector (Appeals) held that the appellants had not complied with the bond conditions by not submitting the necessary documents. However, the appellants contended that they had indeed submitted all required documents, including a reconciliation statement, bills of entry, and supplier invoices, as evidenced by a letter dated 9-12-1985. They argued that the appropriation of Rs. 20 lakhs without finalizing the assessment was unjustified.3. The appellants further argued that their financial condition was precarious, having incurred significant losses, and insisted on the hardship they would face if required to pre-deposit the amount in question. The JDR representing the respondents maintained that the case was a straightforward enforcement of the bond due to non-submission of documents.4. The Tribunal observed that the department's action was prima facie erroneous, as it was necessary to finalize the assessment before enforcing the bond terms or raising a demand. The Tribunal emphasized that the amount to be confirmed and realized should be based on actual due amounts, not arbitrary appropriation. The orders of the Assistant Collector and the Collector (Appeals) were set aside due to lack of justification in confirming the demand.5. The Tribunal remanded the case to the Assistant Collector for re-examination, emphasizing the importance of cooperation from both sides in finalizing the assessment. The appellants were urged to provide any additional documents or records they could locate, while the Custom House was directed to make efforts to trace the submitted documents. The Assistant Collector was instructed to re-examine the case based on all available materials and take further action as per the law.In conclusion, the Tribunal found in favor of the appellants, highlighting the need for a fair assessment process and cooperation between the parties involved in resolving the matter.