Provisional customs assessment and penalty: finalisation permits duty adjustment, but Section 18(2) does not itself require penalty notice.

Provisional assessment under Section 18 of the Customs Act is used where further data is needed before a final assessment, and on finalisation the officer may recover short-levied duty or refund excess duty. The text states that Section 18(2) does not itself create a requirement of show cause notice for penalty proceedings when the assessment is finalised. It further notes that the scheme of provisional assessment under Section 18 is pari materia with the approach under Section 11A of the Central Excise Act, 1944. On that basis, penalty was held not sustainable in the provisional assessment context, with consequential relief granted.

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Issues: Whether penalty could be imposed when the imports were assessed provisionally and the assessment was later finalised, and whether notice under the customs law was required for recovering differential duty and imposing penalty.

Analysis: Provisional assessment under Section 18 of the Customs Act is made where the assessing officer requires further data before arriving at a final view. On finalisation, sub-section (2) of Section 18 contemplates only payment of short-levied duty or refund of excess duty, and does not itself provide for a show cause notice for penalty proceedings. The Tribunal also applied the principle that the scheme under Section 18 is pari materia with the approach under Section 11A of the Central Excise Act, 1944 for finalisation of provisional assessments.

Conclusion: Penalty was not sustainable where the assessment was provisional, and the appeals were allowed with consequential relief.

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