Bank Guarantee

[Rohidas Kamath]

Back ground:

The value for calculation of customs duty of some of the bulk cargo for import depends on various factors like test report, weighment, non availability of original documents etc for which an importer has to opt for provisional assessment under the provisions of Section 18(1) of the Customs Act 1962. The importer has to execute bond and Bank guarantee as per the instructions of the proper assessing officer at the time of import.

Query:

Let us assume that the proper officer finalises the bill of entry and demands differential duty. Aggrieved by the order, the importer prefers appeal to Commissioner of Customs (A) on various grounds. In case the Commissioner of Customs(A) remands back the matter to the original adjudicating authority(Lets us ignore the fact as to whether Commissioner (A) has power to remand or not),:

1) what is the status of provisional assessment

2) In the meantime, the BG executed for specific period is due for renewal. Whether BG is to be renewed or not. if yes why, if not why not (please provide specific provisions, case laws)

AI Summary

Provisional assessment: whether provisional security and bank guarantees remain effective during remand and appeal proceedings. Provisional assessment under Section 18(1) of the Customs Act, 1962 obliges execution of a bond and bank guarantee when value cannot be finally determined. Key issues are whether the provisional assessment remains effective after a remand to the original adjudicating authority and whether a time bound bank guarantee must be renewed during the pendency to keep security for any differential duty intact, implicating the officer's powers to call on, extend, or require fresh security.