Provisional assessement of Bill of Entry- Reg

[vinay wakde]

We have imported Iron Ore Pellets and filed Bill of Entry to the Customs Department. The Bill of Entry is assessed provisionally. To protect the demand of duty, if any, while finalization of said Bill of entry, the Customs Department has taken cash security deposit of 5.5 Lacs from us.

After finalization of the Bill of Entry, the Customs Department has demanded ₹ 2.65 Lacs with appropriate interest in spite of ₹ 5.5 lacs cash security deposit paid by. We have submitted a letter to the Customs Department to appropriate the demand against the refund claim of ₹ 5.5 Lacs filed by us after finalization of said B/E. However, we have been informed by the Customs authority to pay ₹ 2.65 Lacs with interest then only the refund claim of ₹ 5.5 lacs of cash security deposit will be settled. We feel that interest should not be recovered from us on demand at the time of finalization of Bill of entry, as we have already deposited cash security deposit to the Department.

Kindly advised in the matter.

Regards,

VINAY

[Ganeshan Kalyani]

Sir, have they given anything in writing. Have they mentioned any rule /section in support of their contention. Thanks.

[KASTURI SETHI]

In the cases of provisional assessments when finalised, interest is payable from the day one.

[vinay wakde]

Thanks, for reply.

Regards,

VINAY

[YAGAY andSUN]

Section 18(2) (b) is the relevant section of the Custom Act, 1962 for payment of interest in case of assessment is conducted provisionally.

[Ganeshan Kalyani]

The concern seems to be valid. When deposit is made then interest is demanded. The Govt kitty is filled up. Then why interest as if the assessee has delayed payment or has default the payment.

Experts please share your views on this. Thanks.

AI Summary

Interest on provisional customs assessment may be payable from the first day, affecting refund of security until demands are met. Provisional assessment led to a cash security deposit to cover potential duty. After finalization the Customs Department demanded duty plus interest and refused to refund the security until payment of demand and interest. The importer argues interest should not apply where cash security was deposited; forum replies indicate that interest on duties for provisional assessments is payable from the first day under the statutory interest provision and that refund may be withheld pending payment.