TaxTMI 
TaxTMI 
2013 (8) TMI 473
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.... complied with and consignment involved in B/E No.2842630 dated 24.02.2011 and B/E 3470916 dated 11.05.2011 may be released accordingly. As per direction of the Hon'ble Court and hearing held on 21.05.2012. In view of the fact that investigation by DRI into the undervaluation of the consignment covered in these two B/Es is still not over, the duty liability on these two Bills of Entry are hereby ordered to be provisionally assessed under Section 18 of the Customs Act, 1962 subject to the importer executing a bond and bank guarantee for Rs.38,25,658/- separately and depositing in cash the provisionally assessed duty of Rs.9,65,585/-. The said amounts have been calculated considering the provisional value @USD 7 per sq.yard and value likely to be finally assessed @ 22 USD per Sq.Yard. Penalties expected to be imposed under Sections 112 read with Sec. 111(m) and 114A of the Customs Act, 1962, for undervaluation and short levy due to willful misstatement or suppression of facts, if any, as may be found as a result of the ongoing investigation, has also been taken into account for the purpose of estimating the amounts of bond and bank guarantee, as DRI in letter dated 25.08.2011 and 26.....
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....of the provisional duty and to release the goods forthwith. Shri Dharmadhikari, learned counsel appearing for respondents opposed the aforesaid contentions and submitted that as per provisional assessment order, there is a finding that the goods were undervalued. As per petitioner, price of the goods was shown as US Dollar 7 per Sq.Yard while price of the goods was 22 US Dollar per Sq.yard and the aforesaid amount of Rs.38,25,658/- is the amount which could have been found by way of duty against the petitioner, but inspite of this, provisional assessment duty has been assessed at Rs.9,65,585/-. It is submitted that the petitioner may deposit provisional assessed duty and may furnish bond and bank guarantee of Rs.38,25,658/- as has been shown in the order. It is also submitted that in case the goods are released on deposit of 20% of the provisional assessment amount, there may be a possibility that remaining amount of the duty as may be finally assessed may not be recovered from the petitioner as petitioner company is based at Bhadohi (U.P.) and the respondents are not in a position to say that the remaining amount can be recovered from the petitioner. Reliance is placed to a judgm....
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....ioner, a bond can be asked from the importer. The Division Bench of Kerala High Court considering the similar provision in Mohammed Fariz & company (supra), held in paras 12 and 13 thus:- "12. Since we have considered the scope of provisional assessment under Section 18 of the Act, we have to necessarily deal with the conditions with regard to collection of duty and security and release of goods pursuant to orders issued under Section 18 of the Act. In this regard conditions of provisional assessment and release of goods are contained in Regulation 2 & 4 of the Regulations framed under Section 157 read with Section 18(1) of the Act, which are extracted hereunder for easy reference; 2. Conditions for allowing provisional assessment. - Where the proper officer on account of any of the grounds specified in sub-section (1) of section 18 of the Customs Act, 1962 (52 of 1962), is not able to make a final assessment of the duty on the imported goods or the export goods, as the case may be, he shall make an estimate of the duty that is most likely to be levied hereinafter referred to as the provisional duty. If the importer or the exporter, as the case may be, executes a bond in an amou....
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....h requires surety or security in support of the bond executed which is noting but an undertaking to pay duty on demand. However, a surety bond should be valid only when it is supported by proper security, which may be by way of mortgage of immovable property or Bank Guarantee in favour of the Department or otherwise, and bond executed without proper security would serve only as a document to claim the amount. The Officer should realise that the best and safest course open to the Department is to demand Bank Guarantee from the local branch of a Nationalised Bank for balance provisional duty determined, so that recovery is ensured without any necessity for the Department to chase the parties and looking for their assets. In fact, credentials of the importer/exporter and such other matters should weigh with the Department in relaxing the condition for security, which in the normal course should be Bank Guarantee." Aforesaid order does not say that importer is required to deposit entire amount of provisional duty, but interpreted Regulations 2 and 4 by saying that only 20% of the provisional duty is to be deposited and for remaining amount of duty, bond and bank guarantee can be asked....