TaxTMI 
TaxTMI 
Guidelines regarding Provisional Assessment under section 18 of the Customs Act, 1962
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....essed or re- assessed' ; (b) execution of a bond; and (c) surety or security or both, as deemed fit. 3.1 Section 18 of the Customs Act, 1962 defines the cases where provisional assessment may be resorted, as under: (1) Notwithstanding anything contained in this Act but without prejudice to the provisions of section 46, (a) where the importer or exporter is unable to make self-assessment under sub-section (1) of section 17 and makes a request in writing to the proper officer for assessment; or (b) where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test; or (c) where the importer or exporter has produced ail the necessary documents and furnished full information but the proper officer deems it necessary to make further enquiry; or (d) where necessary documents have not been produced or information has not been furnished and the proper officer deems it necessary to make further enquiry. 3.2 Further, Section 18 goes on to state how a provisional assessment is to be carried out: "the proper officer may direct that the duty leviable on such goods be ....
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....8 requires the same to be obtained as 'deemed fit" by the proper officer. For the sake of uniformity of practice, transparency and predictability for the tax payer, the Board has decided that the following procedure and guidelines will be followed by all Customs stations while assessing goods provisionally 3.8 Wherever, duty is to be assessed provisionally, the importer shall: (a) for the purposes of undertaking to pay on demand the deficiency, if any, between the duty as may be finally assessed and the duty provisionally assessed, execute a bond in the prescribed form (enclosed); and (b) furnish such security for the payment of the duty deficiency, as indicated in para 3 below. 3.9 The security to be furnished by the importer shall be in the form of a bank guarantee or a cash deposit, as convenient to the importer. 4. The following guidelines shall be followed while obtaining security where provisional assessment under section 18 of the Customs Act is being undertaken: Sl No Class of Importer Amount of Bank Guarantee or Cash deposit to be obtained as "security of the differential duty Remarks 1. Imports by Authorised Eco....
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....fect that the amount of security shall be determined on the basis of duty differential and not the CIF value of goods. 4.2 It is also clarified that provisional assessments under section 18 are to be carried out with respect to cases where the duty is in dispute. Cases relating to execution of a bond or undertaking specified as a condition to a notification or those requiring compliance of conditions under allied acts are not to be provisionally assessed under section 18 of the Customs Act. This position had been earlier clarified by the Ministry of Law and Justice and circulated vide Ministry F.No. 353/91/74 - Cus dated 28th January 1977. 5. Difficulties, if any, in implementation of this procedure may be brought to the notice of the undersigned. Encl: Format of bonds (R.B. TIWARI) PRINCIPAL COMMISSIONER ============= Document 1 Bond Individual Importation (With Bank Guarantee or Cash Deposit) (To be executed by the Importer of goods with bank guarantee/cash deposit under section 18 of the Customs Act, 1962 (52 of 1962) (Circular No. 38/2016-Customs dated 22/08/2016 issued from CBEC F.No: 465/01/2016 - Cus V) and holding KNOW ALL MEN ....
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.... remain in full force and virtue. AND IT IS HEREBY AGREED AND DECLARED by the importer as follows:- 1. This bond and cash deposit/bank guarantee are given under the orders of the Central Government for the performance of an act which is in public interest. 2. The President through the [Deputy Commissioner / Assistant Commissioner of Customs] or other officer may recover the said sum of Rs. in the manner laid down in Section 142 of the Customs Act, 1962 without prejudice to any other mode of recovery. IN WITNESS WHEREOF the importer has herein set and subscribed its hands and seals the day, month and year first above written. SIGNED AND DELIVERED by and on behalf of the importer at_ the presence of:- (Signature of Authorised Signatory and Corporate Seal) (place) in Witnesses: 1. 2. Accepted for and on behalf of the President of India (Signature of the Proper Officer) Schedule to Bond (Individual importation) (With Bank Guarantee or Cash Deposit) (To be executed by the Importer of goods with bank guarantee/cash deposit under section 18 of the Customs Act, 1962 (52 of 1962) (Circular No.38/2016-Customs dat....
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.... the importer pays to the President, the difference between the duty finally assessed and the duty provisionally assessed in respect of the imported goods and mentioned in the Schedule hereto annexed . Then the above written bond shall be void and of no effect; otherwise the same shall remain in full force and virtue. AND IT IS HEREBY AGREED AND DECLARED by the importer as follows:- 1. This bond is given under the orders of the Central Government for the performance of an act which is in public interest. 2. The President through the [Deputy Commissioner / Assistant Commissioner of in the manner laid Customs) or other officer may recover the said sum of Rs down in Section 142 of the Customs Act, 1962 without prejudice to any other mode of recovery. IN WITNESS WHEREOF the importer has herein set and subscribed its hands and seals the day, month and year first above written. SIGNED AND DELIVERED by and on behalf of the importer at_ the presence of:- (Signature of Authorised Signatory and Corporate Seal) Witnesses: 1. (place) in 2. Accepted for and on behalf of the President of India (Signature of th....
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...., at 1 a bank guarantee;' OR 1 a cash deposit mentioned in the schedule hereunder for the due observance of and performance of the terms and undertakings on the part of the importer and for being applied in part or full towards the indemnity hereby given or otherwise according to law. 1 strike out whatever is not applicable NOW THE CONDITION of the above written bond is such that - (1) If the importer shall within _days or within such extended period as the Proper Officer may allow, produce such documents and furnish such information as may be called for by the Proper Officer, and (2) If the importer pays to the President, the difference between the duty finally assessed and the duty provisionally assessed in respect of the goods imported from time to time and mentioned in the Schedule hereto annexed. Then the above written bond shall be void and of no effect; otherwise the same shall remain in full force and virtue. AND IT IS HEREBY AGREED AND DECLARED by the importer as follows:- 1. This bond and cash deposit/bank guarantee are given under the orders of the Central Government for the performance of an act which ....
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....mport-Export Code No._ hereinafter called the "Importer" (which expression shall include its successors/heirs, executors , administrators and legal representatives) are held and firmly bound unto the President of India hereinafter called the "President" (which expression shall include his successors and assigns) in the Rupees_ sum of Rs. _(please fill amount in words) to be paid to the President for which payment well and truly to be made, we bind ourselves, our successors, heirs, executors, administrators and legal representatives firmly by these presents. Sealed with our seal(s) this _ day of 20_ WHEREAS the Assistant Commissioner of Customs/Deputy Commissioner of Customs at the (place), ( hereinafter called the "proper officer") has agreed to make provisional assessment of the goods imported from time to time by us, pending submission of further documents and/or furnishing information and/or completion of further enquiries and/or chemical test and/or other test and the Proper Officer has agreed to allow provisional assessment of the goods mentioned in the schedule hereto annexed upon the....