TaxTMI 
TaxTMI 
1993 (5) TMI 25
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....executed a P.D. Bond and submitted a bank guarantee for 50% of the amount. The endorsement of each of the bills of entry reads - "submit P.D. Bond + submit bank guarantee as ascertained as practise from Bombay Customs. If no bank guarantee is taken at Bombay no bank guarantee shall be taken at Calcutta (W/O prejudice to Collectors order in file)". 3. The petitioners moved this writ application on 10th May, 1993 upon notice to the Customs Authorities. The Customs Authorities stated that they had evidence of under-valuation of the umbrella panels. They produced three quotations of three foreign sellers in this context. It was further stated that they had asked for a bank guarantee to maintain a uniform pattern in all the Customs Houses in ....
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....as the letter of Sri B.P. Verma was concerned, the respondents have handed up the original file relating to the matter. A copy of the letter as produced by the petitioner appears from the file. Therefore, there can be no dispute regarding the genuineness of the letter. 6. The goods in question have been provisionally assessed under Section 18 of the Customs Act, 1962. Section 18 of the Act provides for the provisional assessment of duty where inter ate the importer has produced all the necessary documents and furnished full information for the assessment of duty but the proper officer deems fit necessary to make further enquiry for assessing the duty. In such a case the proper officer has been given the power to direct that the duty levi....
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....orities in support of the three quotations produced on first day of hearing. In my view, neither Section 18 nor Rule 2 of the Regulations as quoted above make it a pre-condition to the exercise of power by the Customs Authorities that security of the nature specified must be furnished. All that Regulation 2 does is to put an outer limit on the amount of cash that may be required to be deposited. It does not mean that the Customs Authority does have the power to dispense with the cash deposit in terms of Regulation 2 altogether. Indeed the very endorsement on the bills of entry namely P.D. Bond bank guarantee @ 50% would show that no cash deposit was being asked for in terms of the Regulation. The matter is one of the authorities, discretion....
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....ared to be acting on the basis of a verbal instruction, it does not say whose verbal instruction, when such verbal instruction was given or on what basis such verbal instruction was issued in the first place. The basis of such instruction has not been disclosed to the Court. The Court cannot accept the same as a valid exercise of discretion. 13. This brings us to the letter of Sri B.P.Verma to Sri Tarun Roy That letter states :- "From the computer print outs obtained in respect of importation of these goods, it is seen that the prices as declared/accepted for purpose of assessment are more or less the same at all the ports in India. The price range as noticed is between US $ 3.60 to US $ 4 per doz. set depending on the sizes of the....
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....ome to the conclusion that the umbrella panels have, in fact, been under-invoiced. This is not to say that there is no scope for inquiry. The Customs Authority can of course conduct the inquiry as proposed in the letter quoted above. 14. The question is pending such enquiry what would be the appropriate security taking into consideration the facts and circumstances of the case. I have already held that Regulation 2 is not a mandatory provision. In my view it does not insist upon the deposit of cash. It is clear that the Customs Authorities had, thus, been accepting PD bond without more as sufficient security pending the inquiry. It was only because of the "verbal instruction" of the Bombay Customs House that they have; taken a different ....
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....that the decision of the Customs Authorities to release the goods against the PD bond only was a wrong decision. The decision of the Supreme Court in Coromondal Fertilizers Limited is also, therefore, not applicable. 17. Considering the facts and circumstances of the case and having heard the learned Advocate for the parties at length, I am of the view that the writ application must be allowed by directing the respondent authorities to release the consignment of umbrella panels in question subject to the petitioner's executing the bond in favour of the Collector of Customs in such manner as may be directed by the authorities concerned. The authorities will indicate the nature of the bond to be executed by the petitioner within a period o....