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PJ/Case Laws/2012-13/1164

Whether an assessee is liable to pay 100% of duty in case of provisional removal of goods or is liable to pay 20% as the provisional duty as per regulation 2 of the customs (provisional duty assessment) Regulations, 1963.
CASE:  BHAIYA FIBERS LTD. V/S ADDL. DIR. GENERAL OF REVENUE INTELLIGENCE
CITATION:  2012 (281) E.L.T 396 (DELHI)
ISSUE:-   Whether an assessee is liable to pay 100% of duty in case of provisional removal of goods or is liable to pay 20% as the provisional duty as per regulation 2 of the customs (provisional duty assessment) Regulations, 1963.
BRIEF FACTS: - The petitioner had imported PVC laminated flexible films, gummed vinyl, printable vinyl, PVC foam board from some parties in china. The goods were imported between January and September, 2007 through the ports at Kolkata, Mumbai and Tuticorin. In all, the petitioner had filled 16 bills of entry in respect of the imported goods. There is no dispute that in respect of 4 bills of entry imported through Kolkata port, the goods have been cleared on a provisional assessment. The Petitioner has furnished bank guarantees and has cleared those goods. Insofar as the balance 12 bills of entries are concerned, one of them relates to Tuticorin, one to Kolkata and the remaining 10 to Mumbai. The Petitioner seeks the release of the goods covered by these bills of entry on a provisional assessment basis and is of view that they are liable to pay duty equal to 20% as the provisional duty as per regulation 2 of the customs (provisional duty assessment) Regulations, 1963, since the Directorate of Revenue Intelligence (DRI) has some objection with regard to valuation of these goods. The revenue or the respondent is of view that the petitioner should pay 100% of duty even in case of provisional removal of goods from the factory.  
APPELLANTS CONTENTION:- Learned counsel for the Petitioner has drawn our attention to the Customs (Provisional Duty Assessment) Regulations, 1963. Regulation 2 thereof reads as follows: - "REGULATION 2. Conditions for allowing provisional assessment:-
 Where the proper officer on account of any of the grounds specified in sub-section (I) 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 amount equal to the difference between the duty that may be finally assessed and the provisional duty and deposits with the proper officer such sum not exceeding twenty per cent of the provisional duty, as the proper officer may direct, the proper officer may assess the duty on the goods provisionally at an amount equal to the provisional duty."  A reading of the aforesaid Regulation shows that where there is a dispute with regard to the valuation of imported goods, the proper officer under the Customs Act, 1962 may release those goods on an importer/exporter executing a proper bond and depositing with the proper officer an amount not exceeding 20% of the difference in duty as claimed by the importer/exporter and the provisional duty as assessed by the proper officer.
RESPONDENTS CONTENTION:-  It is contended by learned Central Government Standing Counsel appearing on behalf of the Respondent that the goods have been grossly undervalued by die Petitioner and during investigation it has transpired that the goods imported by the Petitioner, which are lying seized under superdarinama ought to be valued at US$ 1640/PMT whereas the Petitioner has declared their value between US$ 870/PMT to US$ 1000/PMT. They demanded that petitioner should deposit 100% of the duty even in case of provisional removal of goods.
REASONING OF JUDGEMENT: - It was noticed by central government standing council that there was difference between provisional release of goods and provisional assessment of goods but both are same in substance because provisional removal of goods can not be done without provisional assessment of goods. Thus as per regulation 2 of the customs (provisional duty assessment) Regulations, 1963 petitioner was liable to deposit 20% of the duty.
DECISION:- Respondent was directed to provisionally clear the goods forming the subject matter of 12 bills of entry have been mentioned in the petition upon the petitioner to  depositing an amount equal to 20% of the difference in the provisional duty as sought to be assessed by the Respondent and on the basis of the value prima facie determined by the respondent, that is US$ 1640/PMT and the value declared by the petitioner, that is between US$ 870/PMT AND US$ 1000/PMT and the petitioner was also liable to execute a bond to pay the balance of the differential duty as and when it is finally assessed. Writ petition disposed off.
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PRADEEP JAIN, F.C.A.

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