IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 33810 of 2010(A)
1. M/S.RADHA KRISHNA TRADING COMPANY,
... Petitioner
Vs
1. THE COMMISSIONER OF CUSTOMS,
... Respondent
2. THE ASSISTANT COMMISSIONER OF CUSTOMS,
For Petitioner :SRI.P.RADHAKRISHNAN (1)
For Respondent :SRI.JOHN VARGHESE,SC,CEN.BOARD OF EXCIS
The Hon'ble MR. Justice ANTONY DOMINIC
Dated :22/11/2010
O R D E R
'C.R.'
ANTONY DOMINIC, J.
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W.P.(C) Nos.33810, 34221, 34369
& 34662 of 2010
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Dated this the 22nd day of November, 2010
J U D G M E N T
Petitioners are importers of betel nuts and their
consignments discharged at the Port of Cochin are awaiting
customs clearance. While so, these writ petitions have been
filed seeking a direction to the respondents to provisionally
assess the goods imported by the petitioners applying the
provisions of the Customs Act, 1962 and the Customs
(Provisional Duty Assessment) Regulations, 1963, and to
release the goods.
2. The contention raised by the Standing Counsel for
the respondents is that the respondents are prepared to
assess duty under Section 17 of the Customs Act, 1962, and
that the petitioners are free to appear before the proper officer
of the Customs Department, who will hear the petitioners and
pass orders of assessment and that speaking orders will also
be issued to the petitioners soon thereafter.
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3. Section 18 of the Customs Act provides for
provisional assessment of duty. This provision permits
provisional assessment of duty only when;
(a) where the proper officer is satisfied that
an importer or exporter is unable to produce any
document or furnish any information necessary for
the assessment of duty on the imported goods or
the export goods, as the case may be;
(b) where the proper officer deems it
necessary to subject any imported goods or export
goods to any chemical or other test for the purpose
of assessment of duty thereon;
(c) where the importer or the exporter has
produced all the necessary documents and
furnished full information for the assessment of duty
but the proper officer deems it necessary to make
further enquiry for assessing the duty.
4. As far as provisional assessment under the
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Regulations, 1963 is concerned, Regulation 2 provides the
circumstances justifying provisional assessment. That
Regulation states that where on account of any of the
grounds specified under Section 18(1) of the Customs Act,
the proper officer is unable to make a final assessment of
the duty on the imported goods, he shall make an estimate
of the duty that is most likely to be levied and if the importer
executes a bond for 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 20% of the provisional duty, the proper
officer may direct assessment of duty on provisional basis
and release goods on that basis.
5. In so far as the facts of these cases are
concerned, what is relevant is Section 18(1)(a) of the
Customs Act. A combined reading of this provision of the
Act and the Regulations show that these provisions have
relevance only in a situation where the proper officer is
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: 4 :
unable to complete assessment when he is satisfied that
due to the inability of the importer or exporter to produce
any document or furnish any information necessary for the
assessment of duty on the goods involved. Therefore, the
inability of the proper officer to complete assessment of duty
is what is relevant. In these cases, the Customs
Department have expressed their willingness to complete
the assessment under Section 17 of the Customs Act and
they have no case that they need any document or
information to be produced by the petitioners to complete
assessment or that they are unable to complete assessment
for any of these reasons. On the other hand, the
petitioners contend that, for a meaningful adjudication
before the proper officer and to prove their case regarding
the correctness of the value declared by them, they have to
obtain documents from the port of export and that for that
purpose, they need time. According to the them, till they
obtain such documents and are ready to substantiate their
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case before the proper officer, if the cargo is to remain in
the wharf, demurrage will be levied and to avoid such loss,
provisional assessment of duty should be done. Reference
was made to Rule 12 of the Customs Valuation
(Determination of Value of Imported Goods) Rules, 2007.
6. In my view, Rules do not permit provisional
assessment under Section 18 in a situation where the
importer wants to defer assessment for reasons which are
attributable to the importer. Section 18(1) of the Customs
Act does not make it mandatory on the proper officer to
make a provisional assessment. The use of the word “may”
indicates that it is the discretion of the officer to make
provisional assessment, if there are circumstances justifying
it. What is important to be noted is that this provision
incorporated in the statute is to be invoked in situations
where on account of the circumstances set out in Section 18
of the Act, the proper officer is unable to assess the
customs duty and not where assessment is deferred at the
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request of the importer. Therefore, provisional assessment
as sought for by the petitioners is against the provisions of
the Act and the Regulations of 1963 and hence, cannot be
ordered. However, that does not mean that the proper
officer should not give the petitioners a reasonable
opportunity to produce documents substantiating their case
or that the adjudication shall not be meaningful or that he
can exercise his discretion arbitrarily and all that is to be
stated is that provisional assessment cannot be demanded.
7. In that view of the matter, the prayer sought to
direct the respondents to provisionally assess the cargo of
betel nuts imported by the petitioners cannot be granted.
8. However, I record the submission of the counsel
for the respondents that it will be open to the importers to
appear before the proper officer under the Act, and that
after hearing, an order of assessment will be passed on the
same day itself and that it will be open to the petitioners to
seek release of the cargo on that basis. I also record that
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soon thereafter, speaking orders will be passed by the
respondents, enabling the importers to seek their remedies
against the assessments completed.
Writ petition is disposed of as above.
Sd/-
(ANTONY DOMINIC, JUDGE)
aks
// True Copy //
P.A. To Judge