IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC MONDAY, THE 22ND NOVEMBER 2010 / 1ST AGRAHAYANA 1932 WP(C).No. 33810 of 2010(A) ---------------------------------------- PETITIONER(S): ---------------------- M/S.RADHA KRISHNA TRADING COMPANY, REPRESENTED BY ITS PROPRIETOR VIJAYAKUMAR KISHANCHAND SAJANANI, SAMBHAJI KASAR ROAD, MASKASATH ITWARI, NAGPUR, MAHARASHTRA-440 002. BY ADV. SRI.P.RADHAKRISHNAN, SRI.MADHU RADHAKRISHNAN. RESPONDENT(S): -------------------------- 1. THE COMMISSIONER OF CUSTOMS, CUSTOMS HOUSE, WELLINGTON ISLAND, KOCHI, PIN-682 009. 2. THE ASSISTANT COMMISSIONER OF CUSTOMS, CUSTOMS HOUSE, KOCHI, PIN-682 009. R1 & R2 BY ADV. SRI.JOHN VARGHESE,SC, CEN. BOARD OF EXCISE. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22/11/2010, ALONG WITH WPC NO. 34221 OF 2010, WPC NO. 34369 OF 2010 AND WP(C) NO. 34662 OF 2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs 'C.R.' ANTONY DOMINIC, J. ``````````````````````````````````````````````````````` W.P.(C) Nos.33810, 34221, 34369 & 34662 of 2010 ``````````````````````````````````````````````````````` 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. W.P.(C) No.33810/10 & connected cases : 2 : 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 W.P.(C) No.33810/10 & connected cases : 3 : 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 W.P.(C) No.33810/10 & connected cases : 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 W.P.(C) No.33810/10 & connected cases : 5 : 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 W.P.(C) No.33810/10 & connected cases : 6 : 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 W.P.(C) No.33810/10 & connected cases : 7 : 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