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High Court Of Calcutta
Mukul Gopal Mukherji, Ruma Pal
COLLECTOR OF CUSTOMS - Appellant
Versus
KUSSUM MARODIA - Respondent
Appeal . . . Of 1993
Decided On : 09/12/1994
CUSTOMS ACT, 1962 - SECTION 17, 18, 2(33), 47, 111(M), 112(A) - FACTUAL ERROR IN PROVISIONAL ASSESSMENT - FINAL ASSESSMENT NOT MADE - RELEASE OF GOODS - COURT'S DISCRETION TO GRANT AD INTERIM RELIEF - BALANCE OF CONVENIENCE AND PUBLIC INTEREST.
Fact of the Case:
The writ petitioner imported goods from China via Singapore. The goods were provisionally assessed to duty and the petitioner paid the amount and executed a bond. However, the goods were not released by the Customs Authorities. The petitioner filed a writ petition challenging the refusal to clear the goods. The Single Judge directed the release of the goods on an undertaking to pay any differential duty at the final hearing.
Finding of the Court:
The Division Bench upheld the order of the Single Judge, directing the release of the goods subject to the execution of a bond for the excess duty claimed in the show cause notice. However, one of the Judges expressed reservations about the release of goods merely on the basis of an undertaking and suggested that the release should be subject to the furnishing of a bank guarantee covering the sum of Rs. 22,90,001/-.
Issues: 1. Whether the Single Judge erred in passing the order directing the release of the goods? 2. Whether the release of the goods should be subject to the furnishing of a bank guarantee?
Ratio Decidendi: 1. The Single Judge did not err in passing the order directing the release of the goods. The provisional assessment was made without scrutinizing the goods and there was no final assessment under Section 17 of the Act. The right of the Customs Authorities to refuse clearance under Section 47 is discretionary but the discretion is statutorily regulated. The proper officer must be satisfied as to the identity of the goods and that they correspond to the description given. There is no dispute that this is so in this case. The goods are not prohibited goods and the import duty has been paid. Therefore, clearance under Section 47 cannot be refused. 2. The release of the goods should not be subject to the furnishing of a bank guarantee. The attempted evasion of duty is to the extent of Rs. 22,90,001/-. The writ petitioners should be given an opportunity to secure the release of the goods on furnishing an appropriate bank guarantee covering the sum of Rs. 22,90,001/-. If they are unable to do so within a fortnight, they have to wait till the final assessment is made, which the authorities are directed to complete within a period of one month from the date of the judgment.
Final Decision: The appeal is disposed of by affirming the order under appeal and directing the release of the goods subject to the undertaking given in the court below and subject to the execution of a bond in the sum alleged to be due on account of excess duty in the show cause notice. The clearance must be allowed within a week from the date of execution of such bond.
( 1 ) THE order impugned in these proceedings was passed on 23rd November, 1993 directly the respondents to forthwith release 400 pieces of "zwz" bearings of Chinese origin contained in 92 cases, (hereinafter referred to as the goods) in respect of which provisional duty had already been collected by the Customs Authorities from the writ petitioner.
( 2 ) THE writ petitioner imported the goods the country of origin of which was China from Singapore. The ship carrying the goods arrived at Calcutta Port in September, 1993. A Bill of Entry was filed for home consumption. The goods were provisionally assessed to duty on 7th October, 1993 on the basis of the declared value plus 20 per cent additional provisional duty on the declared value amounting to a sum of Rs. 3,17,999/ -. The petitioner paid the amount as provisionally assessed and also executed a bond for Rs. 1,89,285. 00 in terms of the directions of the Assistant Collector of Customs, Calcutta. This was done also in October, 1993. The payment of provisional duty was accepted by the Customs Authorities. But the goods were not released by the Customs.
( 3 ) BEING aggrieved by the refusal of the Customs Authorities to release the goods the writ petitioner moved a writ application under Article 226 challenging' the refusal to clear the goods. An interim order was passed on 23-11-1993 by A. N. Ray, J. directing release of the goods.
( 4 ) THE Learned Judge also recorded the undertaking on behalf of the writ petitioners to pay any differential duty in case same appears to be payable at the final hearing. The goods were also directed to be released within a week.
( 5 ) THE respondents did not release the goods. An application for contempt was moved by the writ petitioner before. A. N. Ray, J. A Rule was issued against the respondents. The respondents then preferred this appeal from the order dated 23rd November, 1993 immediately thereafter. An interim order was granted staying the operation of the order appealed from. The interim order is still continuing.
( 6 ) IN the meantime a show cause notice was issued by the Customs Authorities under Section 124 of the Customs Act, 1962 (hereinafter referred to as the Act) in which it has been said that upon further enquiry being there it was prima facie found that the goods had been undervalued to the extent of Rs. 16,57,001. 70 and there was an attempt for duty evasion amounting to Rs. 22,90,001 / -. The writ petitioner was therefore, called upon to show cause as to why the goods should not be confiscated under Section 111 (m) of the Act and why penal action should not be taken against them under Section 112 (a) of the Act and why they should not pay extra duty of Rs. 22,90,001/- against the Bills of Entry in question. The show cause notice is dated 22-11-1993.
( 7 ) THE appellant has submitted that the order was incorrectly passed at the ad interim stage without considering the fact that the provisional assessment was made without scrutinising the goods and that the discrepancy between the price of the goods as declared and price of the goods as ascertained upon enquiry was found subsequently. It is further submitted that the provisional assessment can be revised under Section 17 (4) of the Act. It is also submitted that the proper officer had an unfettered discretion to withhold the clearance of the goods under Section 47 of the Act. Finally it is submitted that the release of the goods should have been granted at the ad interim stage without the filing of affidavits.
( 8 ) THE last-point is taken up for consideration first. The Courts have consistently held that in certain circumstances ad interim order can be granted in ordinary Civil Proceedings even if it amounts to decreeing the suit [see : for example "thompson v. Park -1944 (2) All. E. R. 477; Woodford and Anr. v. Smith and Anr. : 1970 (1) All E. R. 1091; New Chhatabar Coal Co. Ltd. v. J. G. Kumarmangalam : Indian Cable Co. Ltd. v. Sumitra Chakraborty : and O
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