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2002 Supreme(Mad) 1184
High Court of Judicature at Madras
THE HONOURABLE MRS. JUSTICE PRABHA SRIDEVAN
O.Mohammed Raffi - Appellant
Versus
The Commissioner of Customs (Sea) and Others - Respondents
W.P.Nos.33003 and 33381 of 2002 and W.P.M.P.Nos.49027, 49468 and 49469 of 2002
Decided On : 11 October 2002
Section 18 of the Customs Act allows for provisional assessment of duty, and prolonged detention of goods is not in anyone's interest.
Headnote:
Customs Duty - Import of VCD Player Components - Section 18 of the Customs Act
Fact of the Case:
The petitioners imported VCD player components, which when assembled constituted complete VCD players. One petitioner paid the duty, while the other did not. The Customs Authority refused provisional assessment and seized the goods, alleging mis-declaration and evasion of duty.
Finding of the Court:
The court directed the authorities to complete physical verification within two weeks, provisionally assess the duty within one week thereafter, and release the goods in accordance with the law.
Issues: Provisional assessment of duty, refusal to release goods, alleged mis-declaration and evasion of duty
Ratio Decidendi: Section 18 of the Customs Act allows for provisional assessment of duty, and prolonged detention of goods is not in anyone's interest. The authority must complete necessary verification and provisionally assess the duty within a specified timeframe.
Final Decision: The court directed the authorities to complete physical verification, provisionally assess the duty, and release the goods within specific timeframes.
Both the writ petitions were heard together since it was represented that they complement each other literally and figuratively. Each of the petitioners had imported the components of VCD players. But it was found that the spare parts imported by one when assembled with the spare parts imported by the other resulted in a Samsung VCD player what is called complete in a knocked-down condition. Therefore, the goods imported by the petitioners when assembled constitute 3600 pieces of Samsung 3CD/VCD/MP3 players complete in a knocked down condition. The petitioner in W.P.No.33381 of 2002 has paid the admitted duty. The petitioner in W.P.No.33003 of 2002 has not paid the duty.
2. The question is whether the Customs Authority can refuse to provisionally assess duty or to club the two imports to arrive at a conclusion that there has been mis-declaration or whether they are allowed to seize the goods. According to the learned Senior Counsel for the petitioners, the respondents are bound to provisionally assess the goods and allow the importer to clear the same in accordance with the provisions of Section 18 of the Customs Act. It was submitted that though the petitioners were related, their business was different, the invoice showed different places of purchase and therefore, the import cannot be 'clubbed' together. It was also submitted that the goods were "perishable or hazardous goods" as per the Schedule to the Notification under Section 110 of the Customs Act.
3. The learned Senior Counsel relied on two judgments:
(1) Union of India Vs. Tarachand Gupta (1983 ELT 1456 (SC)) and (2) Collector of Customs Vs. Ganesh Raja Organisation (2000 (122) ELT 19(Mad).
4. In the Supreme Court judgment, the importer had imported goods which arrived in two consignments by two different ships and on examination the Customs Authority found that they constituted 51 sets of "Rixe Mopeds complete in a knocked down condition". The following paragraph was relied on by the learned Senior Counsel to support his case,
"Therefore, the mere fact, that the goods imported by them were so complete that when put together would make them motor cycles and scooters in C.K.D. Condition, would not amount to a breach of the licence or of Entry 295. Were that to be so, the position would be anamolous as aptly described by the High Court. Suppose that an importer were to import equal number of various parts from different countries under different indents and at different times, and the goods were to reach here in different consignments and on different dates instead of two consignments from the same country as in the present case. If the contention urged before us were to be correct, the Collector can treat them together and say that they would constitute motor cycles and scooters in C.K.D. condition. Such an approach would mean that there is in Entry 295 a limitation against importation of all parts and accessories of motor cycles and scooters in C.K.D. condition. Surely, such a meaning has not to be given to Entry 295 unless there is in it or in the licence a condition that a licensee is not to import parts in such a fashion that his consignments, different though they may be, when put together would make motor cycles and scooters in C.K.D. condition. ...
24. The respondents' licence admittedly authorised them to import goods covered by entry 295. They could, therefore, legitimately import, on the strength of that licence, all and several kinds of parts and accessories of motor cycles and scooters. The only question, therefore, before the Collector was whether the respondents' licence covered the goods imported by them, i.e., whether the goods were parts and accessories. If they were, the imports were legitimate and no question of their being not covered by the licence or the respondents having committed breach of Section 3 of the Imports and Exports (Control) Act or Section 167(8) of the Sea Customs Act could possibly arise. What the Collector, however, did w
