NEERA GUPTA v. SUKUMAR SHANKAR, COLLR. OF CUSTOMS — 1995 DIGILAW 277 (CAL)

RUMA PAL, J. ( 1 ) THIS application for contempt had been earlier disposed of by an order dated 10-2-1995. The order was vacated on the ground that the basis of the order namely, identity between the petitioner's goods and those of two other importers had been admitted by the respondent authorities, when there was, in fact, no such admission. At the instance of the respondents the order was recalled and the application for contempt is being disposed of for the second time. ( 2 ) THE petitioner had imported Koyo Brand Bearings shipped from Singapore. The goods arrived in April, 1994 at Calcutta. In the same month clearance was sought by filing bills of entry. Because of the failure of the respondents to even provisionally assess the goods and to release them, a writ application was moved by the petitioner. The matter was moved on notice and an order was passed by this Hon'ble Court on 27th September, 1994. It is this order which is the subject matter of the contempt proceeding. The order insofar as is irrelevant reads as follows :"this application is being moved upon notice to the respondents. The respondent authorities state that they are willing to provisionally assess the goods by 15-10-1994 and to release the goods on the basis of such provisional assessment in terms of the order of the Supreme Court passed in Writ Petition No. 210 of 1993 (Shri Pravin E. Trivedi v. Union of India and Ors.)Accordingly, this application is disposed of by directing the respondent authorities to make a provisional assessment by 15-10-1994 and to release the goods within a period of 48 hours upon compliance with the terms of the provisional assessment including execution of a bond and furnishing of such other security as may be directed. If such provisional assessment is not made within the period specified above, then immediately after expiry of the period the goods shall be released upon payment by the petitioner of the Customs Duty on the basis of the valuation in the Bill of Entry and furnishment of a Bond for payment of Duty on a value 50% in excess of the declared value. It will be open to the authority to satisfy themselves that the goods imported are of the description claimed by the petitioner. It will be open to the authority to satisfy themselves that the goods imported are of the description claimed by the petitioner. As this order disposes of the writ petition before filing of affidavits, it is recorded that the allegations contained in the petition are not admitted by the respondents". ( 3 ) THE proceeding before the Supreme Court referred to in the order also related to the import of Koyo Brand Ball Bearing. Upon a similar complaint by the importer an order was passed by the Supreme Court in the following terms :""there will be an interim direction to the respondents to make provisional assessment within three weeks of the receipt of a copy of this order and to release the goods upon compliance with its terms, including the execution of the bond. If such a provisional assessment is not made, then immediately after the expiry of two weeks from the date of service of this order, the goods shall be released upon payment by the petitioner, or the customs duty on the basis of the valuation in the Bill of Entry and furnishment of a Bond for payment of duty on a value 50% in excess of the declared value. " ( 4 ) THE date of Supreme Court order is 25-5-1993. The consignment which was the subject matter of the Supreme Court order was provisonally assessed on the declared value with revenue deposit of 20%. In addition the importer was also required to fill in a P. D. Bond. ( 5 ) IT was understood by the respondent authorities that the Supreme Court order was to be implemented in that fashion and a letter dated 18-5-1993 was issued by the Collector of Customs at Calcutta to the Asstt. Collector of Customs, Madras in the following terms :"please refer to you letter No. Nil dated Nil on the above subject in regard to the interim order in Supreme Court W. P. No. 810 of 1992. The Custom House is implementing such interim orders (using the 1st option mentioned therein) by provisionally assessing the Bill of Entry on declared value with Revenue Department of 20%. The importers are also made to execute the requisite P. D. Bond. The Custom House is implementing such interim orders (using the 1st option mentioned therein) by provisionally assessing the Bill of Entry on declared value with Revenue Department of 20%. The importers are also made to execute the requisite P. D. Bond. " ( 6 ) THE respondents, however, in the petitioner's case provisionally assessed the petitioner subject to the condition that the petitioner would submit not only a P. D. Bond for the assessable value but also by furnishing a bank guarantee for Rs. 12,02,536/ -. This sum represented 100% of the difference of duty between price as declared and the price as calculated by the respondent authorities on the basis of a price list available with the department. Although a copy of the letter dated 10th October, 1994 was made available to the petitioner's clearing agent, the bills of entry were not returned till several days subsequent so that, according to the petitioner, the clearance could not be made in terms of the order within a period of 48 hours. ( 7 ) ACCORDING to the petitioner the respondents have committed contempt of the order dated 27th September, 1994. There was a direct violation of the order as well as an indirect violation. As far as the direct violation is concerned, the petitioner has said that it is the failure to release the document necessary for obtaining release of the goods within a period of 48 hours was contumacious. As far as the indirect violation is concerned, it is said that the order dated 27th September, 1994 had been passed on the concession made by the Customs Authorities taking into consideration the letter of the Assistant Collector of Customs, quoted above. It is said that the Customs Authorities were, therefore, well aware of the manner in which the order of the Supreme Court was being implemented. It is also stated that on the basis of the Customs Authorities reading of the Supreme Court order, several consignments had been allowed to be imported. In fact, in the matter of the two importers, whose cases have been referred to when the application for contempt was being disposed of for the first time, the Customs Authorities had followed the identical formula even though goods were not identical. In fact, in the matter of the two importers, whose cases have been referred to when the application for contempt was being disposed of for the first time, the Customs Authorities had followed the identical formula even though goods were not identical. ( 8 ) IT may be noted at this stage that the petitioner's Counsel submitted that this was what had been argued by the Counsel but the Court assumed that the goods also were identical. ( 9 ) BE that as it may apart from the relief which was being granted even if the consignment was not identical on the basis of the Supreme Court's order, the petitioners have also relied upon several Bills of Entry as well as correspondences in respect of the identical brand which showed that the Customs Authorities, Bombay had subsequent to the petitioners consignment in October, 1994 and February 1995 allowed clearance after provisional assessment by demanding P. D. Bond and 20% cash deposit. The respondent authorities have objected to the reliance on these documents on the ground that the documents were not affidavits. ( 10 ) ON the last occasion when the matter was taken up for hearing an adjournment was sought by the Customs Authorities. The petitioner had then prayed for leave to file to disclose the documents. The said leave was granted. Accordingly under cover of a letter dated 12th July, 1995 i. e. about a fortnight ago the petitioner's Advocate forwarded copies of the documents to the respondents and the respondents received the same without any demur. In the covering letter it has been clearly stated that the document would be relied upon at the time of hearing. In addition, documents now referred to form part of were already enclosures to letter dated 20th April, 1995 written by the petitioner's Advocate to the Collector of Customs. In the letter dated 10th October, 1994 written by the petitioner's clearing agent recording the provisional assessment made pursuant to the order of this Court, the Assistant Collector of Customs has said :"different letters received from your clients from time to time after 27th September, 1994 have been placed on record and the same will be considered at the time of final assessment. " ( 11 ) THE Customs Authorities did not raise any other dispute regarding the documents, either that they were incorrect or that they had not been enclosed with the letter addressed to them. There was ample time for the respondents to have checked the documents and instructed their Counsel in the matter. Therefore, I am of the view that the objection raised by the respondents to the reliance by the petitioner on the documents cannot be sustained. ( 12 ) THE petitioners have finally submitted that the order dated 10th February, 1995 was correctly passed as the respondent authorities were, in fact, continuing to allow import of Koyo Brand Ball Bearing by provisionally assessing them and demanding 20 or 30% payment of cash deposit together with P. D. Bond. The petitioner has also commented on the fact that although the goods had arrived in April last year they had neither been allowed to be kept in a warehouse under Section 49 of the Customs Act nor was any final assessment made till date nor any show cause notice was issued. ( 13 ) THE respondents have submitted firstly that there was no contempt as the provisional assessment had been made before the time specified in the order. Copy of the letter dated 10th October, 1994 had been made over to the petitioner's shipping agent and Advocate. It is stated that on 24th October, 1994 the petitioner objected to the security aspect as determined by the Customs Authorities. Therefore, it is submitted that non-return of the Bill of Entry immediately was immaterial as the petitioners would not have asked for release in any case. Furthermore, it is submitted that the bill of entry could not be handed over immediately because of Durgapuja which took place subsequent to 10-10-1994. ( 14 ) ON the question of implementation it is said that the Supreme Court's order had not been exactly followed by the Court in the order dated 27th September, 1994 but that the Court had added on a further phrase which showed that the Customs Authorities were at liberty to ask for any other or further form of security. It is stated that this "addition" was made because of the Customs Provisional Duty Assessment Regulations, 1963, particularly Clauses 2 and 3. It is stated that this "addition" was made because of the Customs Provisional Duty Assessment Regulations, 1963, particularly Clauses 2 and 3. It is also stated that it had been submitted by the Customs Authorities to the Court at that time that the Customs Authorities had a price list according to which there was a prima facie case that the petitioner's goods were under invoiced. It is also stated that investigation was held and a report has been filed. A copy of the report was handed over to Court. Thirdly, it is stated that in a similar matter this Court had passed an order directing the importer to deposit 100% in cash. It is submitted that in any event that the Customs Authorities had understood the Court's order to be as contended and therefore there was no question of contempt. Finally, the respondents have tendered unconditional apology for any contempt which may have been committed by them. ( 15 ) THE only consideration now before the Court is whether the order dated 27th September, 1994 has been violated. Whether the order should have been passed or not does not fall within the scope of this application. No appeal was preferred from the order. ( 16 ) IN my view, the respondents must be held to have violated the order both directly and indirectly. They could not have anticipated that the petitioner would not have complied with the conditions imposed by the order of provisional assessment. The explanation given for not handing over the Bills of Entry along with the order of provisional assessment for the purpose of the petitioner obtaining release of the goods in terms of the order is unacceptable. ( 17 ) THE order dated 27th September, 1994 did not, in fact, state anything new over and above what had been stated by the Supreme Court in the Writ Petition No. 210 of 1993 (Shri Pravin F. Trivedi v. Union of India and Ors. ). The order was passed on the basis of the concession made by the respondents and the paragraph subsequent to the recording of such concession merely sought to exactly follow the order of the Supreme Court. It is apparent from the use of the word, 'accordingly. ' ( 18 ) RELIANCE on the Customs (Provisional Duty Assessment) Regulations, 1963 by the respondents, in my view, does not assist the respondents. It is apparent from the use of the word, 'accordingly. ' ( 18 ) RELIANCE on the Customs (Provisional Duty Assessment) Regulations, 1963 by the respondents, in my view, does not assist the respondents. Clauses 2 and 4 which have been cited by the respondents in respect of their contention that they could ask for 100% security by way of Bank Guarantee read as follows :-"2. Conditions for allowing provisional assessment - Where the proper officer on account of any of the grounds specified in Sub-section (1) 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. ""4. Surety or security of the bond - The proper officer may require that the bond to be executed under these regulations may be with such surety or security, or both, as he deems fit. "it does not appear from the order dated 27th September, 1994 that the Court had at all considered any other provision excepting the order of the Supreme Court. In any event, it appears that the respondents have provisionally assessed other importers of identical goods on the basis of Clause 2 of the Customs (Provisional Duty Assessment) Regulations, 1963, that is, upon furnishing of prescribed bond together with depositing of 20% of the provisional duty in cash. The fact that the respondents had been permitting such importers to release their identical goods on such basis militates against any submission that the Customs Authorities had understood this order as giving them liberty to impose what in effect would be a deposit of 100% duty in cash - the only difference being that the deposit would be made with a Bank instead of with the Customs Authorities. ( 19 ) REFERENCE to the Investigation Report is of no avail. Correctness of the order is not in issue. Furthermore, no show cause notice has been issued on the basis of the report to the petitioner till date. ( 20 ) FROM the documents, disclosed by the petitioner, it appears that as late as on 20th March, 1995 the Customs Authorities in Bombay had provisionally assessed identical goods imposing 20% Revenue Deposit together with P. D. Bond, as stated in the order dated 10th February, 1995 (which has since been recalled ). The respondents cannot treat the petitioner on a different footing from other importers who had imported identical goods. ( 21 ) THE submission of the respondents that they had understood the order differently is in the circumstances difficult to accept. However, giving them the benefit of doubt and accepting the apology as tendered, the Court does not proceed to punish the respondents in contempt. ( 22 ) THIS application is disposed of by directing the respondent- Authorities to release the goods in question to the petitioner within 48 hours from the petitioner executing P. D. Bond and making deposit of 30% of the Revenue. The petitioner will also be entitled to the costs of this application assessed at 100 G. Ms. Stay prayed for on behalf of the respondents is refused.