FINDINGS /DECISION ' The complainant imported two consignments of Non-Genuine Tractor Parts from Belarus on 12-10- 2000. The declared value of these consignments was as follows:--
(i) IGM No, 1681/12-10-2000, Index No, 330 US$ 12422.
(ii) IGM No, 1681/12-10-2000, Index No, 162 US$ 15989.
2. The Customs Authorities did not accept the declared value and loaded it at 100% under section 81 of the Customs Act. The Department sent bill of entry to Special Monitoring Team (SMT) who loaded it at 130%. On objection by the complainant the SMT reduced to 100% loading with the direction that difference of duty/taxes leviable on declared value and the enhanced value be secured by the Department in the shape of pay order till the value was finalized. The goods were thus released after provisional assessment under section 81 on 27-10-2000 (Index No, 162). The provisional assessm ent of goods imported under Index No, 330 was completed on 23-11-2000. Both the consignments were released on the same day. Before the release the complainant paid the duty and taxes on the declared value and for the difference it submitted bank draft as security, which has so far not been encashed. It has been alleged that the Department did not finalize the assessm ent within the specified time provided by section 81(2) of the Customs Act. The complainant therefore by letter, dated 21-2-2002 applied for refund of duty and sales tax paid in terms of subsection (4) of section 81 of the Customs Act. As no refund has been made the complainant has filed this complaint.
3. In response to the notice issued to the Revenue Division, the Collector of Customs and Deputy Collector of Customs Appraisement Group VII have filed two separate replies. The Collector of Customs has stated that two consignments as alleged were imported. The Collectorate finalized the assessm ent of the consignment imported under Index No,330 by determining the value at US$ 43254 on the basis of price list and data available with the Collectorate. It has been pleaded that since the assessm ent was made by the Collectorate outrightly, therefore, the Valuation Department had no jurisdiction to determine the customs value in such cases. In the other consignment imported under Index No,162 the assessment was made provisionally on 7-11-2000 by enhancing the value to the extent to 100% and an amount of Rs,4,82,900 was kept as security under subsection (4) of section 81 of the Customs Act. On receipt of the file on 9-2-2001, the Valuation Department vide letter, dated 19-2-2001 requested the complainant to furnish the import documents which was replied on 29-5-2001 and only printed price list was submitted. It was claimed by the complainant that the Custom House usually give 30% discount on price list with the request that another discount of 50% may also be given to him on account of import of non- genuine Tractor Parts. However, from the record of the Department it. Transpired that non-genuine Belarus Tractor Parts have never been imported from East European countries. The documents filed by the complainant did not indicate that the goods imported wer non-genuine parts.
4. The Deputy Collector Appraisement has taken preliminary objection to the jurisdiction of FTO claiming that the case relates to classification and valuation of goods. It has further been stated that the complainant's goods were cleared in October, 2000 and, therefore, the complaint is time- barred. It was admitted that the complainant had imported two consignments of non-genuine Auto parts of Eat European origin for Belarus Tractors at the declared value of US $ 15989 and US$ 12422 respectively. The first consignment was assessed at 100% loading on declared value on the basis of difference between import values of genuine and non-genuine parts of the same origin meant for Belarus Tractors, which ranged 174% to 282%. The other consignment was also assessed on the same basis at US$37406 against the declared value of US$ 12422 as per group practice. In the then prevailing instructions the cases were referred to the SMT fOr scrutiny to enable 130% in respect of first consignment. While the value of second consignment was enhanced at US$ 43254 against the Customs ascertained value of US$ 37406. On protest by the importer the SMT revised the assessm ent of the first consignment and approved the customs appraised value i,e, 100% loading. The importer requested the Department for provisional assessment against 100% loading on declared value. The request was acceded to and the differential amount of duties/taxes was secured in the shape of pay order and the case was referred to the Valuation Department. In the case of second consignment, the duty/taxes were paid by the complainant in cash on the value of US$ 43254 as was approved by the SMT. The cases were referred to the Valuation Department on 6-2-2001 but no advice was received within one year nor any claim for refund was lodged by the complainant within the aforesaid period. The assessment made thus became final in terms of section 81(4) of the Customs Act. It has been pleaded that letter, dated 21-12-2002 referred by the complainant is not available on the relevant file It has also been stated that even otherwise the claim for refund is time-barred under section 33 of the Customs Act as well as on grounds that the complainant could not protest against the assessable value given by the SMT nor approached the said authority for revision of such value.
5. From the reply submitted by Deputy Collector (Appraisement) it is clear that assessment in both the consignments was made provisionally on the basis of 100% loading on the declared value. In one consignment the complainant paid the duty on the declared value and for the differential pay order was submitted as security. In the other consignment the complainant paid the duty on declared value and differential in cash. As the assessment was provisional the amount representing differential between the duty on declared value and loaded value was paid as security. Considering the provisions of section 81 if the final assessment is not made within one year the provisional duty on declared value shall become final and the amount of security has to be refunded forthwith. Against similar finding in another case the C.B.R. Filed representation before the President who was pleased to reject it with the following observations:-- "Section 81 of the Customs Act, 1969, in pertinent, provides: (1) Where it is not possible immediately to assess the customs duty that may he payable on any imported goods for the reason the goods require chemical or other test or a further enquiry for purposes of assessment or that all the documents or complete document or full information pertaining to those goods have not been furnished an officer of the Customs may order that the duty payable on such goods be assessed provisionally provided that the importer/exporter pays such additional amount as security or furnishes such guarantee of a scheduled bank for the payment thereof as the said officer deems sufficient to meet the excess of the final assessment of the duty over the, previsional assessment.
(2) Where any goods are allowed to clear on the basis of provisional assessment the amount of duty actually payable on those goods shall be finally assessed within one year of the date of provisional assessm ent. (3) On completion of such (final' assessment) the appropriate officer shall order that the amount already paid or guaranteed be adjusted against the amount payable on the basis of final assessm ent and the difference of the two shall be paid.
' The Customs are of the view that for the purpose of subsection (4) ibid provisional assessment shall include the additional amount which the importer/exporter pays or in respect of which furnish guarantee of a scheduled bank under the proviso to subsection (1). The view of the Customs is not supported by the language of the section. The additional amount is not received. As duty. It is only security to meet' the excess of the final assessment of duty over the provisional assessment. The provisional assessm ent in section 81 ibid refers to the legal effect, and not the quantification, of the assessm ent, simply means that the duty paid by the importer/exporter on the declared value shall in effect not be final but provisional and subject to re-examination. Section 81 does not empower the appropriate officer to assess duty tentatively. 'The opinion of the FTO in this regard is 'sound.
Accordingly, the President has been pleased to reject the representation of the Revenue Division."
6. In view of these observations and discussion the, contentions of the respondent have no force. As regards jurisdiction, it may be pointed out that the matter does not relate to valuation and classification. It only relates to exercise of power under section 81 of Customs Act, which provides a certain procedure before a provisional assessment becomes final. This procedure was not adopted by the Department and they only relied on technical ground that with lapse of time the provisional assessm ent becomes final. Furthermore, no appeal is provided against the impugned order/action. The provisional assessment was made only on the declared value whereas the security had been obtained for the differential value which could not be part of the final/provisional assessm ent. It is a clear case of predetermined mind, inefficiency and ineptitude in performance of duty. Therefore, maladministration is established and the FTO has jurisdiction to investigate into the matter.
' As regards objection that the claim is barred under section 33 of the Customs Act the same is misconceived. Section 33 speaks of refund of any customs duties or charges claimed to have been paid due to error or misconstruction. In the present case the claimant had not paid duty on the loaded value but had furnished pay order and paid cash as security therefore the case is not covered by the section 33 of the Customs Act.
7. It is recommended that:--
(i) The pay order submitted by the complainant be returned to it.
(ii) Rs, 4,82,900 kept as security in respect of consignment imported under B/E. IGM No, 1681/2002, dated 12-10-2000, Index No, 162 be refunded.
(iii) Compliance be reported within 30 days.