Guidelines regarding Provisional Assessment under section 18 of the Custom Act, 1962

F.No: 465/01/2016–Cus V
Govt. of India
Ministry of Finance
Dept. of Revenue
Central Board of Excise & Customs

Circular No. 38/2016-Customs
Dated 22nd August 2016

To,
All Principal Chief Commissioners of Customs / Customs & Central Excise
All Chief Commissioners of Customs,
All Chief Commissioners of Customs & Central Excise,
All Directorate-Generals, Chief Departmental Representative,
All Principal Commissioners of Customs,
All Principal Commissioners of Customs & Central Excise,
All Commissioners of Customs,
All Commissioners of Customs & Central & Excise

Subject:-Guidelines regarding Provisional Assessment under section 18 of the Customs Act, 1962

The Customs (Provisional Duty Assessment) Regulations 2011 issued under notification no. 81/2011 – Customs (NT) dated 25.11.2011 were reviewed in view of references from the field formations regarding guidelines on the implementation of Regulation 2(2) and Regulation 4.

2. Regulations 2(2), 3 and 4 require three elements – namely, (a) deposit of 20% of the differential duty between “provisional duty” and duty to be “finally assessed or re-assessed”; (b) execution of a bond; and (c) surety or security or both, as deemed fit,

2.1 Section 18 of the Customs Act, 1962 defines the cases where provisional assessment may be resorted, as under:

– (1) Notwithstanding anything contained in this Act but without prejudice to the provisions of section 46,-

(a) where the importer or exporter is unable to make self-assessment under sub-section (1) of section 17 and makes a request in writing to the proper officer for assessment; or

(b) where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test; or

(c) where the importer or exporter has produced all the necessary documents and furnished full information but the proper officer deems it necessary to make further enquiry; or

(d) where necessary documents have not been produced or information has not been furnished and the proper officer deems it necessary to make further enquiry,

2.2 Further, Section 18 goes on to state how a provisional assessment is to be carried out:

“the proper officer may direct that the duty leviable on such goods be assessed provisionally if the importer or the exporter, as the case may be, furnishes such security as the proper officer deems fit for the payment of the deficiency, if any, between the duty as may be finally assessed and the duty provisionally assessed.”

2.3 Thus, the provisions of section 18 of the Customs Act, 1962, require that in cases where goods are to be provisionally assessed:

(a) the importer binds himself for the payment of deficiency, if any, between the duty as may be finally assessed and the duty provisionally assessed; and

(b) furnishes such security as the proper officer deems fit for the payment of the deficiency.

Please refer to the attached file for details