Law:

Section:

(a) Customs Act (IV of 1969)--- ----S.81--Scope of S.81, Customs Act, 1969. Section 81 of the Customs Act, 1969 provides for, provisional assessment of duty, subsection (1) thereof explains the reasons and the conditions in which a provisional assessment of duty can be made. The proviso to subsection (1) contemplates payment of additional amount as security or furnishing of bank guarantee by the importer or exporter to meet the excess of the final assessment of duty over the provisional assessment, subsection (2) of section 81 provides for a time limit of one year from the date of provisional assessment. Subsection (3) contemplates that on framing of final assessment the amount already paid or guarantees furnished shall be adjusted against the amount payable on the final assessment and the difference between the two shall be paid forthwith by the importer or exporter. Lastly subsection (4) of section 81 is a mere affirmative of proviso to subsection (2) stating that if a final assessment is not completed in the period given in subsection (2) the provisional assessment shall become final. (b) Customs Act (IV of 1969)--- ----S.81(2) & (4)---Provisional assessment of duty---Goods allowed to be cleared or delivered on the basis of final assessment was to be finally assessed within one year of the provisional assessment---If the final assessment was not completed within that period, the provisional assessment shall become final---Both the Department and the assesee, in the present case, had agreed that a period of more than two years since the passing of provisional assessment had already lapsed---Assessment had thus become final under S.81(4) of the Customs Act, 1969 and the Department could not be allowed to take advantage of its own default. (c) Customs Act (IV of 1969)--- ----S. 81(1), proviso---Provisional assessment of duty---Maximum figure at which the interim assessment was made would not automatically mature into final assessment- --Principles elucidated---No final assessment, in the present case, was made within the prescribed period and the taxpayer was not even informed for another year and it was only after expiry of almost two years that he…

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