Endorsement on bill of entry amount to raising demand under customs law and not mere a provisional assessment

Brief of the case:

The Hon’ble Supreme Court in the case of M/s Swastika Enterprise held that the endorsement on the bill of entry to pay additional customs duty is a demand and not mere a provisional assessment. Thus, the duty payable due to such endorsement can be settled as settlement of demand under indirect taxes demand settlement scheme.

Facts of the case:

• The assessee imported old ships and filed a bill entry for clearance of the same form the port of import.In the bill of entry, it claimed exemption from the payment of ‘additional customs duty’ under an exemption notification. Custom authorities found assessee not eligible for the exemption and accordingly, returned the bill of entry by making an endorsement to pay additional customs duty.
• The assessee challenged the said endorsement by way of writ petition before the Calcutta HC.
• During the pendency of writ petition, assessee applied to settle it aforesaid dues of additional customs under the indirect tax settlement scheme by making declaration under section 88 of the Central Excise Act, 1944.
• The assessee’s application was rejected by the department on the ground that since no notice of demand has been issued, assessee is not eligible for the scheme.
• The Divisional Bench of Calcutta HC dismissed the writ petition of assessee on this issue on the ground that since no show cause notice has been issued, there cannot be any adjudication and without adjudication no notice of demand can be issued.
  

Contention of Assessee: