Principal Commissioner of Customs Vs M. D. Overseas Limited (CESTAT Delhi)
In this case Commissioner of Customs (Appeals) had set aside the Assessment Order (AO) passed on the three Bills of Entry (BoE) with a further direction for re-assessment of the rate of Basic Customs Duty applicable on the given BoE to the Department.
M/s M. D. Overseas Limited (Respondent) after importing four consignments and filing the four BoE’s, only one BoE was generated and three BoE’s could not be processed on the ground of technical glitch in their system according to the Indian Customs Electronic Gateway (“ICEGATE”) which asked the Respondent to re-file the same. The department rejecting the contention put forth by the Respondent passed an AO levying demand for the same.
The Hon’ble CESTAT, Delhi negating the contentions put forth by the Department that supporting documents could not be filed by the Respondent observed that the Respondent had correctly submitted the requisite data along with the relevant documents of all four BoEs. The non-generation of the BoEs was because of some fault with the ICEGATE portal for which the Respondent cannot be blamed.
Further, noted that the original rate of Basic Customs Duty shall be applicable and not the rate on which the Department had asked the Respondent to resubmit the BoEs along with relevant documents. Therefore, there is no error in the order passed by the Commissioner (Appeals) requiring the Department to reassess the three BoEs with respect to the rate of Basic Customs Duty applicable.
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FULL TEXT OF THE CESTAT DELHI ORDER
The order dated 18.06.2020 passed by the Commissioner of Customs (Appeals)1, by which the Appeal filed by M/s M.D. Overseas Ltd.2 was allowed and the assessment order passed on the three Bills of Entry was set aside with a further direction for re-assessment with respect to the rate of Basic Customs Duty applicable on 05.07.2019, has been assailed by the Principal Commissioner of Customs in this Appeal.
2. It transpires that by a Notification dated 06.07.2019, the Basic Customs Duty on Gold Dore Bars was increased from 9.35 per cent to 11.85 per cent and this was to take effect from the midnight of July 5/6, 2019.
3. The respondent claims that it imported four consignments of Gold Dore Bars and in relation to these four consignments filed four Bills of Entry with relevant supporting documents through ICEGATE3 portal on 05.07.2019. However, only one Bill of Entry number was generated corresponding to Job Code No. 626, but numbers for the three Bills of Entry with respect to Job Code Nos. 629, 630 and 631 were not generated.
4. The respondent, therefore, wrote a letter dated 08.07.2019 to the Commissioner of Customs (Import) for immediate processing of the three pending Bills of Entry and for release of the three consignments. This letter was followed by another letter dated 11.07.2019. The respondent also informed the Commissioner that it had received a communication from ICEGATE service manager that the three Bills of Entry could not be processed due to a technical glitch in their system and that the ICEGATE had requested the respondent to re-file the same. The respondent, therefore, pointed out that when there was a fault at the end of ICEGATE, it should not be asked to re-file the Bills of Entry. Subsequently, the respondent also received a response from the ICEGATE portal on 12.07.2019 stating that due to budget activity, the pending Bills of Entries could not be processed on 05.07.2019 after 5 pm and the respondent should re-file the same.
The respondent also submitted a letter dated 15.07.2019 to the Commissioner (Imports) that any direction to re-file the Bills of Entry would not only be incorrect but would also cause severe financial prejudice to the respondent since the Basic Customs Duty had increased in the meantime. A request was, therefore, made to process the pending Bills of Entry filed on 05.07.2019. This letter was followed by a letter dated 19.07.2019. As no response was received, the respondent claims that it filed the Bills of Entry again on 20.07.2019 and Bills of Entry numbers were generated on that date. The respondent also paid Basic Customs Duty at the increased rate of 11.85 per cent.
5. However, as the respondent did not receive any reply to the letters dated 08.08.2019 and 29.08.2019, the respondent filed a statutory appeal before the Commissioner (Appeals). The Commissioner (Appeals), by the impugned order dated 18.06.2020, allowed the appeals and set aside the assessment of the three Bills of Entry with a direction to re-assess the same at the Basic Customs Duty applicable on 05.07.2019.
6. This appeal has, accordingly, been filed by the Principal Commissioner of Customs to assail the aforesaid order dated 18.06.2020 passed by the Commissioner (Appeals).
7. It is necessary to note the ‘Brief Facts of the Case’, as have been stated by the Department in the Memo of Appeal, and they are as follows:-
“The Importer regularly imports Gold Dore Bars on a regular basis for manufacture and the export of the manufactured Gold Articles and Gold Jewellery. The assessee imported four consignments of Gold Dore Bars classifiable under CTH-71081200 from foreign suppliers on the basis of invoices and other import documents issued by the overseas suppliers. The Importer presented requisite data on 05.07.2019 through the ICEGATE portal for generation of Bills of Entry and in terms of the regular practice Job Codes were also created evidencing the presentation of the requisite data for filing of Bills of Entry.
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2.1 The Importer submitted the complete set of documents with respect to all the four consignments on 05.07.2019 through ICEGATE. However, Bill of Entry number was generated only for one consignment at Serial No. 1 above, the rest of the Bills of Entry were not generated on 05.07.2019 and were kept pending. The Importer wrote a letter date 08.07.2019 to the Commissioner of Customs (Imports) requesting for immediate release of the said 3 consignments. The Importer on an enquiry from ICEGATE understood that the Bills of Entry were not generated on 05.07.2019 due to some technical error and addressed another letter dated 11.07.2019 to the Commissioner (Imports) that the documents and Bills of Entry presented on 05.07.2019, being complete in all respects, ought to be generated, assessed and the consignments ought to be released on an immediate basis.
2.2 The Importer received an email on 12.07.2019 from ICEGATE portal stating that the Bills of Entry were not processed due to Budget activity on 05.07.2019 and the Importer was required to re-file the said Bills of Entry again. On 15.07.2019, the Importer addressed a letter before the Commissioner of Customs (Imports) stating that once admittedly the entire documentation filed on 05.07.20I9 was complete and the non-processing of the Bills of Entry was due to technical error at the end of ICEGATE, the Importer should not be put to financial prejudice. Accordingly, it was requested that the Bills of Entry presented on 05.07.2019 ought to be assessed and the consignments ought to be released to the Importer.
2.3 As the clearance of goods was getting delayed indefinitely, the Importer re-filed the Bills of Entry on 19,07.2019 and 20.07.2019, and was made to pay BCD at the increased rate as applicable on 19.07.2019/ 20. 07.2019. Left with no choice the Importer addressed a letter dated 19.07.2019 wherein, while giving the background and circumstances in which the Importer was getting the goods cleared, the Importer submitted that the direction of filing Bills of Entry in the current date was completely illegal and arbitrary and was imposing additional unwarranted liabilities on the Importer. Having cleared goods, the Importer sought reasons from the Commissioner for assessment at higher rate and not considering their request. Xxxxxxxxxxx.”
(emphasis supplied)
8. Shri Sunil Kumar, learned Authorized Representative appearing for the Department made the following submissions:-
(i) The respondent failed to co-relate the impugned job numbers claimed in the Impugned Order with the Bills of Entry numbers generated subsequently on re-filing;
(ii) The respondent did not file the requisite details/documents in the portal on 05.07.2019;
(iii) Being a regular importer, the respondent should have been aware about the Budget Day procedure. Further, despite display on the portal that the website would be closed from 1700 hours on 05.07.2019 for up-dation of budgetary changes, the respondent submitted the requisite data around 1700 hours to take benefit of lesser rate of duty;
(iv) The judgments relied upon by the Commissioner (Appeals) are not applicable to facts and circumstances of the instant case;
(v) In terms of the Bill of Entry (Electronic Integrated Declaration and paperless) Regulation 20184, a declaration submitted by the importer should be accepted and a unique number should be generated. In the instant case, neither the declaration was accepted nor the unique number i.e. Bill of Entry number was generated. Moreover, the importer did not present the supporting documents i.e. commercial invoices, packing list and license etc at the time of filing Bills of Entry on 05.07.2019; and
(vi) In support of his submissions, learned Authorized Representative placed reliance upon the following decision:
(i) Union of India vs. G.S. Chatha Rice Mills5.
9. Shri Kishore Kunal, learned Counsel appearing for the respondent made the following submissions:-
(i) A bare perusal of the Appeal discloses that there is no dispute to the factual position that the four Bills of Entry with relevant documents were presented in the ICEGATE portal on 05.07.2019 and job numbers were created on the portal as an acknowledgment of such presentation. Once this factual position is undisputed in the Appeal, the four Bills of Entry have necessarily to be assessed as per the rate of duty existing as on the date of presentation i.e. on 05.07.2019;
(ii) In terms of section 15 of the Customs Act, 19626, it is the date of presentation of the Bills of Entry which is the relevant date for the purpose of ascertaining and applying the rate of duty to be applied on the imported goods. In the facts of the present case, neither at any earlier stage of the present proceedings nor in the Appeal filed before this Tribunal, it has been stated by the Department that the Bills of Entry with supporting document were not presented in the EDI system on 05.07.2019;
(iii) The sole basis of the Appeal appears to be an erroneous presumption that the Bills of Entry were not presented with all the relevant supporting documents and the same were only provided later on 20.07.2019;
(iv) Without admitting that all the documents were not submitted at stage of presentation of the Bills of Entry on 05.07.2019, even then the rate of duty applicable on the initial date of filing of the Bills of Entry would still be applicable on the subject imports. In this regard reliance has been placed on a judgment of the Madras High Court in Vijaya Industrial Products v/s Union Of India7 and of the Tribunal in National Synthetics v/s CC, Tuticorin8; and
(v) The present Appeal has been filed entirely based on inconsistent and incorrect assertions which are contrary to the records of the present case. These are:-
(a) Non-correlation of Job Numbers;
(b) Non-uploading of complete documentation;
(c) Deliberate delay in filing of Bills of Entries;
(d) Waiver of delay penalty; and
(e) No technical reason or ICEGATE fault.
10. The submissions advanced by the learned Authorized Representative of the Department and the learned Counsel appearing for the respondent have been considered.
11. To appreciate the submissions, it will be necessary to first examine the provisions of the 2018 Regulations.
12. Regulation 2 contains the definition clauses. Sub-clauses (c), (d), (e) and (g) of Regulation 2 are reproduced below:
“2. Definitions:-
(1) In these regulations, unless the context otherwise requires,-
(a) ********
(b) ********
(c) “bill of entry” means electronic integrated declaration accepted and a unique number generated and assigned to that particular bill of entry by the Indian Customs Electronic Data Interchange System, and includes its electronic records or print-outs;
Explanation – For the purposes of this clause, the electronic record shall have the meaning assigned to it as in the Information Technology Act, 2000 (21 of 2000);
(d) “electronic integrated declaration” means particulars relating to the imported goods that are entered in the Indian Customs Electronic Data Interchange System;
(e) “ICEGATE” means the customs automated system of Central Board of Indirect Taxes and Customs;
(f) ********
(g) “supporting documents” means the documents in the electronic form or otherwise, which are relevant to the assessment of the imported goods under sections 17 and 46 of the Act.”
13. Regulation 3 requires the authorised person to enter the electronic integrated declaration and the supporting documents on the Customs Automated System. Regulation 4(1) requires the authorised person to file the Bill of Entry before the end of the next day following the day on which the aircraft or vessel or vehicle carrying the goods arrives at a customs station. Regulation 4(2) provides that the Bill of Entry shall be deemed to have been filed and self-assessment completed when after entry of the electronic integrated declaration, a Bill of Entry number is generated by the Indian Customs Electronic Data Interchange System for the said declaration and the self-assessed copy of the Bill of Entry may be electronically transmitted to the authorised person. Regulation 3 and Regulation 4(1) and (2) are reproduced below:
“3. The authorised person shall enter the electronic integrated declaration and the supporting documents himself by affixing his digital signature and enter them on the Customs Automated System and he may also get the electronic integrated declaration made on the customs automated system along with the supporting documents by availing the services at the service centre.
Explanation.- For the purposes of this regulation, the words “digital signature” shall have the meaning assigned to it in the Information Technology Act, 2000 (21 of2000);
(1) The authorised person shall file the bill of entry before the end of the next day following the day (excluding holidays) on which the aircraft or vessel or vehicle carrying the goods arrives at a customs station at which such goods are to be cleared for home consumption or warehousing.
(2) The bill of entry shall be deemed to have been filed and self-assessment completed when after entry of the electronic integrated declaration on the customs automated system or by way of data entry through the service centre, a bill of entry number is generated by the Indian Customs Electronic Data Interchange System for the said declaration and the self- assessed copy of the Bill of Entry may be electronically transmitted to the authorised person or printed out at the service centre.”
14. The factual position that would emerge after considering the facts stated by the respondent, the facts stated by the Department in the Memo of the Appeal and the findings recorded by the Commissioner (Appeals) are needs to stated.
15. The respondent has stated:
(i) It had filed four Bills of Entry with the relevant supporting documents on 05.07.2019 through the ICEGATE portal for the four consignments of Gold Dore Bars that it imported.
(ii) TRU issued a Circular dated 05.07.2019 that there would be a change in the rate of Basic Customs Duty from 06.07.2019 (00.00Hrs). A Notification dated 06.07.2019 was consequently issued for increasing the Basic Customs Duty from 9.35 per cent to 11.85 per cent w.e.f. midnight of 05/06.07.2019 According to the respondent, only one Bill of Entry number, corresponding to Job Code No. 626, was generated but with respect to Job Code Nos. 629, 630 and 631 Bills of Entry numbers were not generated; It, therefore, made a representation to the Commissioner of Customs (Imports) on 08.07.2019 and also raised this issue with ICEGATE service manager. It received an e-mail from ICEGATE portal mentioning that the three Bills of Entry could not be generated on account of a technical error at its end and, therefore, asked the respondent to re-file the Bills of Entry;
(iii) The respondent, thereafter wrote a letter dated 11.07.2019 to the Commissioner of Customs (Imports) mentioning that when the non-generation of numbers for the three Bills of Entry was on account of some technical glitch in the ICEGATE system, the respondent should not be asked to re-file the same. The respondent also received a letter dated 12.07.2019 from the ICEGATE service manager mentioning therein that due to budget activity on 05.07.2019, the files could not be processed after 5 pm and so the respondent should re-file the Bills of Entry;
(iv) The respondent, thereafter submitted a letter dated 15.07.2019 to the Commissioner of Customs (Imports) pointing out that the direction to re-file the three Bills of Entry would not only be incorrect but would also cause severe financial prejudice to the respondent since the Basic Customs Duty had increased in the meantime w.e.f. 05.07.2019; and
(v) Since no response was received, the respondent filed the Bills of Entry again on 20.07.2019. The three Bills of Entry numbers were generated on that date and the respondent also paid Basic Customs Duty at the increased rate of 11.85 per cent.
16. In the Memo of Appeal, the appellant has stated:
(i) The importer presented the requisite data on 05.07.2019 with regard to the four consignments of Gold Dore Bars through ICEGATE portal for generation of Bills of Entry and in terms of regular practice, Job Codes were also created evidencing the presentation of the requisite data for the Bills of Entry. However, Bill of Entry number was generated only for one consignment and the remaining three Bills of Entry numbers were not generated on 05.07.2019 and were kept pending;
(ii) The importer wrote a letter on 08.07.2019 to the Commissioner of Customs (Imports) requesting for immediate release of these three consignments;
(iii) The importer, from an enquiry from ICEGATE, understood that the three Bills of Entry numbers were not generated on 05.07.2019 due to some technical error at the end of ICEGATE and sent a letter dated 11.07.2019 to the Commissioner (Imports) stating that since the documents and the Bills of Entry were presented on 05.07.2019, they should be processed;
(iv) The importer received an e-mail on 12.07.2019 from ICEGATE portal that the three Bills of Entry were not processed after 5 PM due to budget activity on 05.07.2019 and so the importer should re-file the said Bills of Entry;
(v) The importer wrote a letter dated 15.07.2019 to the Commissioner of Customs (Imports) stating that since the entire documentation filed on 05.07.2019 was complete in all respects and non-processing of the three Bills of Entry was at the end of the ICEGATE, the importer should not be put to financial prejudice;
(vi) The importer re-filed the Bills of Entry on 19.07.2019/20.07.2019 and paid the increased Basic Customs Duty; and
(vii) The importer thereafter sent letter dated 19.07.2019 to the Commissioner (Imports) stating that the direction to resubmit the Bills of Entry was not only illegal but it had resulted in additional liability on the importer.
17. Thus, it can safely be said from the statements made by the respondent and the appellant that the respondent/importer had presented the Bills of Entry with requisite data on 05.07.2019 on the ICEGATE portal for generation of the Bills of Entry numbers, but only one Bill of Entry number was generated on that date. The remaining three Bills of Entry numbers could not be generated due to some technical glitch at the end of ICEGATE portal and also because of the fact that the Bills of Entry could not be processed after 5 pm on 05.07.2019 due to budget activity. The respondent, therefore, re-filed the Bills of Entry and the Job Code Nos. 629, 630 and 631 were processed by the Department on 19.07.2019 and 20.07.2019 and three Bills of Entry numbers were generated. It is not the case of the Department, as set out in “Brief Facts of the Case” in the Memo of Appeal, that incomplete documents were submitted by the respondent on 05.07.2019 as a result of where three Bills of Entry numbers could not be generated on that date.
18. It is in the light of the aforesaid factual position that the findings recorded by the Commissioner (Appeals) need to be appreciated. The relevant portions of the findings are reproduced:
