Case Law Details
Zeetel Electronics Vs Commissioner of Customs (CESTAT Bangalore)
The case of Zeetel Electronics vs Commissioner of Customs (CESTAT Bangalore) revolves around the appeal filed against the decision of the Commissioner of Customs (Appeals), Cochin, concerning the clearance of goods and the application of customs duty exemptions.
Zeetel Electronics had imported goods, including ‘O’ General Air Conditioner and Flex Shampoo Conditioner, and filed Bills of Entry claiming benefits under Notification No. 29/2010-Cus dated 27.02.2010. The Customs authorities, however, denied these benefits. Upon their advice, Zeetel Electronics filed revised Bills of Entry without claiming the exemptions and paid the requisite customs duty and SAD (Special Additional Duty) as the goods were urgently required.
Subsequently, Zeetel Electronics appealed the assessment before the Commissioner (Appeals), challenging the denial of exemption benefits. The Commissioner (Appeals) rejected their appeals, asserting that once goods are cleared for home consumption and duty is paid, the assessment is deemed final. Dissatisfied with this decision, Zeetel Electronics filed an appeal before the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT).
During the tribunal proceedings, no representative appeared for Zeetel Electronics. However, the grounds of appeal argued that the denial of exemption benefits under Notification No. 29/2010-Cus was erroneous. They contended that the Commissioner (Appeals) had misinterpreted Section 17(5) of the Customs Act, 1962, which pertains to the authority’s obligation to pass a reasoned order when an assessment contradicts the importer’s claims regarding valuation, classification, or exemptions.
The Revenue’s representative supported the Commissioner (Appeals)’ findings during the tribunal hearing.
The core issue before CESTAT was whether the Commissioner (Appeals) was justified in dismissing Zeetel Electronics’ appeals without examining the merits of their claims under the customs notifications. CESTAT referenced Section 17(5) of the Customs Act, which mandates that if an assessment conflicts with the importer’s assertions and is not accepted in writing, the assessing officer must issue a speaking order within a specified timeframe.
CESTAT noted that Zeetel Electronics had paid the duty under protest and subsequently appealed, indicating their disagreement with the assessment. Referring to a precedent from the Hon’ble Supreme Court in the case of ITC Ltd. vs CCE, Kolkata-IV, CESTAT emphasized that both the Revenue and the appellant have the right to appeal against assessment orders, regardless of whether they involve self-assessment or reassessment.
Quoting the Supreme Court’s ruling, CESTAT highlighted that any order under the Customs Act, including self-assessment, is appealable if any party is aggrieved. The tribunal concluded that the Commissioner (Appeals) should have addressed Zeetel Electronics’ appeals on their merits rather than dismissing them on procedural grounds.
In light of these considerations, CESTAT set aside the Commissioner (Appeals)’ decision and remanded the case for fresh consideration. They directed the Commissioner (Appeals) to adjudicate all issues on merit after providing Zeetel Electronics with a fair opportunity to present their case. Given the age of the assessment, CESTAT instructed that the proceedings be completed within three months from the date of their order.
In conclusion, CESTAT’s ruling in favor of Zeetel Electronics underscores the importance of due process in customs assessments and appeals. It reinforces the right of appellants to have their cases heard on substantive grounds rather than dismissed based on technical interpretations of assessment finality.
FULL TEXT OF THE CESTAT BANGALORE ORDER
These appeals have been filed against Order-in-Appeal No. COC-CUSTM-000-APP-352 to 356-13-14 dated 24.03.2014 passed by the Commissioner of Customs (Appeals), Cochin.
2. Briefly stated the facts of the case are that the appellant filed Bills of Entry Nos. 265904 dt. 23.03.2010, 265908 dt. 23.03.2010, 273078 dt. 06.07.2010, 267672 dt. 22.04.2010, and 2280793, dt. 25/10/2010 respectively, for clearance of goods ‘ ‘O’ General Air Conditioner, Split Indoor Unit and Flex Shampoo Conditioner 20 OZ USA’ claiming benefit under Notification No.29/2010-Cus dated 27.02.2010. The assessing authority opined that the benefit of the said notification is not admissible to them. Further, on the advice of the Customs authorities, the appellant filed revised Bills of Entry without claiming the benefit of the above said two notifications and cleared the goods on payment of appropriate Customs duty and SAD as the imported items were urgently required for treatment. Later, the appellant filed appeals before the learned Commissioner(Appeals) challenging the said assessment. The learned Commissioner(Appeals) rejected their appeals holding that once the goods are cleared for home consumption, the assessment is deemed to have reached finality. Hence the present appeal.
3. None present for the appellant. However, the appellant in their grounds of appeals submitted that the assessing officer has wrongly rejected their claim of benefit under Notification No.29/2010-Cus dated 27.02.2010. It is also submitted that the learned Commissioner (Appeals) without going into merits of the case on a mis-interpretation of Section 17(5) of the Customs Act, 1962 observing that once the goods are cleared for home consumption, the assessment is deemed to have reached finality, rejected their appeals. It is stated that since, they were aggrieved with the assessment order, the appeal was filed before the Commissioner(Appeals), which the learned Commissioner (Appeals) should have decided on merit.
4. Learned AR for the Revenue reiterated the findings of the learned Commissioner(Appeals).
5. Heard both sides and perused the records.
6.1. The short question involved in the present case is whether the learned Commissioner(Appeals) is justified in rejecting the appeals without deciding the issue on merits taking the recourse of Section 17(5) of the Customs Act, 1962. The said provision is as follows:-
“17. Assessment of duty. –
1. ….
2. ….
3. ….
4. ….
5. Where any assessment done under sub-section (2) is contrary to the claim of the importer or exporter regarding valuation of goods, classification, exemption or concessions of duty availed consequent to any notification therefor under this Act, and in cases other than those where the importer or the exporter, as the case may be, confirms his acceptance of the said assessment in writing, the proper officer shall pass a speaking order within fifteen days from the date of assessment of the bill of entry or the shipping bill, as the case may be.
6.2. In the present case, we find that after rejection of the appellant’s claim of benefit under the above said notifications as declared in their Bills of Entry, they paid the duty under protest and preferred appeal before the learned Commissioner(Appeals). Therefore, the learned Commissioner(Appeals) ought to have decided the appeals on merits instead of rejecting the same by observing that the appellant has accepted the assessment. Further, the Hon’ble Supreme Court in the case of ITC Ltd. Vs. CCE, Kolkata-IV (368) ELT 216 (SC) has held that Revenue as well as appellant can prefer an appeal against the order of the assessment. Their lordships have observed as:
43. As the order of self-assessment is nonetheless an assessment order passed under the Act, obviously it would be appealable by any person aggrieved thereby. The expression „Any person‟ is of wider amplitude. The revenue, as well as assessee, can also prefer an appeal aggrieved by an order of assessment. It is not only the order of re-assessment which is appealable but the provisions of Section 128 make appealable any decision or order under the Act including that of self-assessment. The order of self-assessment is an order of assessment as per Section 2(2), as such, it is appealable in case any person is aggrieved by it. There is a specific provision made in Section 17 to pass a reasoned/speaking order in the situation in case on verification, self-assessment is not found to be satisfactory, an order of reassessment has to be passed under Section 17(4). Section 128 has not provided for an appeal against a speaking order but against “any order” which is of wide amplitude. The reasoning employed by the High Court is that since there is no lis, no speaking order is passed, as such an appeal would not lie, is not sustainable in law, is contrary to what has been held by this Court in Escorts (supra).
7. In view of the above, the impugned order is set aside and the case is remanded to the learned Commissioner(Appeals) to decide all the issues on merit, after affording an opportunity of hearing to the appellant. Since the assessment involved in the appeals is around a decade old, it is directed that the denovo proceeding be completed within three months from the date of communication of this order. All issues are kept open. Appeal is allowed by way of remand.
(Order dictated and pronounced in Open Court.)
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