Nico Extrusion vs. Commissioner of Customs – CESTAT Remands for Speaking Order

Nico Extrusion Ltd. Vs Commissioner of Customs (ACC) (CESTAT Mumbai)

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Mumbai, has disposed of an appeal filed by Nico Extrusion Ltd. against an order by the Commissioner of Customs (Appeals), Mumbai-III. The Commissioner (Appeals) had remanded the matter back to the proper officer of Customs for passing a speaking order concerning the re-assessment of Bills of Entry (B/Es) filed by Nico Extrusion for imported Aluminium Scrap.

Nico Extrusion had self-assessed various B/Es under Section 17(1) of the Customs Act, 1962. However, the Customs authorities did not accept the declared invoice values and re-assessed the B/Es under Section 17(4) of the same Act, leading to an enhancement of the declared value. Nico Extrusion challenged this re-assessment before the Commissioner (Appeals), arguing that the proper officer had failed to issue a speaking order as mandated by Section 17(5) of the Customs Act.

The Commissioner (Appeals) upheld Nico Extrusion’s contention and remanded the case back to the proper officer to issue a speaking order in compliance with Section 17(5). Feeling aggrieved by this remand order, Nico Extrusion approached CESTAT.

After hearing both the appellant and the revenue, CESTAT observed that it was an admitted fact that the self-assessed B/Es were examined, and re-assessment for value enhancement was ordered. Crucially, the proper officer did not issue a speaking order during the re-assessment process, which is a mandatory requirement under Section 17(5) of the Customs Act.

CESTAT concurred with the Commissioner (Appeals)’ finding that the matter was rightly remanded for the issuance of a speaking order. Consequently, CESTAT found no merit in Nico Extrusion’s appeal against the remand order.

However, noting that the matter was already remanded, CESTAT directed the proper officer to complete the re-assessment proceedings, including the issuance of the speaking order as per Section 17(5) of the Customs Act, within a period of 15 days from the date of receipt of the CESTAT order. This timeline aligns with the provisions of Section 17(5) of the Customs Act.

In conclusion, CESTAT disposed of the appeal, upholding the remand order by the Commissioner (Appeals) and setting a 15-day deadline for the proper officer to complete the re-assessment with a speaking order.

FULL TEXT OF THE CESTAT MUMBAI ORDER

Heard both sides and perused the case records.

2. Applicant has filed this miscellaneous application, seeking early hearing of the appeal. On going through the averments made in the said application, we are of the view that the prayer made in support of out-of-turn hearing of appeal can be considered and accordingly, the miscellaneous application is allowed. Since the issue in this appeal lies in a narrow compass, with the consent of both sides, the appeal is taken up for hearing and disposal today.

3. Briefly stated, the facts of the case are that the appellants had imported different types of Aluminium Scrap material and self-assessed Bills of Entry (B/Es) under Section 17(1) of the Customs Act, 1962. However, the invoice values declared by the appellants in the B/Es were not accepted by the proper officer of Customs and the same was enhanced through the process of re-assessment, in terms of Section 17(4) ibid. Since, the mandatory requirement of Section 17(5) ibid was not complied with by the proper officer in passing the speaking order, the appellants had assailed the re-assessed B/Es by way of filing an appeal before the learned Commissioner (Appeals). Appeal filed by the appellants was disposed of by the learned Commissioner of Customs (Appeals), Mumbai-III vide the impugned order dated 25.09.2019, in remanding the matter back to the proper officer for passing of a speaking order in terms of Section 17(5) ibid. Feeling aggrieved with the impugned order, the appellants have preferred this appeal before the Tribunal.

4. It is an admitted fact on record that the self-assessed B/Es by the appellants were examined by the proper officer and reassessment of B/Es was ordered for enhancing the value of the imported goods. However, we find that while re-assessing the B/Es, the proper officer had not passed the speaking order as mandated under Section 17(5) ibid. Since passing of speaking order is a mandatory requirement under the statute, in our view, the learned Commissioner (Appeals) has rightly remanded the matter back to the proper officer for passing of the speaking order. Therefore, we do not find any merits in the appeal filed by the appellants. However, considering the fact that the matter arising out of the impugned order has already been remanded back to the proper officer for passing of the speaking order, in terms of sub-section (5) of Section 17 ibid, we direct the proper officer to complete the re-assessment proceedings within a period of 15 days from the date of receipt of the present order. The timeline given by us in the present order is in conformity with the provisions of sub­section (5) of Section 17 ibid.

5. The appeal is disposed of in the above terms.

(Dictated and pronounced in open court)