Case Law Details
Commissioner Vs Shiv Ganesh Exim Pvt. Ltd. (CESTAT Delhi)
CESTAT Delhi held that as per section 17(4) of the Customs Act the proper officer is required to pass a speaking order on the re-assessment. Matter remanded to Commissioner (Appeals) to pass a fresh order after taking into consideration the speaking orders passed by AO.
Facts- 18 Bills of Entries were filed by the respondent in respect of import of Aluminium Scrap. The respondent self-assessed the duty, but AO prima facie did not accept the value and put a query to the respondent that the value of the aluminium scrap did not match the contemporary import data. The respondent was, therefore, asked to submit evidence in support of the accuracy of the price declared in the Bills of Entry.
In respect of these 18 Bills of Entry, a speaking order was passed by the assessing officer. The value declared by the respondent was rejected and was re-determined. Feeling aggrieved, the respondent filed 18 appeals before the Commissioner (Appeals), which appeals have been allowed by the order dated 06.05.2021. Being aggrieved, department has preferred the present appeals.
Conclusion- It clearly transpires from a perusal of section 17(5) of the Customs Act that if a speaking order is not passed on the reassessment within 15 days from the date of re-assessment of the Bills of Entry, the transaction value as declared by the assessee in the Bills of Entry would have to be accepted. The Commissioner (Appeals), however, proceed to imagine grounds for enhancement of the value and dealt with them. This exercise was really not required to be undertaken by the Commissioner (Appeals).
Held that the department, therefore, had knowledge of the proceedings before the Commissioner (Appeals), but what has been pointed out and what has also been observed in most of the cases is that neither the department represents itself before the Commissioner (Appeals), nor does file a response to the appeal. Had the department brought the correct facts to the notice of the Commissioner (Appeals), the Commissioner (Appeals) would not have recorded a finding that speaking orders had not been passed.
It is in these appeals that the department has placed the speaking orders covering the 18 Bills of Entry. It is, therefore, considered appropriate to remand the matters to the Commissioner (Appeals) to pass a fresh order after taking into consideration the speaking orders passed by the assessing officer covering the 18 Bills of Entry, which orders shall be placed on record by the department before the Commissioner (Appeals).
FULL TEXT OF THE CESTAT DELHI ORDER
The department has filed these 18 appeals to assail the order dated 06.05.2021 passed by the Commissioner (Appeals) on the appeals that were filed by the respondent M/s Shiv Ganesh Exim Pvt. Ltd.1. The respondent had filed appeals before the Commissioner (Appeals) against the assessment orders covering the 18 Bills of Entry.
2. It transpires that 18 Bills of Entries were filed by the respondent in respect of import of Aluminium Scrap. The respondent self-assessed the duty, but the Assessing Officer prima facie did not accept the value and put a query to the respondent that the value of the aluminium scrap did not match the contemporary import data. The respondent was, therefore, asked to submit evidence in support of the accuracy of the price declared in the Bills of Entry.
3. The respondent submitted a reply to the aforesaid query and pointed out that the price declared was true and correct and that in case the assessing officer wanted to lower the value, then the assessing officer should pass a speaking order.
4. In respect of these 18 Bills of Entry, a speaking order was passed by the assessing officer. The value declared by the respondent was rejected and was re-determined. Feeling aggrieved, the respondent filed 18 appeals before the Commissioner (Appeals), which appeals have been allowed by the order dated 06.05.2021.
5. It is this order dated 06.05.2021 that has been assailed by the department in all these 18 appeals.
6. A perusal of the impugned order dated 06.05.2021 passed by the Commissioner (Appeals) shows that the Commissioner (Appeals) recorded a finding of fact that though the respondent had requested for a speaking order to be passed, but it was not passed. The Commissioner (Appeals) even after recording that section 17 (5) of the Customs Act, 19622 “imposes an obligation on the assessing officer to pass a speaking order while rejecting the value declared by the appellant” proceeded to hold that various parameters or dimensions related to the nature of the product were required to be looked into while applying the value of contemporaneous imports and that the London Metal Exchange Bulletin prices for metals cannot be the basis of the determination of the value of the scrap as that would not only be contrary to the provisions of the Customs Valuation (Determination of Price of Imported Goods) Rules, 20073 but also contrary to the law pronounced in various judgements. Ultimately, the Commissioner (Appeals) observed:
“8. In view of the above, I find that in the present cases, no judicial discipline has been followed and all the norms as laid down, as discussion supra, under Customs Act, 1962 have been violated and enhancement of value in respect of all the concerned Bills of Entry has been restored to by the assessing officer in an arbitrary manner, without any cogent reasons. Hence, the said enhancement of value fails to sustain and the declared transaction value with respect to the above mentioned Bills of Entry merits acceptance for the purpose of assessment of duty.
9. Accordingly, all the appeals filed by the appellant are allowed with consequential relief.”
7. Shri S. K. Rahman, learned authorised representative appearing for the department has pointed out that the aforesaid finding recorded by the Commissioner (Appeals) that speaking orders were not passed is factually incorrect and in this connection he has placed all the 18 speaking orders passed by the assessing officer. It is, therefore, his contention that the matter should be remanded to the Commissioner (Appeals) to pass a fresh order after examining the speaking orders that were passed by the assessing officer.
8. Reena Rawat assisted by Ms. Gunjan Tanwar, learned counsel for the respondent, however, pointed out that as the speaking orders were not in the knowledge of the respondent, they could not place this fact before the Commissioner (Appeals) and that is why the Commissioner (Appeals) recorded such a finding.
9. The submissions advanced by the learned authorised representative appearing for the department and the learned counsel for the respondent have been considered.
10. Section 14 of the Customs Act deals with ‘valuation of goods’ and is reproduced below:
“Section 14. Valuation of goods. – (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, the value of the imported goods and export goods shall be the transaction value of such goods, that is to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case may be, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may be specified in the rules made in this behalf:
Provided *****”
11. It would be seen that section 14 of the Customs Act provides that the transaction value of goods shall be the price actually paid or payable for the goods when sold for export to India where the buyer and the seller of the goods are not related and the price is the sole consideration for the sale, subject to such other conditions as may be specified in the rules made in this behalf.
12. Section 17 of the Customs Act deals with assessment of duty. It is reproduced below:
“Section 17. Assessment of duty.- (1) An importer entering any imported goods under section 46, or an exporter entering any export goods under section 50, shall, save as otherwise provided in section 85, self-assess the duty, if any, leviable on such goods.
(2) The proper officer may verify the entries made under section 46 or section 50 and the self-assessment of goods referred to in subsection (1) and for this purpose, examine or test any imported goods or export goods or such part thereof as may be necessary.
Provided that the selection of cases for verification shall primarily be on the basis of risk evaluation through appropriate selection criteria.
(3) For the purposes of verification under subsection (2), the proper officer may require the importer, exporter or any other person to produce any document or information, whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained and thereupon, the importer, exporter or such other person shall produce such document or furnish such information.
(4) Where it is found on verification, examination or testing of the goods or otherwise that the self- assessment is not done correctly, the proper officer may, without prejudice to any other action which may be taken under this Act, re-assess the duty leviable on such goods.
(5) Where any re-assessment done under sub-section (4) is contrary to the self-assessment done by the importer or exporter and in cases other than those where the importer or exporter, as the case may be, confirms his acceptance of the said reassessment in writing, the proper officer shall pass a speaking order on the re-assessment, within fifteen days from the date of reassessment of the bill of entry or the shipping bill, as the case may be.”
(emphasis supplied)
13. It would be seen that in a case where re-assessment has to be done under sub-section (4) of section 17 of the Customs Act, the proper officer is required to pass a speaking order on the reassessment. Under sub-section (5), a speaking order shall be passed by the assessing officer on the re-assessment within 15 days from a date of re-assessment of the Bill of Entry.
14. The Commissioner (Appeals) proceeded to decide the appeals on the footing that speaking orders covering all the 18 Bills of Entry had not been passed. This has been found to be factually incorrect as speaking orders covering these 18 Bills of Entry had actually been passed by the assessing officer.
15. It clearly transpires from a perusal of section 17(5) of the Customs Act that if a speaking order is not passed on the reassessment within 15 days from the date of re-assessment of the Bills of Entry, the transaction value as declared by the assessee in the Bills of Entry would have to be accepted. The Commissioner (Appeals), however, proceed to imagine grounds for enhancement of the value and dealt with them. This exercise was really not required to be undertaken by the Commissioner (Appeals).
16. In the present case, it has been pointed out by the learned counsel for the respondent that the respondent was not aware as to whether a speaking order had been passed or not because the respondent was not informed of the same. Even if it is assumed that this fact is correct, nothing prevented the department from placing the correct facts before the Commissioner (Appeals) that speaking orders had been passed covering all the 18 Bills of Entry. It is not in dispute that copies of the notices addressed to the assessee fixing the date of the personal hearing before the Commissioner (Appeals) are also marked to the department. The department, therefore, had knowledge of the proceedings before the Commissioner (Appeals), but what has been pointed out and what has also been observed in most of the cases is that neither the department represents itself before the Commissioner (Appeals), nor does file a response to the appeal. Had the department brought the correct facts to the notice of the Commissioner (Appeals), the Commissioner (Appeals) would not have recorded a finding that speaking orders had not been passed.
17. It is in these appeals that the department has placed the speaking orders covering the 18 Bills of Entry. It is, therefore, considered appropriate to remand the matters to the Commissioner (Appeals) to pass a fresh order after taking into consideration the speaking orders passed by the assessing officer covering the 18 Bills of Entry, which orders shall be placed on record by the department before the Commissioner (Appeals).
18. The impugned order dated 06.05.2021 passed by the Commissioner (Appeals) in relation to these 18 Bills of Entry, therefore, deserves to be set aside. The appeals filed by the department are allowed with a direction to the Commissioner (Appeals) to pass a fresh order after examining the speaking orders passed by the assessing officer on the re-assessment covering the 18 Bills of Entry.
(Order dictated and pronounced in open court)
Note:-
1 the respondent
2 the Customs Act
3 Valuation Rules
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