2009 (9) TMI 853 - AT - Customs

Summary

Issues:
1. Assessment of duty based on incorrect information in import documents.
2. Relinquishment of title to goods under Section 23(2) of the Customs Act.
3. Refund of duty paid on Bill of Entry.
4. Interpretation of Section 17(4) of the Customs Act, 1962.

Analysis:
1. The Appellant ordered bearings from a foreign supplier, and upon arrival at Mumbai Port, discrepancies were found between the declared weight and the actual weight of the goods. The Appellant paid duty based on the information provided in the import documents, but upon examination, it was discovered that the goods did not match the description in the documents. Consequently, the Appellant relinquished its title to the goods under Section 23(2) of the Customs Act.

2. The Commissioner (Appeals) rejected the Appellant's appeal, stating that there was no evidence of relinquishment before an order for clearance under Section 47 of the Customs Act was made. However, the assessment made prior to the physical examination cannot be considered as an order for clearance. The goods, as described in the Bill of Entry, never arrived, and the assessment was based on inaccurate information. The Appellant was entitled to a refund of the duty paid.

3. The Appellant's appeal was based on the argument that the assessment of duty was invalid due to the discrepancies in the goods. The Appellant provided evidence of relinquishment before any order for clearance was issued under Section 47 of the Customs Act. As per Section 17(4) of the Customs Act, the proper officer must re-assess the goods after discrepancies are found, and only then can a clearance order be issued. Since the Appellant had relinquished the goods before clearance, they were not liable to pay duty and were entitled to a refund.

4. The judgment concluded that the impugned Order of the Commissioner (Appeals) was unsustainable. The appeal filed by the Appellant was allowed, and they were granted consequential relief as per the law. The interpretation of Section 17(4) was crucial in establishing the Appellant's right to a refund based on the relinquishment of the goods before clearance was granted.