2014 (2) TMI 623 - HC - Customs

Exemption from payment of 10% basic customs duty - Notification No.25/2005Cus dated 01.03.2005 - Reassessment in terms of Section 17(5) - Held that - Petitioner had cleared the goods on payment of duty under protest on 04.04.2012. Its application for reassessment was made on 04.09.2014. The entire tenor of the order of 12.09.2012 is that since the assessment had become final, refund cannot be allowed. Whilst the Deputy Commissioner could arguably take that position in the refund claim, the same reasoning cannot be applied to deny the statutory right of the petitioner for reassessment and a determination under Section 17(4) and (5). That the petitioner has appealed against the order of the Deputy Commissioner vis-a-vis refund would not in any manner relieve the customs authority of their obligation to deal with the application under Section 17(4) and (5). In view of the above discussion a direction is hereby issued to the concerned Assistant/ Deputy Commissioner entitled to deal with the application under Section 17(4) and (5) made by the petitioner on 04.04.2012 to consider the same on its merits and pass a reasoned order in accordance with law - Decided in favour of assessee.

Summary

Issues:
1. Claim for exemption from payment of customs duty on imported electronic goods.
2. Delay in reassessment application and refund claim.
3. Customs authority's duty to pass a speaking order under Section 17(5) of the Customs Act.
4. Denial of refund claim by the customs department.
5. Interpretation of Section 17 of the Customs Act and its application in the case.

Analysis:
1. The petitioner imported electronic goods, specifically Sony Cameras, claiming exemption from 10% basic customs duty under Notification No.25/2005Cus. However, the exemption was denied, leading to payment of duty under protest. The petitioner sought reassessment under Section 17(5) of the Customs Act, which was not addressed promptly by the customs authority.

2. The petitioner applied for a refund on the same consignment but faced delays in processing. Despite filing for reassessment and refund, no action was taken by the customs authority within a reasonable timeframe. The delay in addressing these applications raised concerns regarding the petitioner's rights under the Customs Act.

3. The petitioner argued that the customs authority was obligated to pass a speaking order under Section 17(5) of the Customs Act, citing relevant case laws emphasizing the mandatory nature of passing reasoned orders within a specified time frame. The customs department, however, contended that the assessment had become final, and the refund claim was rightfully rejected.

4. The customs department maintained that the petitioner was not entitled to relief as the assessment was considered final, and the refund claim was rejected after due consideration. The department highlighted that the authority was not bound to reassess previous orders while evaluating the refund claim, relying on the Deputy Commissioner's decision dated 12.11.2013.

5. The court analyzed Section 17 of the Customs Act, emphasizing the requirement for proper officers to pass speaking orders in cases of reassessment. The court noted that the petitioner's right to reassessment under Section 17(4) and (5) should not be denied based on the finality of assessment for refund purposes. A direction was issued for the concerned Assistant/Deputy Commissioner to consider the reassessment application and pass a reasoned order within two weeks, ensuring due process and hearing the petitioner.

This detailed analysis of the judgment highlights the key issues surrounding the petitioner's claim for exemption, delay in reassessment and refund, the customs authority's obligations under the Customs Act, and the interpretation of Section 17 in the context of the case.