2015 (3) TMI 117 - AT - Customs

Valuation - Modification and audit by proper officer under Section 17(6) - goods have been assessed by the assessing officer though without passing a speaking order - Held that - Respondent M/s I-Tech Corporation imported HSS Drills 6840 Kgs, Taps 3000 Kgs, Rounds 1850 Kgs, Broaches 540 Kgs, Cutters HSS 300 kgs, Blades 70 kgs, and Tool Tips 1950 kgs and declared the transaction value as per the invoice. However, the assessing officer enhanced the transaction value by re-determining the same and duty was paid on the enhanced value. Aggrieved by the assessment order, the appellant filed an appeal before the lower appellant authority on the ground that the value was enhanced without giving any speaking order and principles of natural justice have been violated and there is no basis whatsoever to dispute the value declared. Therefore lower appellate authority after considering provisions of Section 17(6) of the Customs Act ordered for auditing of the records of the importer as per the procedure prescribed. - fact on record is that no speaking order has been passed when the value was enhanced and assessment was finalized and therefore, provisions of Section 17(6) are clearly attracted. Therefore, we do not find any infirmity in the order passed by lower appellate authority. Consequently, the same does not call for an interference. - Decided against Revenue.

Summary

Issues:
1. Interpretation of Section 17(6) of the Customs Act, 1962 regarding audit of assessment of imported goods.
2. Validity of the order passed by the lower appellate authority directing audit under Section 17(6).

Analysis:

Issue 1: Interpretation of Section 17(6) of the Customs Act, 1962 regarding audit of assessment of imported goods.
The appellant argued that Section 17(6) is applicable only if the imported goods are self-assessed or if a speaking order is not passed. They contended that since the goods were assessed by the officer, albeit without a speaking order, the invocation of Section 17(6) was incorrect. The respondent, M/s I-Tech Corporation, imported various items and declared the transaction value as per the invoice. However, the assessing officer enhanced the transaction value without providing a speaking order, leading to the duty being paid on the enhanced value. The lower appellate authority ordered an audit of the importer's records under Section 17(6) to ensure proper assessment. Section 17(6) allows for auditing of duty assessment if reassessment has not been done or a speaking order has not been passed. In this case, since no speaking order was issued when the value was enhanced, the provisions of Section 17(6) were deemed applicable, justifying the audit directive.

Issue 2: Validity of the order passed by the lower appellate authority directing audit under Section 17(6).
The Tribunal found that as no speaking order was passed when the value of the imported goods was enhanced, the lower appellate authority's decision to order an audit under Section 17(6) was justified. The absence of a speaking order in the assessment process triggered the application of Section 17(6), allowing for an audit to ensure the correctness of the assessment. Consequently, the Tribunal upheld the lower appellate authority's order and rejected the appeal by the revenue. The decision also disposed of the stay petition filed in this regard. The Tribunal concluded that the lower appellate authority's directive for an audit under Section 17(6) was appropriate given the circumstances of the case, where the value was enhanced without a speaking order, warranting a review of the assessment through an audit process.

This comprehensive analysis of the judgment highlights the interpretation of Section 17(6) of the Customs Act, 1962 and the validity of the lower appellate authority's decision to order an audit of the importer's records in the absence of a speaking order during the assessment process.