2016 (2) TMI 357 - AT - Customs

Rectification of order - Finalization of provisional assessment - Ex-bond Bills of Entry in respect of both imported and indigenous crude oil - warehoused goods - appellant informed the Deputy Commissioner that the Ex-bond Bill of Entry was actually indigenous crude oil and by mistake, it was recorded as a imported crude oil in the final assessment order - Held that - Section 154 of the Act, is an independent provisions for correction or rectification of errors, in any order or decision passed by the officer, and the authority should have examined as to whether it is a mistake within the scope of Section 154 of the Act. In the present case, both authorities below had failed to consider the facts of the case in the light of the Section 154 of the Act. If the Adjudicating Authority fails to record between the materials on which certain conclusions are based and the actual conclusion, it is difficult to the appellate authority to determine facts and law of the case. - Matter remanded back.

Summary

Issues:
1. Request for correction of clerical error in finalization of provisional assessment.
2. Applicability of Section 154 of the Customs Act, 1962 for rectification of mistake.
3. Appeal against rejection of rectification request under Section 154.

Analysis:

Issue 1: Request for correction of clerical error in finalization of provisional assessment
The case involved the appellants procuring imported and indigenous crude oil through common pipelines at their Private Bonded Warehouse. A clerical error occurred where indigenous crude oil was mistakenly recorded as imported crude oil in the final assessment order. The appellant made several correspondences with the Department to rectify this mistake, but their request was rejected. The appellant then filed an appeal before the Commissioner (Appeals) challenging the rejection.

Issue 2: Applicability of Section 154 of the Customs Act, 1962 for rectification of mistake
The crux of the matter was whether the mistake in recording indigenous crude oil as imported crude oil fell under the purview of Section 154 of the Customs Act, 1962. Section 154 allows for correction of clerical or arithmetical errors in any decision or order passed by customs officers. The Adjudicating Authority rejected the rectification request citing that the provisional assessment was finalized after considering all factors, indicating that the mistake was not merely clerical. However, the Tribunal emphasized that Section 154 permits correction of mistakes arising from accidental slips or omissions, and the authorities should have assessed whether the error in this case qualified for rectification under this section.

Issue 3: Appeal against rejection of rectification request under Section 154
The Commissioner (Appeals) held that the final assessment of the Bills of Entry was an appealable order and could not be rectified under Section 154. The Tribunal disagreed, stating that Section 154 provides an independent mechanism for rectification of errors, and the authorities should have evaluated whether the mistake fell within the scope of this provision. The Tribunal set aside the impugned order and remanded the matter to the Adjudicating Authority for a fresh decision, emphasizing the need for proper consideration of the appellant's submissions and granting a fair hearing before passing a new order.

In conclusion, the Tribunal allowed the appeal by way of remand, highlighting the importance of assessing whether a mistake is covered under Section 154 of the Customs Act, 1962 and providing the appellant with a fair opportunity to present their case before a decision is made.