2017 (3) TMI 497 - HC - Customs

Validity of reassessment - Classification of imported goods - solar re-chargeable emergency lights - appellant claim that proper officer of the Customs did not pass a speaking order on the re-assessment within fifteen days from the date of re-assessment of the bills of entry. The mandate in subsection (5) of section 17 of the CA, 1962 was not fulfilled and hence the re-assessment ought to have been set aside - Held that - The order made by the proper officer on the bills of entry in changing the classification and value enhancement is an order of re-assessment attracting the provisions of sub-section (5) of section 17 of the Act as urged by the appellant which also appears to be the case from the affidavit filed by the Revenue - the proper officer was required to pass a speaking order on the re-assessment within 15 days of the re-assessment of the bills of entry. No speaking order was passed. In the circumstances, there is no hesitation to set aside the re-assessment - petition allowed - decided in favor of petitioner.

Summary

Issues:
Classification of imported goods under Customs Tariff Heading, Re-assessment of duty leviable on goods, Compliance with provisions of Customs Act, 1962.

Classification of Imported Goods:
The appellant imported solar re-chargeable emergency lights and classified them under Customs Tariff Heading 94055040, while the proper officer classified them under 85131090. The appellant challenged this classification, claiming it should be under the former heading to avail benefits under specific notifications.

Re-assessment of Duty Leviable:
The appellant argued that the re-assessment done on their self-assessment was not confirmed in writing and the proper officer did not pass a speaking order within 15 days as required by section 17(5) of the Customs Act, 1962. The appellant contended that the re-assessment should be set aside due to non-compliance.

Compliance with Provisions of Customs Act:
The appellant claimed that the first check requested did not amount to re-classification and that the re-assessment was not in accordance with the Act. Referring to CBEC's Manual of Instructions, the appellant argued that the facts of the case aligned with a re-assessment under section 17(5) of the Act.

The High Court analyzed the provisions of section 17, 18, and 46 of the Customs Act in relation to the import goods and the self-assessment of duty leviable by the importer. It was noted that the appellant's request for a first check signified a lack of information about the imported goods, leading to a re-classification by the proper officer. The Court emphasized that the appellant did not challenge the assessment order or apply for a refund in a timely manner but later filed a writ petition citing non-compliance with section 17(5).

The Court considered the submissions of both parties and the affidavit filed by the Revenue, which stated that the bill of entry itself constituted an order of assessment under section 17(5) of the Act. The Court concluded that the re-assessment done by the proper officer required a speaking order within 15 days, which was not fulfilled. Therefore, the Court set aside the re-assessment based on the lack of compliance.

In a notable observation, the Court highlighted discrepancies in the Revenue's position and directed the Registry to inform the Chairperson of the Central Board of Excise and Customs about the handling of Revenue's interests. The Court ultimately disposed of the application and appeal in favor of the appellant, setting aside the re-assessment of duty leviable on the imported goods.