2017 (12) TMI 730 - HC - Customs

Extra Duty Deposit (EDD) - matter was remitted back to the Lower Adjudicating Authority (LAA) for a fresh examination with a direction to collect EDD at 5% from the petitioner in respect of the Bill of Entries filed by them - Held that - The Appellate Authority found that LAA has not gone into the aspect with regard to the impact of Rule 10(1)(c) of the Valuation Rules, 2007 and therefore, the matter requires re-examination and verification covering both direct payment and indirect payments to find out if they are related to imported goods and about the condition of sale - When such is the case, adding a rider to that order by directing the petitioner to pay EDD equivalent to 5% value in all the Bills of Entry filed by them would be without jurisdiction, as the lis before LAA is yet to be adjudicated and the matter is at the stage of remand. The imposition of such duty of EDD equivalent to 5% on all the Bill of Entry filed by the petitioner would be beyond the scope of the order passed by the first respondent, as the petitioner succeeded before the LAA - petition allowed - decided in favor of petitioner.

Summary

Issues:
Dispute over imposition of Extra Duty Deposit (EDD) at 5% by the Department following a remand order.

Analysis:
The petitioner, a company engaged in manufacturing various products, imported raw materials from related entities abroad. The Special Valuation Branch (SVB) accepted the declared values for imports made by the petitioner, including a renewal order valid from 2013 to 2016. However, a statutory appeal by the Department led to the setting aside of the original order and a remand for fresh examination. The Department was directed to collect EDD at 5% from the petitioner for Bill of Entries filed. The petitioner succeeded before the Lower Adjudicating Authority (LAA) previously, but the Appellate Authority found deficiencies in the examination, particularly related to Rule 10(1)(c) of the Valuation Rules, 2007. Consequently, the original order was set aside for re-examination.

The High Court noted that the remand order was open for fresh consideration, and the imposition of EDD at 5% on all Bill of Entries by the Department was beyond the scope of the remand. Citing a similar case precedent, the Court set aside the direction to collect EDD and instructed the Department to adjudicate the case based on the remand order, affording a personal hearing to the petitioner's representative and issuing a speaking order within three months.

Therefore, the Court allowed the writ petition, nullified the 5% EDD collection direction, and directed the Department to proceed with adjudication in line with the remand order, ensuring a fair hearing and a prompt decision within the specified timeframe.