2018 (8) TMI 37 - AT - Customs

Valuation of imported goods - Stock Lot of Unused Hand Tools - rejection of declared value - enhancement of value - no speaking order was passed by the department as contemplated under sub-section (5) of Section 17 of the Customs Act, 1962 - Held that - Sub-section (5) of Section 17 ibid provides that where reassessment done under sub-section (4) is contrary to the self-assessment done by the importer, then the proper officer shall pass a speaking order on the re-assessment within the stipulated time-frame. Since the Customs statute specifically mandates for passing of a speaking order by proper officer, which admittedly has not been done in this case, before addressing the issue, whether refund claim is maintainable, the matter should go back to the original authority, in the interest of justice, for passing of a detailed speaking order, indicating the reason/ground for rejection of the declared value. Appeal allowed by way of remand.

Issues:
1. Enhancement of declared value by customs authorities without passing a speaking order.
2. Rejection of refund claim due to failure to appeal against the assessment order.
3. Compliance with statutory provisions regarding passing of speaking order by proper officer.
4. Applicability of judgments in cases where final assessment orders were not appealed against.

Analysis:

Issue 1: Enhancement of declared value without passing a speaking order
The appellant declared a value of 493.58 USD/MT for imported goods, which was enhanced by the assessing authority to 900 USD/MT without a speaking order as required under sub-section (5) of Section 17 of the Customs Act, 1962. The Tribunal noted that the proper officer had not passed any speaking order regarding the enhancement of value, which is mandated by the Customs statute. Therefore, the Tribunal held that the matter should be remanded to the original authority for the passing of a detailed speaking order before addressing the issue of the maintainability of the refund claim.

Issue 2: Rejection of refund claim for failure to appeal against assessment order
The appellant filed a refund claim after the Commissioner (Appeals) allowed the appeal against the assessment order dated 29.05.2015. The refund claim was partially rejected on the grounds that the appellant did not appeal against the assessed bill of entry dated 23.12.2014. The Tribunal observed that the rejection of the refund claim solely on this ground cannot be sustained, especially considering the failure of the department to adhere to the appellant's request for a speaking order regarding the enhancement of the declared value.

Issue 3: Compliance with statutory provisions for passing speaking order
The Tribunal emphasized the importance of complying with the statutory provisions, specifically sub-section (5) of Section 17 of the Customs Act, which requires the proper officer to pass a speaking order when reassessment is contrary to the importer's self-assessment. In this case, since no speaking order was passed regarding the enhancement of the declared value, the Tribunal directed the original authority to pass a detailed speaking order before making any decisions on the refund claim.

Issue 4: Applicability of judgments in cases of unappealed final assessment orders
The Tribunal distinguished the judgments cited by the Commissioner (Appeals) in the impugned order, noting that those cases involved final assessment orders that were not appealed against by the parties. In contrast, the current case highlighted the non-compliance with the statutory provisions for passing a speaking order, making it necessary to remand the matter to the original authority for proper consideration.

In conclusion, the Tribunal allowed the appeal by way of remand, directing the original authority to pass a speaking order in compliance with the statutory provisions within a specified timeframe. The appellant was granted a personal hearing before any fresh decision is made on the issue.

← Previous Next →