2018 (11) TMI 312 - AT - Customs

Refund of Customs duty paid - rejected on the ground that the appellant has not challenged the order-in-original dated 30.09.2014 - Held that - Once there was lis between department and the assessee and by passing a speaking order, the Deputy Commissioner held that value for the purpose of customs duty shall be the value adopted originally. The impugned order came to be passed thereafter - Unless and until the order on IGM amendment is challenged/reversed, the appellant without taking such recourse, suo-motu cannot decide the value differently. In the facts and circumstances of the present case, it was legal obligation on the appellant to challenge the order of IGM amendment, if at all they were not satisfied on the issue of valuation - without challenging that order, straightway claiming the refund is clearly pre-mature - appeal dismissed - decided against appellant.

Summary

Issues:
- Valuation of imported ship for customs duty
- Refund claim based on valuation dispute
- Jurisdiction of Deputy Commissioner under Customs Act
- Principles of natural justice in customs proceedings

Valuation of imported ship for customs duty:
The case involved the purchase of a ship from an overseas seller, where a dispute arose between the buyer and the seller regarding the beaching of the vessel. The buyer filed a refund claim based on the valuation of the ship for customs duty, contending that the original valuation should be maintained. The Adjudicating Authority had held that the price declared by the buyer in the earlier agreement would be adopted for valuation, even after a reduction in price. The Tribunal noted that the value declared in the original agreement should be upheld unless challenged or reversed, emphasizing the importance of challenging valuation orders before seeking a refund based on a different valuation.

Refund claim based on valuation dispute:
The appellant buyer filed a refund claim on the grounds that they had paid duty based on the original valuation, as per their agreement with the overseas seller. However, the Deputy Commissioner rejected the refund claim, stating that the appellant had not challenged the order on valuation amendment. The Tribunal upheld the decision, emphasizing that without challenging the valuation order, seeking a refund based on a different valuation was premature and not maintainable.

Jurisdiction of Deputy Commissioner under Customs Act:
The Deputy Commissioner, at the time of amending the Import General Manifest (IGM), had raised objections regarding the valuation of the imported ship. A speaking order was passed maintaining the original valuation. The Tribunal highlighted that the Deputy Commissioner's order on valuation should be challenged or reversed before seeking a different valuation for customs duty purposes. Failure to challenge the valuation order rendered the appellant's refund claim premature and not eligible for sanction.

Principles of natural justice in customs proceedings:
The appellant contended that the Deputy Commissioner's decision on IGM amendment should not affect their independent claim for a refund, as they had paid the duty while filing the bill of entry. The Tribunal reiterated the importance of challenging valuation orders before seeking refunds based on different valuations, emphasizing the legal obligation to challenge such orders if dissatisfied. Upholding the lower authorities' decisions, the Tribunal dismissed the appeal, stating that the refund claim was premature due to the failure to challenge the valuation order.

In conclusion, the Tribunal upheld the decision to dismiss the appeal, emphasizing the importance of challenging valuation orders before seeking refunds based on different valuations in customs proceedings. The case highlighted the legal obligation to challenge such orders if dissatisfied, underscoring the significance of adhering to principles of natural justice in customs matters.