2020 (2) TMI 284 - AT - Customs

Validity of assessment order - order for auditing under section 17(6) by the proper officer - enhancement of value of imported goods - HELD THAT - The Assessing Officer, on re-assessment was required to pass a speaking order, in terms of sub-section (5) specifying the grounds for such reassessment. In the present case Commissioner (Appeal) has while setting aside the order of reassessment directed the audit as per Section 17(6) ibid. Commissioner (Appeal) could not have directed such an audit in terms of sub section (6) because audit as contemplated is the internal function of the revenue, for purpose of safeguarding the revenue, in case where re-assessment has been done by way of speaking order or otherwise. In appeal Commissioner (Appeal) could have remanded the matter for a speaking order to be passed in terms of sub section (5) by the assessing officer. The matter is remanded to the assessing officer for reconsideration and disposing of the matter with a speaking order as per sub-section (5) of Section 17 of Customs Act, 1962 - appeal allowed by way of remand.

Summary

Issues:
1. Assessment of declared value for clearance of goods.
2. Validity of the order of assessment enhancing the declared value.
3. Appeal against the order of the Commissioner (Appeals).
4. Interpretation of Section 17 of The Customs Act, 1962.
5. Direction for audit under Section 17(6) by the Commissioner (Appeals).
6. Remand of the matter for reconsideration by the assessing officer.

Analysis:

1. Assessment of declared value for clearance of goods:
The appellants filed Bill of Entry No 5482886 dated 16.12.2011 for High Speed Solid/ Copper Wire Scrap and Bill of Entry No 6555239 dated 16.04.2012 for High Speed Steel Grinding Dust. The declared value was not accepted by the assessing officer, leading to an enhancement without a speaking order.

2. Validity of the order of assessment enhancing the declared value:
The issue arose when the enhancement of the declared value was done without a proper speaking order as required by the assessing officer. This lack of a detailed explanation for the enhancement raised concerns regarding the validity of the assessment.

3. Appeal against the order of the Commissioner (Appeals):
The appellants, aggrieved by the order of the Commissioner (Appeals), filed an appeal challenging the decision. The Commissioner (Appeals) had directed the matter back to the proper officer for an audit of the assessment made, which was a pivotal point of contention.

4. Interpretation of Section 17 of The Customs Act, 1962:
The Tribunal analyzed Section 17 of The Customs Act, 1962, which outlines the assessment of duty on imported goods. The section specifies the procedure for re-assessment by the proper officer and the requirement for a speaking order in case of discrepancies in self-assessment.

5. Direction for audit under Section 17(6) by the Commissioner (Appeals):
The Commissioner (Appeals) had directed an audit under Section 17(6) of The Customs Act, 1962, which was deemed inappropriate by the Tribunal. The Tribunal clarified that an audit is an internal function of the revenue and should not have been directed by the Commissioner (Appeals).

6. Remand of the matter for reconsideration by the assessing officer:
In light of the above analysis, the Tribunal decided to remand the matter to the assessing officer for reconsideration. The assessing officer was instructed to pass a speaking order under Section 17(5) of The Customs Act, 1962, within six months, allowing an opportunity for the appellants to be heard.

This detailed analysis of the judgment highlights the key issues surrounding the assessment of declared value, the procedural irregularities in the enhancement of value, the appellate process, the interpretation of relevant legal provisions, and the appropriate course of action to be taken for reconsideration of the assessment.