2023 (9) TMI 242 - AT - Customs

Adjudication proceedings / Tax Administration - internal process of the customs administration - Valuation - Loading of value - Enhancement of duty liability under Customs Act 1962 - commercial transactions with suppliers who are related - HELD THAT - It is settled law that a valid order of assessment or adjudication must if detrimental to assessee be decided within the confines of a show cause notice. The present proceedings are bereft of such preliminaries and thus is not an order; it may at best be a recommendation to proper officer that does not substitute for exercise of that original authority under the statute. The internal procedures for providing expert consultation to the statutorily empowered assessing officers even if of long standing existence do not vest the institution established for such purpose with statutory acknowledgement; in keeping with the tentativeness of the findings of this internal advisory mechanism assessments guided by the findings are retained as provisional under section 18 of Customs Act 1962 till finalization on a future date - the proceedings under section 18 of Customs Act 1962 not interfered except if terms of such assessment is a cause of grievance. Even so no incidence of provisional assessment is now impugned here. The internal process of the customs administration that enables the proper officer under section 17 or section 18 of the Customs Act 1962 to be assisted in the discharge of the statutory obligation and which legally may not even bind the proper officer does not merit our attention. To the extent that we accord approval or disapproval at this stage we would be appropriating the exercise of powers under section 18 of Customs Act 1962 for finalization of the assessment to ourselves and thereby would also erase one level of remedial jurisdiction that would otherwise be available to either side. This in our view is not the intent of section 128 of Customs Act 1962. The first appellate authority in exercise of powers under section 128 of Customs Act 1962 should have restricted itself to orders that cause grievance - there is an implied lack of jurisdiction for the Tribunal too to consider the merit of either side. It would therefore be appropriate for the first appellate authority to consider remedies appropriate to the grievance if any and to the extent permitted by statutory conferment. The appeal restored to first appellate authority to dispose off in accordance with the law.

Summary

Issues Involved:
The issues involved in this case relate to the purported enhancing of duty liability under the Customs Act, 1962, based on commercial transactions with related suppliers, reference to Special Valuation Branch (SVB), and the validity of the directives issued by the GATT Valuation Cell (GVC).

Issue 1: Enhancing of Duty Liability
The appellant, M/s A Raymond Fasteners India Pvt Ltd, was aggrieved by the enhancing of duty liability under the Customs Act, 1962, based on reported commercial transactions with related suppliers. The Commissioner of Customs (Appeals) sustained the duty liability enhancement, leading to the appeal before the Tribunal. The appellant had entered into various agreements with suppliers, resulting in an order directing loading on the declared invoice value for specified goods imported by the appellant. The failure to persuade the first appellate authority on the merit of their stand led to the proceedings before the Tribunal.

Issue 2: Jurisdiction of the Tribunal
The Tribunal examined whether the first appellate authority had the jurisdiction to decide on the appeal before it, considering the absence of reference to any impugned consignment or quantification of the differential duty involved. The Tribunal noted that the proceedings for recovery would be time-barred by now and questioned the validity of the directives issued by the GATT Valuation Cell (GVC) in relation to the assessment under the Customs Act, 1962.

Issue 3: Compliance with Statutory Provisions
The Tribunal analyzed the compliance with statutory provisions in the assessment process, emphasizing the necessity of a valid order of assessment or adjudication to be decided within the confines of a show cause notice. The Tribunal highlighted that the loading directive issued by the GVC lacked sanctity and that any grievance over such a directive did not substitute for the exercise of the original authority under the statute.

Separate Judgment by the Tribunal:
The Tribunal set aside the impugned order and restored the appeal to the first appellate authority for disposal in accordance with the law. The Tribunal concluded that the appeals were premature and that there was an implied lack of jurisdiction for the Tribunal to consider the merits of either side, directing the first appellate authority to consider appropriate remedies permitted by statutory conferment.