2023 (12) TMI 83 - AT - Customs

Refund claim - rejection on the ground that the export duty was charged on the basis of Wet Metric Tonne (WMT), whereas the contract value was on Dry Metric Tonne (DMT) - no reason exists to challenge the assessment of the shipping bills - HELD THAT - It is found that it is a fact on record that the appellant filed shipping bills at the time of export of goods and duty was to be paid on the basis of DMT instead of WMT. The Adjudicating Authority without assigning any reason, demanded duty on the basis of WMT in terms of Section 17 (4) of the Customs Act, 1962. As per the said provisions, where on verification or otherwise, it is found that the selfassessment is not done correctly, the proper officer may, without prejudice to any other action, which may be taken under this Act, reassess the duty leviable on such goods. Further, Section 17 (5) of the Customs Act, 1962, mandates that if any order passed by the proper officer under Section 17 (4) of the Act, he shall pass a speaking order on the re-assessment within 15 days from the date of reassessment of shipping bill. In this case, the assessments of shipping bills have been done under Section 17 (4) of the Act and further Section 17 (5) mandates that if any order is passed under Section 17 (4) of the Act, the proper officer is duty bound to pass a speaking order of re-assessment within 15 days of the order passed under Section 17 (4) of the Act - Admittedly, in the case in hand, no order under Section 17 (5) of the Act has been passed. The re-assessment of shipping bill is not final. Therefore, the appellant has no reason to challenge the assessment of the shipping bills. In that circumstances, the reasons for denying the refund to the appellant are not sustainable - the impugned order set aside - the adjudicating authority/proper officer is directed to pass a speaking order under Section 17 (5) of the Act and thereafter, if any refund claim is maintainable, the same is be decided in accordance with law. Appeal disposed off by way of remand.

Summary

Issues involved:
Challenge against rejection of refund claim based on incorrect assessment of export duty.

Detailed Judgment:

Issue 1: Incorrect assessment of export duty
The appellant challenged the rejection of their refund claims, which were based on the discrepancy between export duty charged on Wet Metric Tonne (WMT) and the contract value on Dry Metric Tonne (DMT). The Adjudicating Authority demanded duty on the basis of WMT without passing a speaking order under Section 17 (5) of the Customs Act, 1962. The authorities rejected the refund claims citing finality of assessment due to no appeal filed against the shipping bills. The appellant contended that without a speaking order, the assessment was not final, making the refund claim maintainable.

Issue 2: Legal provisions under Customs Act
Sections 17 (4) and 17 (5) of the Customs Act, 1962 were crucial in this case. Section 17 (4) allows reassessment of duty if self-assessment is found incorrect, while Section 17 (5) mandates a speaking order within 15 days of reassessment. The Tribunal noted that no order under Section 17 (5) was passed in this case, indicating that the reassessment of shipping bills was not final. Consequently, the appellant had grounds to challenge the assessment and the denial of their refund was deemed unsustainable.

Conclusion:
The Tribunal set aside the impugned order and directed the proper officer to pass a speaking order under Section 17 (5) of the Act. If a refund claim is found maintainable after the speaking order, it should be decided in accordance with the law. The appeal was disposed off by way of remand, emphasizing the importance of following legal procedures for assessment and refund claims under the Customs Act, 1962.