2007 (12) TMI 166 - AT - Customs

Once the assessment has been finalised it becomes an appealable order & in case if there is non-challenge of an appealable order then the question of challenging the correctness of assessment does not arise demand raised in SCN without challenging the assessment order in appeal - Since demand cannot be raised without challenging the assessment in appeal, the plea whether Sec. 28 gives the power of review of assessment or not can be considered only at the time of final hearing stay granted

Summary

Issues:
- Application for waiver of pre-deposit of duty amounting to Rs. 65,81,210/- along with interest demanded by the Commissioner (Appeals) vide his impugned order.
- Interpretation of Section 28 of the Customs Act, 1962 regarding the power to demand duty in cases of short levy.
- Comparison of provisions of Section 11A of the Central Excise Act and Section 28 of the Customs Act, 1962.
- Whether a demand under Section 28 can be raised for a normal period without challenging the assessment in appeal.

Analysis:

The case involved an application for the waiver of pre-deposit of duty amounting to Rs. 65,81,210/- along with interest demanded by the Commissioner (Appeals). The appellants had imported computers, monitors, keyboards, and mouse and cleared them by filing 30 different bills of entry. They paid additional duty based on certain notifications. However, a show cause notice was issued stating that the CVD duty was payable at a higher rate and the exemption claimed by the appellants was not applicable to all the imported items. The demand was confirmed by the Commissioner (Appeals).

The main contention raised by the appellant was that the demand was made under Section 28 without first challenging the assessment order. The appellant referred to various legal precedents and circulars to support their argument that a demand under Section 28 cannot be raised for a normal period without challenging the assessment in appeal. They highlighted decisions by the Supreme Court and the Tribunal which emphasized the importance of challenging the assessment before raising a demand under Section 28.

On the other hand, the Departmental Representative argued that Section 28 is an independent provision for demanding duty in cases of short levy and that the department has the power to demand duty based on discrepancies in declarations or errors. They contended that the provisions of Section 28 should not be equated with refund provisions and that the department can issue show cause notices under Section 28 even without challenging the assessment.

After considering the submissions, the Tribunal noted that there have been conflicting views on whether a demand can be raised under Section 28 without challenging the assessment in appeal. While acknowledging the similarity between Section 11A of the Central Excise Act and Section 28 of the Customs Act, the Tribunal pointed out that Section 11A has been amended to empower the department to issue show cause notices even in cases where assessments have been made. However, no such change has been made in Section 28. The Tribunal decided to waive the pre-deposit of the duty and stay the recovery until the appeal is disposed of, indicating that the issue of whether Section 28 allows for a review of assessments will be considered in detail during the final hearing.