2009 (6) TMI 557 - AT - Customs

Demand- The appellants have set up a power generation plant based on a Non-conventional energy source at Sri Ganganagar, Rajasthan and for that purpose the appellants imported a Steam Turbine vide Bill of Entry dated 19-2-2003, under Project Imports, and the Bill of Entry was provisionally assessed under Heading No. 98.01 and the same was sought to be finalised on 25-2-2004. The provisional assessment was resorted for the purpose of seeking post importation evidence of installation of the said goods at the site and was finalized after the required installation certificate was produced before the Deputy Commissioner of Customs. Held that- the final assessment in the matter was to be completed, the question of resorting to recovery of the alleged dues cannot arise and in that regard the appellants are justified in contending that merely on the basis of order dated 5-8-05 passed by the Commissioner (Appeals), the Department could not have taken steps to recover the dues.The impugned order is hereby set aside along with consequential relief. The appeal accordingly stands disposed of.

Summary

Issues Involved:
Failure to comply with provisions of law before recovering alleged short levy duty.

Detailed Analysis:

1. The appellants challenged an order passed by the Commissioner of Customs (Appeals) on various grounds, focusing on the failure of authorities to comply with the law before recovering the alleged short levy.

2. The appellants imported a Steam Turbine for a power generation plant in Rajasthan under Project Imports, provisionally assessed under Heading No. 98.01. The finalization of the import was reviewed by the Commissioner of Customs, who authorized the Department to file an appeal. The Commissioner (Appeals) later held the goods liable to CVD, leading to a dispute over differential duty.

3. The Department issued a Less Charge Notice under Sec. 28 of the Customs Act to recover the alleged duty. The appellants contested, arguing that proper proceedings under Sec. 28 were not initiated. They cited legal precedents to support their contention that the Commissioner (Appeals) did not take further steps after setting aside the assessment order.

4. The Department argued that setting aside the final assessment order by the Commissioner (Appeals) did not prohibit them from taking action under Sec. 28. However, the records showed that no further directions were issued by the Commissioner (Appeals) to finalize the assessment after setting it aside.

5. The Tribunal found that the Commissioner (Appeals) did not make efforts to finalize the assessment after setting aside the order, as required by Sec. 128A. Therefore, the Department could not proceed directly under Sec. 28 to recover the alleged dues without completing the final assessment.

6. The Tribunal held that since the final assessment was incomplete, the Department could not resort to recovery of dues based solely on the Commissioner (Appeals) order. The appeal succeeded on this ground, and the impugned order was set aside with consequential relief.

7. The decision did not prevent the Department from taking appropriate steps in accordance with the law, emphasizing the importance of following due process in recovery proceedings.

8. The appeal was disposed of in favor of the appellants, highlighting the necessity of completing the final assessment before initiating recovery actions under the Customs Act.