2025 (4) TMI 1073 - AT - Customs

Refund - Reassessment of Bill of Entry - clerical error/mistake in the B/E as the appellant has mistakenly mentioned particulars of invoice dated 19.11.2019 instead of invoice dated 22.11.2019 in the Bill of Entry No. 5793005 dated 22.11.2019 - HELD THAT - The law on this issue has already been settled by the Hon ble High Court of Judicature at Bombay in the matter of DIMENSION DATA INDIA PRIVATE LTD. VERSUS COMMISSIONER OF CUSTOMS AND ANR. 2021 (1) TMI 1042 - BOMBAY HIGH COURT in which the Hon ble High Court while referring the law laid down by the Hon ble Supreme Court in the matter of ITC Ltd. 2019 (9) TMI 802 - SUPREME COURT (LB) has held that in the ITC decision the Hon ble Supreme Court has clarified that in case any person is aggrieved by an order which would include an order of re-assessment he has to get the order modified u/s. 128 or under other relevant provisions of the Customs Act before he makes a claim for refund. This is because as long as the order is not modified the order remains on record holding the field and on that basis no refund can be claimed. The Hon ble High Court has also held that in ITC decision (supra) the Hon ble Supreme Court has not confined modification of the order through the mechanism of Section 128 only and it has been clarified therein that such modification can be done under other relevant provisions of the Customs Act also which would include Section 149 and Section 154 of the Customs Act. The reliance placed by the learned commissioner on the decision of the Hon ble Supreme Court in the matter of ITC for coming to the conclusion that the assessment order has to be challenged by the importer in appellate forum and reassessment be done afterwards in commensurate with the order of the Appellate Authority is also misplaced as in the light of the decision of the Bombay High Court in which the ITC decision has been explained by observing that even the order of self-assessment can also be modified u/s. 149 ibid. Conclusion - The proviso to Section 149 does not prohibit amendment of a Bill of Entry after clearance of goods if such amendment is based on documentary evidence which was in existence at the time the goods were cleared. The issue involved herein is no longer res integra and learned Commissioner (Appeals) is not justified in setting aside the Order of re-assessment dated 5.2.2020 and the Order-in-Original dated 5.3.2020 passed by the respective lower authorities - appeal allowed.

Summary

The core legal question considered by the Tribunal is whether the re-assessment of the Bill of Entry under Section 149 of the Customs Act, 1962 was rightly done by the lower authority or whether the importer was required to challenge the original self-assessment before the appellate authority under Section 128, making the re-assessment invalid in the absence of such appeal. This central issue encompasses related sub-questions including the applicability and scope of Sections 128 and 149 of the Customs Act, the permissibility of amendment of a Bill of Entry after clearance of goods, and the entitlement to refund of excess customs duty paid without prior appellate modification of the assessment order.

Another significant issue involves the interpretation of the proviso to Section 149 concerning amendments post-clearance of goods, and whether the amendment in the present case constituted a permissible correction of clerical error based on documentary evidence existing at the time of clearance, or an impermissible post-clearance modification. The Tribunal also examined the relevance and applicability of judicial precedents, including the Supreme Court decision in ITC Ltd. and the High Court decisions in Terra Films Pvt. Ltd. and Dimension Data India Pvt. Ltd., in determining the proper procedural route and validity of the re-assessment and refund claim.

Regarding the first issue of the legality of re-assessment under Section 149 after clearance of goods, the Tribunal analyzed the statutory provisions in detail. Section 149 empowers the proper officer to amend any customs document presented in the customs house within prescribed time and conditions, but the proviso restricts such amendments after clearance of goods to those based on documentary evidence existing at the time of clearance. The revenue and the first appellate authority contended that since the goods had been cleared and were not available for physical verification, no amendment was permissible under Section 149, rendering the reassessment void. They relied on the proviso to Section 149 and the decision of the Delhi High Court in Terra Films Pvt. Ltd., which emphasized that amendments after export clearance require documentary evidence and physical verification, and disallowed amendments amounting to conversion of export schemes rather than mere clerical corrections.

The Tribunal distinguished the facts of Terra Films, noting that the case there involved a request for conversion between export schemes after a long period, not a simple clerical amendment supported by contemporaneous documentary evidence. In the present case, the amendment was a correction of an inadvertent clerical error in the Bill of Entry concerning the invoice number and corresponding customs duty, supported by documentary evidence available at the time of clearance. Thus, the Tribunal held the proviso to Section 149 did not bar such amendment and reassessment.

On the second issue concerning the necessity of appellate challenge under Section 128 before claiming refund or effecting reassessment, the Tribunal examined the Supreme Court ruling in ITC Ltd., which held that an order of self-assessment is appealable under Section 128 and that a refund claim cannot be entertained unless the assessment order is modified through appropriate proceedings, including appeal. Revenue argued that the importer should have first challenged the self-assessment order before the Commissioner (Appeals) under Section 128, and only thereafter could reassessment and refund be granted. The first appellate authority accepted this view, setting aside the reassessment and refund orders for lack of appellate modification.

The Tribunal, however, relied on the subsequent decision of the Bombay High Court in Dimension Data India Pvt. Ltd., which clarified and interpreted the ITC decision. The High Court held that modification of an assessment order can be effected not only through appeal under Section 128 but also under other relevant provisions such as Sections 149 and 154 of the Customs Act. The High Court emphasized that amendment of documents under Section 149 and correction of clerical or arithmetical mistakes under Section 154 are distinct from appellate jurisdiction under Section 128, and that the same officer or equivalent rank has power to amend or correct orders without necessitating appeal. The High Court further held that amendment of a Bill of Entry after clearance is permissible if based on documentary evidence existing at the time of clearance, enabling consequential reassessment and refund claims.

Applying this legal framework to the facts, the Tribunal found that the importer had made a bona fide request for correction of a clerical error in the Bill of Entry, supported by documentary evidence, and the reassessment and refund orders were passed in accordance with Sections 149 and 154. The Tribunal rejected the revenue's contention that the importer was required to first challenge the self-assessment order under Section 128 before seeking reassessment and refund. It held that the reassessment under Section 149 was valid and that the refund claim was maintainable on this basis.

The Tribunal also examined the factual matrix concerning the two invoices and corresponding Bills of Entry, noting that the importer had mistakenly paid customs duty for 20 pallets under one invoice instead of 10 pallets under the correct invoice. The reassessment corrected this error, reducing the duty payable and entitling the importer to a refund of excess duty paid. The Tribunal found no merit in the revenue's argument that the amendment was impermissible post-clearance, as the documentary evidence existed at the time of clearance and the amendment was a mere clerical correction, not a substantive conversion or alteration of the Bill of Entry's character.

In addressing the competing arguments, the Tribunal gave due consideration to the revenue's reliance on the ITC Supreme Court decision and the first appellate authority's order but found the subsequent High Court ruling in Dimension Data India Pvt. Ltd. to be more directly on point and clarifying the scope of Sections 149 and 128. The Tribunal emphasized that the power of amendment under Section 149 is discretionary but exercisable to correct inadvertent errors supported by documentary evidence, even after clearance, and that such amendments facilitate proper reassessment and refund without the necessity of prior appellate modification under Section 128.

Consequently, the Tribunal concluded that the reassessment order dated 5.2.2020 and the refund order dated 5.3.2020 were valid and lawful, and that the impugned order of the Commissioner (Appeals), which set aside these orders, was not justified. The appeals filed by the importer were therefore allowed, and the impugned appellate order was set aside.

The Tribunal's significant holdings include the following:

"The proviso to Section 149 does not prohibit amendment of a Bill of Entry after clearance of goods if such amendment is based on documentary evidence which was in existence at the time the goods were cleared."

"The power to amend documents under Section 149 and to correct clerical or arithmetical mistakes under Section 154 is distinct from the appellate jurisdiction under Section 128, and such amendments can be effected by the same officer who passed the initial order or an officer of equivalent rank without necessitating prior appellate modification."

"In light of the decision in Dimension Data India Pvt. Ltd., the Supreme Court's ruling in ITC Ltd. does not confine modification of assessment orders to the appellate process under Section 128 alone; modification can also be effected under other relevant provisions of the Customs Act including Sections 149 and 154."

"A refund claim cannot be entertained unless the order of assessment or self-assessment is modified in accordance with law; however, such modification need not be exclusively through appeal but can be through lawful amendment under Sections 149 and 154."

"The reassessment and refund orders passed in the present case, correcting a clerical error in the Bill of Entry supported by documentary evidence existing at the time of clearance, are valid and lawful."

Accordingly, the Tribunal set aside the impugned appellate order and upheld the reassessment and refund orders passed by the lower authorities.