2013 (1) TMI 254 - AT - Customs

Differential duty arising as a result of finalisation of provisional assessment - Imported non-coking steaming coal - Sample was tested and the same was found to have Gross Calorific Value (GCV) higher than the declared GCV - Purchase contract had a price variation clause - Assessment was finalised for higher duty adopting higher price proportionate to higher GCV - Bills of entry were finally assessed, simultaneously on the very same day show-cause notice was issued to the appellant Held that - Bill of Entry has to be assessed and returned to the importer. Further Section 47 of Customs Act, 1962, an importer is required to pay duty within 5 days from the date on which the bill of entry is returned to him for payment of duty and interest becomes payable thereafter. It can also said that in this case the bills of entry were returned with the remarks so that differential duty as and when adjudicated and approved, it would become payable by taking date of return of all bills of entry as the date of finalisation. In this case the bills of entry have been returned and simultaneously the show-cause notice has been issued. If the importer accepts the revision of assessment and differential duty is payable, he can pay the same immediately and in that case no further proceedings are required. Appellant submitted that if he were to challenge the bills of entry assessment order, that also would have been rejected on the ground that the show-cause notice has been issued giving an opportunity to challenge revision of value and differential duty. Even though the Superintendent put the remarks that the bill of entry is assessed finally, he issued the show-cause notice proposing to give an opportunity to challenge the differential duty and merits thereof. This would mean that the assessment was finalised subject to the show-cause notice. This is the only proper and legal interpretation of the proceedings in this case. In view of above discussions, we find that the impugned order taking a view that the assessment is final and therefore the show-cause notice and further proceedings initiated were unwarranted and therefore was invalid cannot be sustained. In favour of assessee

Summary

Issues:
1. Finalization of provisional assessment and subsequent demand of differential duty.
2. Validity of show-cause notice issued after finalization of assessment.
3. Interpretation of Customs Act provisions regarding payment of duty.

Analysis:
1. The case involved the appellant importing non-coking steaming coal under 8 bills of entry, provisionally assessed with a price variation clause. Upon testing, the Gross Calorific Value (GCV) was found higher than declared, leading to finalization of assessment for higher duty. The Revenue filed an appeal against the dropping of proceedings by the Assistant Commissioner, arguing that the differential duty became payable as assessment was final. The Tribunal examined whether the differential duty was validly demanded post finalization of assessment.

2. The appellant contended that the show-cause notice, issued the same day as finalization, provided an opportunity to challenge the differential duty. The Tribunal noted that the notice under Section 18(2) of the Customs Act proposed recovery of differential duty, indicating an intent to allow the appellant to contest the duty amount. The show-cause notice's language suggested the differential duty was to be finalized post-adjudication, aligning with the Customs Act provisions on duty payment timelines.

3. The Tribunal emphasized that the assessment's finalization, coupled with the show-cause notice, did not necessitate immediate challenge by the importer. The Superintendent's remarks on final assessment did not preclude the appellant from contesting the differential duty. The legal interpretation favored allowing the appellant to challenge the duty post-show-cause notice issuance. Consequently, the Tribunal held that the impugned order deeming the assessment final and the notice invalid was unsustainable, allowing the appeal with relief to the appellant as per legal provisions.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Ahmedabad highlights the key issues, arguments presented by both sides, and the Tribunal's comprehensive reasoning leading to the decision.