2016 (9) TMI 834 - AT - Customs

Rejection of refund claim - assessment - declared price - valuation - import of 24 consignments of Gambler - Duty Free Replenishment Certificate - Foreign Trade Policy - exemption of basic customs duty - lack of jurisdiction - Assistant Commissioner of Customs - alternative remedy of filing an appeal - section 128 of Customs Act, 1962 - section 27 of Customs Act, 1962 - rejection of declared value - rule 10A of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 - whether the Commissioner (Appeals) was within jurisdiction to reject the enhancement of the declared value? - Held that - the enhancement of assessable value by the assessing officer was without authority. That lacuna cannot be rectified by mere access to appellate remedies through a bill of entry as a cause of action. For the purposes of section 128 of Customs Act, 1962, however, assessment and adjudication , though different, are orders or decisions. Whether the first appellate authority was correct in restoring the refund claim to the jurisdictional competence of the original authority? - Held that - on the day of rejection of the refund claim, the original authority was not under instructions to disregard refund claims that were submitted without an appellate order setting aside the assessment. The original authority determined ineligibility for the refund claim without any recorded or acceptable rationale. The first appellate authority has, in accordance with the law as it then prevailed, set aside the rejection by the lower authority and restored the refund claim. The first appellate authority has erased the impediment by resolving the assessment dispute which was well within its jurisdiction to do so. That jurisdiction, even if deemed to have been exercised in the latest bill of entry, settles the principle that declared value could not have been rejected for assessment making it applicable to all assessments that preceded it - restoration of refund claim upheld - appeal dismissed - decided against Revenue.

Issues Involved:
1. Jurisdiction of the Commissioner (Appeals) to reject the enhancement of declared value.
2. Procedural and legal compliance in the enhancement of assessable value.
3. Legitimacy of the original authority’s rejection of the refund claim.
4. Correctness of restoring the refund claim to the jurisdictional competence of the original authority.

Detailed Analysis:

1. Jurisdiction of the Commissioner (Appeals) to Reject the Enhancement of Declared Value:
The primary issue was whether the Commissioner (Appeals) had the jurisdiction to reject the enhancement of the declared value. The appellate authority set aside the enhanced value in the assessment, noting that the importer was prevented from challenging the assessment due to the failure to furnish an appealable order as prescribed in rule 10A of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988. The appellate authority relied on previous decisions and the Customs Manual of Instruction to conclude that the lower authority was not without jurisdiction in deciding the refund claim, even without a separate quashing of the assessment. The Tribunal upheld this view, noting that the appellate authority’s jurisdiction to address the assessment dispute was valid and supported by the law.

2. Procedural and Legal Compliance in the Enhancement of Assessable Value:
The enhancement of the assessable value to US$ 1750 per MT was allegedly done without following the proper procedure laid out in the Customs Valuation Rules, 1988. The appellate authority found that the enhancement was procedurally flawed and lacked recorded evidence for doubting the declared value at the time of import. The Tribunal noted that the assessing officer did not comply with the required procedure to reject the declared value or to arrive at a new assessable value. The appellate authority’s finding on the impropriety of the enhancement was not contested on merit by the Revenue, leading to the conclusion that the enhancement was not legally sustainable.

3. Legitimacy of the Original Authority’s Rejection of the Refund Claim:
The original authority rejected the refund claim on the grounds of lacking jurisdiction to revisit a finalized assessment. However, this rejection was made without citing any statutory provision or case law to justify the conclusion. The Tribunal observed that the original authority disposed of the claim without placing the claimant on notice, which is against the principles of natural justice. The appellate authority pointed out that the original authority’s alienation of jurisdiction was unsustainable and restored the refund claim. The Tribunal upheld this restoration, noting that the original authority’s rejection was without any recorded or acceptable rationale.

4. Correctness of Restoring the Refund Claim to the Jurisdictional Competence of the Original Authority:
The appellate authority restored the refund claim to the jurisdictional competence of the original authority, which was contested by the Revenue. The Tribunal observed that the original authority had alienated its jurisdiction without valid grounds and that the appellate authority’s decision to restore the refund claim was in accordance with the law as it prevailed at the time. The Tribunal also noted that the subsequent decision of the Hon’ble Supreme Court and the circular no. 24/2004-Cus dated 18th March 2004 supported the appellate authority’s jurisdiction to resolve the assessment dispute, thereby legitimizing the restored refund claim.

Conclusion:
The Tribunal dismissed the appeal of the Revenue, upholding the appellate authority’s decision to set aside the enhancement of the declared value and to restore the refund claim. The Tribunal found that the appellate authority had the jurisdiction to address the assessment dispute and that the original authority’s rejection of the refund claim was without valid grounds. The Tribunal concluded that the restored refund claim was proper and required the competent authority under section 27 of the Customs Act, 1962, to grant the relief accordingly.

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