2018 (12) TMI 389 - AT - Customs

Valuation of imported goods - enhancement of value on the basis of contemporary imports - assessment for bills of entry - Section 17(5) of the Customs Act, 1962 - Held that - As per the provision of Section 17(5) of the Act, in the case of reassessment under Section 17(4) of the Act, where valuation of the goods has been enhanced, the adjudicating authority is required to pass a speaking order within 15 days of the assessment of the bills of entry. In Section 17(5) of the Act, there is no whisper about that the assessee is required to make a request or to seek the order under Section 17(5) of the Act - in the case the issue involved of classification, exemption, concession or valuation and the value has been enhanced or assessment done in terms of Section 17(4) of the Act, the adjudicating authority is required to pass a speaking order under Section 17(5) of the Act within 15 days of the assessment of the bills of entry. Admittedly, in this case, the same has not been done. Appeal dismissed - decided against Revenue.

Summary

Issues:
- Enhancement of value of goods based on contemporary imports
- Requirement of passing a speaking order under Section 17(5) of the Customs Act, 1962
- Interpretation of Section 17(5) regarding reassessment and passing of speaking order
- Comparison with relevant case laws

Analysis:

The case involved the respondent filing 35 bills of entry for clearance of polyester fabrics, where the value of goods was enhanced based on contemporary imports. The respondent consented to the enhancement of value, paid the duty, and cleared the goods. Subsequently, the assessment was challenged before the Ld. Commissioner (Appeals) on the grounds of no speaking order being passed by the adjudicating authority under Section 17(5) of the Customs Act, 1962. The Ld. Commissioner (Appeals) set aside the order of enhanced value due to the absence of a speaking order, leading to the Revenue appealing the decision.

The Revenue argued that since the respondent accepted the enhanced value based on contemporary imports, no speaking order was necessary under Section 17(5) of the Act. It was contended that as the respondent did not seek a speaking order, one was not required to be passed by the adjudicating authority. The Revenue relied on judgments from previous cases to support their stance.

On the other hand, the Ld. Counsel for the respondent supported the impugned order, leading to a detailed hearing of arguments from both sides. The Tribunal examined Section 17(5) of the Act, emphasizing that in cases of reassessment where valuation is enhanced, a speaking order must be passed within 15 days. The Tribunal noted that the provision does not mandate the assessee to request the order, and if valuation is enhanced, a speaking order is necessary. In this case, the speaking order was not issued within the stipulated time.

The Tribunal reviewed the judgments cited by the Revenue and found them irrelevant to the current case as they did not address the requirement of passing an order under Section 17(5) of the Act within 15 days of assessment. The Ld. Commissioner (Appeals) had based the impugned orders on various judicial pronouncements emphasizing the necessity of a speaking order under Section 17(5) of the Act post-assessment.

Ultimately, the Tribunal upheld the impugned orders, finding no fault with them, and dismissed the stay applications and appeals filed by the Revenue. The decision was based on the requirement of passing a speaking order under Section 17(5) within the specified timeframe after assessment of bills of entry, which was not fulfilled in this case.