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2024 (7) TMI 488 - AT - Customs100% EOU - Validity of SCN - without challenging the assessment (review of the decisions made while allowing credit of duty) the Department cannot issue a Show Cause Notice demanding duty - HELD THAT -The foremost contention put forward by the appellant is that the Show Cause Notice issued is ab-initio-void for the reason that the permission granted by the Assistant Commissioner allowing to take recredit of the duty foregone at the time of import of inputs being an order of assessment ought to have been challenged by the Department. The Ld. Counsel has relied upon the decision of the Hon ble Apex Court in the case of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV 2019 (9) TMI 802 - SUPREME COURT where it was held that ' the claim for refund cannot be entertained unless the order of assessment or self-assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self-assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act.' The matter requires to be remanded to the Adjudicating Authority for fresh consideration. In such denovo proceedings, the Adjudicating Authority shall give opportunity for personal hearing and to adduce evidence - appeal allowed by way of remand.
Issues Involved:
1. Validity of the Show Cause Notice without challenging the assessment. 2. Compliance with conditions of Notification No. 52/2003-Cus and Foreign Trade Policy. 3. Quantification of duty considering opening stock. 4. Appropriation of payments made by the appellant. 5. Imposition of penalty under Section 117 of the Customs Act, 1962. Issue-wise Detailed Analysis: 1. Validity of the Show Cause Notice without challenging the assessment: The appellant argued that the Show Cause Notice (SCN) is ab-initio void because the Department did not challenge the quasi-judicial decision of the Assistant Commissioner allowing recredit of duty foregone. The appellant relied on the Supreme Court's judgment in ITC Ltd. Vs. Commissioner of Central Excise, Kolkata, which held that any order of self-assessment is an assessment and must be appealed if found erroneous. The Department countered that the permission to recredit was not an assessment but a procedural compliance without application of mind. The Tribunal noted that this contention was not considered by the Adjudicating Authority, necessitating a remand for fresh consideration. 2. Compliance with conditions of Notification No. 52/2003-Cus and Foreign Trade Policy: The Department alleged that the appellant violated the conditions of Notification No. 52/2003-Cus by clearing goods into the Domestic Tariff Area (DTA) without paying customs duty. The appellant admitted non-payment but argued that the Department's proceeding for recovery was unsustainable without challenging the prior assessments. The Tribunal emphasized that the Assistant Commissioner's permissions were quasi-judicial decisions requiring review if found erroneous, which was not done. 3. Quantification of duty considering opening stock: The appellant claimed an opening stock of 19.56 Tons of inputs as of 01.07.2017, which was not considered in the duty quantification. The Tribunal found that this aspect, along with the proof provided by the appellant, was overlooked by the Adjudicating Authority, warranting a re-evaluation. 4. Appropriation of payments made by the appellant: The appellant contended that they paid Rs.2,17,00,000/- towards the disputed liability and an additional Rs.49,00,000/- for the period from January 2019 onwards. However, the impugned order appropriated Rs.2,51,00,000/-. The Tribunal acknowledged this discrepancy and directed a reassessment of the payments made. 5. Imposition of penalty under Section 117 of the Customs Act, 1962: The appellant argued that Notification No. 52/2003-Cus does not provide for penalties for clearing goods into DTA using imported raw materials. They contended that the execution of the bond was a remedial measure, not a punitive one. The Tribunal did not provide a specific ruling on this issue but included it in the remand for fresh consideration. Conclusion: The Tribunal set aside the impugned order and remanded the matter to the Adjudicating Authority for fresh consideration. The Adjudicating Authority is directed to provide an opportunity for personal hearing, consider all contentions, and render findings on each issue. The appeal is allowed by way of remand.
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