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TMI Blog2016 (9) TMI 834X X X X Extracts X X X X X X X X Extracts X X X X ..... ctional 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. - C/762/2004 - A/89038/16/CB - Dated:- 2-8-2016 - Shri M V Ravindran, Member (Judicial) and Shri C J Mathew, Member (Technical) Shri M.K. Mall, Asstt. Commissioner (AR) for the appellant Shri N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laid out the lack of justification for enhancement by pointing out the non-compliance with the procedure in the said Rules for re-determination and, in particular, to the repeated refusal to furnish reasons for rejecting the declared value. In the circumstances, it may not be out of place to refer to the rule in question: 10A. Rejection of declared value. (1) When the proper officer has reason to doubt the truth or accuracy of the value declared in relation to any imported goods, he may ask the importer of such goods too furnish further information including documents or other evidence and if, after receiving such information or in the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed that the value of such imported goods cannot be determined under the provisions of sub-rule (1) of rule 4. (2) At the request of the importer, the proper officer, shall intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to goods imported by such importer and provide a reasonable opportunity of being heard, before ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Hon ble Supreme Court in re M/s Super Cassette Industries [2003 (58) RLT F9], M/s Motilal Dulchand [2003 (157) ELT A265] and M/s HCL Perot Systems Ltd v. Commissioner of Customs, New Delhi [dated 6th October 2003 in CAD no. 13751/ 2003], has instructed field formations not to allow refund claims except as consequential relief on successful challenge to assessment orders. 7. We take notice that the impugned order has restored the claim for refund by setting aside the rejection and has, concurrently, resolved the assessment in favour of M/s Goodwill Sales Pvt Ltd by setting aside the enhancements in the bill of entry. Both Learned Authorised Representative and Learned Counsel presented their respective arguments in support of and against the appeal of Revenue. The factual matrix that emerges is that the refund claim was filed to resolve the dispute on the assessment of gambier and that the imported goods had been subjected to enhancement in value without following the procedure laid down in the Customs (Determination of Value of Imported Goods) Rules, 1988 to reject the declared value or in arriving at the assessable value. It is also not disputed in the review of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms Act, 1962 as: (2) asssessment includes provisional assessment, re-assessment and any order of assessment in which the duty assessed is nil Assessment re-assessment and provisional assessment are actions enumerated in sections 17 and 18 of Customs Act, 1962 and is the crystalisation of duty liability under these provisions. Imported goods are allowed to be cleared for home consumption on payment of duty as assessed. Likewise, export goods are allowed to be cleared for loading on payment of duty as assessed. From this it can be surmised that assessment is the stage immediately preceding removal from custody under the Customs Act, 1962. There is no definition of adjudication order in the Customs Act, 1962 which has, however, defined adjudicating authority in section 2(1) thus: (2) adjudicating authority means any authority competent to pass any order or decision under the Act, but does not include That the importer was entitled to due process, we note from the provisions of the Customs Manual of Instructions which instructs: 14. The principles of natural justice are also required to be followed in valuation matters. When ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowances for the wariness displayed, without any substantiation, by the original authority in according sanction to the claim for refund in the absence of challenge to the assessment itself, we note with disapproval that the claim has been disposed off without placing the claimant on notice. The scheme of section 27 of Customs Act, 1962 empowers the Assistant Commissioner to sanction the refund, subject to his satisfaction, by transfer of the amount to the Fund or by releasing it to the claimant. Admittedly, it does not prescribe issue of a show cause notice but it does admit to disallowing of claims that are not to the satisfaction of the authority. It is settled law that claim may be rejected and, concomitantly, settled law insists that detriment cannot be visited upon a tax-payer without prior notice. No such notice was issued by the Assistant Commissioner of Customs ever. Though we observe that he has recorded waiver of right to notice by the claimant, the circumstances of this waiver are not recorded and it is reasonable to deduce that the claimant may not, in the most pessimistic of moods, have imagined that the claim would be rejected. Had the claimant been aware that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of justice based on hierarchy of authorities. 10. Coming to the question that is raised there is little scope for doubt that in a case where an adjudicating authority has passed an order which is appealable under the statute and the party aggrieved did not choose to exercise the statutory right of filing an appeal, it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing his order. If this position is accepted then the provisions for adjudication in the Act and the Rules, the provision for appeal in the Act and the Rules will lose their relevance and the entire exercise will be rendered redundant. This position in our view, will run counter to the scheme of the Act and will introduce an element of uncertainty in the entire process of levy and collection of excise duty. Such a position cannot, be countenanced. The view taken by us also gain support from the provision in sub-rule (3) of Rule 11 wherein it is laid down that where as a result of any order passed in appeal or revision under the Act, refund of any dut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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