2008 (7) TMI 633 - AT - Customs

Tribunal grants out-of-turn hearing, directs disposal based on correct classification

The Tribunal allowed the out of turn hearing for Appeal No. C/729/08 regarding the mis-classification of a 'Vertical Automated Storage and Retrieval ... Appeal to Appellate Tribunal - Bill of Entry - Amendment after assessment ISSUES PRESENTED AND CONSIDERED 1. Whether the appeal should be heard out of turn where the appellant alleges recurring mis-classification of imported goods in the bill of entry. 2. Whether Sections 149 and 154 of the Customs Act, 1962 permit amendment/correction of a bill of entry and rectification of an inadvertent clerical/error in classification after assessment and clearance under RMS. 3. Whether finality of assessment (absence of appeal against the assessed bill of entry) bars invocation of Sections 149 and 154 or requires the remedy to be limited to an appeal/reassessment for correction of classification. ISSUE-WISE DETAILED ANALYSIS Issue 1: Out-of-turn hearing Legal framework: The Tribunal controls its own procedure and may allow out-of-turn hearing in appropriate cases where urgent or recurring issues merit expedited disposal. Interpretation and reasoning: The Tribunal accepted the applicant's representation that identical goods had been and would be imported repeatedly and that an unresolved classification question would continue to affect subsequent consignments. Given the prospective and recurring impact of the disputed classification, the Tribunal found sufficient reason to hear the appeal out of turn. Ratio vs. Obiter: Ratio - where a classification dispute affects present and future consignments and the importer demonstrates repetition, out-of-turn hearing is justified to avoid recurring incorrect treatment. Conclusion: Application for out-of-turn hearing allowed and appeal taken up for disposal. Issue 2: Applicability of Sections 149 and 154 for amendment/correction of bill of entry post-clearance Legal framework: Section 149 permits amendment of documents (including bill of entry) even after clearance where amendable on the basis of documents existing at the time of clearance; Section 154 permits correction of clerical mistakes or errors apparent on the face of the record. Precedent treatment: The Tribunal relied on earlier Tribunal orders (including I.P. Rings, Senka Carbon, Brakes India and a directly analogous Tribunal order) holding that Section 149 can be invoked for reassessment/rectification and to permit refund subject to unjust enrichment inquiry. Larger Bench authority cited by revenue was noted not to have considered Section 149 and thus was not decisive against invoking Section 149. Interpretation and reasoning: The Court noted that the assessing authority did not consider Sections 149 and 154 and that under RMS there is no internal mechanism to correct a bill of entry after clearance. Where an inadvertent mistake is alleged in the bill of entry (e.g., wrong chapter heading number leading to mis-classification), the correct course is for the adjudicating authority to consider the request under Sections 149/154 and pass a speaking order rather than reject the request on the basis that assessment has attained finality without appreciating these provisions. Ratio vs. Obiter: Ratio - Sections 149 and 154 are available remedies to seek amendment/correction of a bill of entry and must be considered by the adjudicating authority even after clearance under RMS; the authority must give an opportunity for personal hearing and decide the request on merits. Obiter - comparative discussion of larger bench authority which did not consider S.149; remark that invocation of S.149 would permit consequential refund subject to unjust enrichment test. Conclusion: The Tribunal held that the adjudicating authority should re-examine the request under Sections 149 and 154, grant personal hearing, and consider amendment/correction of the bill of entry if warranted by the documents and law. Issue 3: Finality of assessment and the proper remedy where no appeal against assessment was filed Legal framework: Principles of finality of assessment recognise that an assessed and cleared bill of entry ordinarily attains finality unless challenged by statutory appeal; however, statutory provisions permitting amendment/correction remain relevant. Precedent treatment: Authorities (including Supreme Court decisions cited by the Revenue) emphasize finality where no appeal is filed. Tribunal authorities, however, have simultaneously held that Section 149 allows amendment/reassessment in appropriate cases despite clearance. Interpretation and reasoning: The Tribunal reconciled the tension by observing that finality of assessment does not preclude invocation of express statutory powers of amendment/correction found in Sections 149 and 154. The adjudicating authority erred in treating finality as an absolute bar and failing to consider the appellant's express request for amendment under the statutory provisions. The availability of Section 149 to correct genuine inadvertent mistakes was treated as a distinct statutory remedy separate from the remedy of appeal against assessment. Ratio vs. Obiter: Ratio - Finality of assessment does not oust the statutory power under Sections 149/154 to correct/amend a bill of entry where an inadvertent mistake is established; the adjudicating authority must consider and decide such a request rather than decline on the ground of finality alone. Conclusion: The adjudicating authority's rejection based on finality was set aside; the matter remitted for fresh consideration under Sections 149 and 154 with opportunity for personal hearing and evidence to be marshalled as at the time of import. Relief and consequential direction (operative conclusion) Without expressing an opinion on the merits of the classification dispute, the Tribunal set aside the impugned order and remitted the matter to the adjudicating authority to reconsider the request under Sections 149 and 154, to grant personal hearing, to permit the appellant to place original documents available at the time of import, and to dispose of the issue expeditiously; any consequential refund, if allowed, will remain subject to the test of unjust enrichment.