2022 (2) TMI 154 - HC - Customs

Court quashes order, emphasizes right to be heard, upholds application under Customs Act.

The Court quashed the impugned order and remitted the case for a fresh decision on its merits, emphasizing the petitioner's right to be heard. The ... Violation of principles of natural justice - appeal against communication: computation of limitation under Section 128 of the Customs Act, 1962 - power to amend bill of entry under Section 149 of the Customs Act, 1962 - remand for de novo considerationAppeal against communication: computation of limitation under Section 128 of the Customs Act, 1962 - The dismissal of the appellant's appeal as time-barred by treating it as an appeal against original assessments was unsustainable. - HELD THAT: - The Court found that the petitioner had filed an appeal against the communication dated 21.07.2020 and not directly against each original bill of entry. Section 128 provides a 60-day limitation period from the date of communication of a decision or order by a lower officer, with an additional period under the proviso where sufficient cause is shown. The Commissioner (Appeals) rejected the petitioner's appeal on the ground that change of classification should have been sought within three months of assessment and therefore the appeals were time barred. The High Court held that dismissal on that limitation premise could not stand in respect of the appeal against the impugned communication, which was filed within the prescribed time from that communication, and therefore the impugned order cannot be sustained on the limitation ground. [Paras 16, 18, 19]Impugned order dismissing the appeal as time-barred is quashed insofar as it rejects the appeal filed against the communication dated 21.07.2020.Violation of principles of natural justice - power to amend bill of entry under Section 149 of the Customs Act, 1962 - The third respondent's disposal of the Section 149 applications without affording a personal hearing amounted to a breach of principles of natural justice. - HELD THAT: - The Court noted that the third respondent disposed of the petitions under Section 149 by a communication dated 21.07.2020 without calling the petitioner for a personal hearing or issuing a show-cause notice as to why the applications should not be rejected. The High Court held that the third respondent ought to have afforded an opportunity of hearing before rejecting the applications, and that this procedural omission vitiated the decision-making process in relation to the Section 149 requests. [Paras 16, 17, 18]The communication rejecting the Section 149 applications without hearing is liable to be set aside for breach of natural justice.Remand for de novo consideration - power to amend bill of entry under Section 149 of the Customs Act, 1962 - The matter is remitted to the Commissioner (Appeals) for fresh, merits-based consideration including affording the petitioner an opportunity to be heard on whether amendment under Section 149 is permissible and any consequential relief. - HELD THAT: - Having found procedural infirmity and that the appeal against the communication was wrongly dismissed on limitation grounds, the Court declined to express any opinion on the substantive merits of whether the bills of entry were amendable under Section 149. Instead, the Court quashed the impugned appellate order and remitted the matter to the second respondent to decide the appeal on merits after hearing the petitioner, permitting de novo consideration in accordance with law and relevant precedents invoked by the parties. [Paras 18, 19, 20]Impugned order quashed and case remitted to the Commissioner (Appeals) to decide the appeal on merits after affording an opportunity of hearing; petitioner to be heard.Final Conclusion: Writ petition allowed to the extent that the impugned appellate order is quashed for breach of natural justice and improper reliance on limitation; matter remitted to the Commissioner (Appeals) for fresh adjudication on merits after hearing the petitioner. No costs. Issues:1. Entitlement to file an application under Section 149 of the Customs Act, 1962 for amending the Bill of Entry.2. Classification of Antennas for Base Transmission Station.3. Time limitation for filing appeals under Section 128 of the Customs Act, 1962.4. Violation of principles of natural justice in passing orders.5. Alternative remedy before the Tribunal under Section 129A of the Customs Act, 1962.Analysis:1. The petitioner imported Antennas for Base Transmission Station and initially classified them under Customs Tariff Sub-Heading 85.17.62.90. The department insisted on a different classification, resulting in higher custom duty. The petitioner sought to amend the Bill of Entry under Section 149 of the Customs Act, 1962 based on a Tribunal decision related to a similar issue with another importer, M/s.Reliance Jio Infocom Ltd.2. The Tribunal's decision prompted the petitioner to file for a refund of customs duty paid under protest for earlier imports. Subsequently, the petitioner filed applications under Section 149 of the Customs Act, 1962 to amend the Bill of Entries filed between December 2018 to March 2019. The Commissioner of Customs (Appeals) rejected the appeal, citing time limitations under Section 128 of the Customs Act, 1962.3. The rejection of the appeal was based on the argument that the appeal for classification change should have been filed within three months from the date of assessment, which was not done in this case. The petitioner contested this decision, highlighting the acknowledgment of the appeal filing date and the need for a fair hearing before dismissing the appeal solely on the grounds of time limitation.4. The petitioner argued that the impugned order was passed in violation of principles of natural justice, emphasizing the need for a proper hearing and consideration of the merits of the case. The Court agreed, noting that the appeal should have been decided on its merits, especially considering the Tribunal's decision favoring the petitioner's classification stance.5. The respondent suggested that the petitioner had an alternative remedy before the Tribunal under Section 129A of the Customs Act, 1962. However, the Court found the dismissal of the appeal by the second respondent unjustified and lacking proper consideration of the petitioner's entitlement to appeal against the communication dated 21.07.2020. The impugned order was quashed, and the case was remitted back for a fresh decision on its merits, ensuring the petitioner's right to be heard.