2023 (4) TMI 671 - AT - Customs

Jurisdiction of Deputy Commissioner to reopen customs assessment after clearance is limited; reassessment post-clearance invalidated and refund claims unsustainable.

The note addresses whether a Deputy Commissioner may review or reassess a customs assessment after goods have been permitted for home consumption. It ... Jurisdiction of the Deputy Commissioner to reopen the assessment order and review its own order - admissibility of the refund claims - import of Aluminum Scrap Mix (Tense and TT grade) weighing 24.980 MT from Benin which were classifiable under chapter heading 76020010 - it is found that declared value to be on the lower side as compared to the price available for similar product being imported by other importers - HELD THAT:- The basic question in the present appeal revolves around the jurisdiction exercised by the adjudicating authority in reviewing its own order. The said issue has already been decided by the Apex Court in the case of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV [2019 (9) TMI 802 - SUPREME COURT] relying on the decisions in COLLECTOR OF CENTRAL EXCISE, KANPUR VERSUS FLOCK (INDIA) PVT. LTD. [2000 (8) TMI 88 - SUPREME COURT] where it was held that Re-assessment is permitted only under Section 17(3)(4) and (5) of the amended provisions. Similar was the position prior to the amendment. It will virtually amount to an order of assessment or re-assessment in case the Assistant Commissioner or Deputy Commissioner of Customs while dealing with refund application is permitted to adjudicate upon the entire issue which cannot be done in the ken of the refund provisions under Section 27. Following the ratio in the case of ITC, this Bench in a recent decision of M/S HOLY LAND MARKETING PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS, NEW DELHI [2023 (2) TMI 46 - CESTAT NEW DELHI], in categoric terms held that once an order permitting clearance of goods for home consumption is issued there cannot be any more assessment as the only recourse available is to file an appeal before the Appellate authority and therefore concluded that the Deputy Commissioner had no authority to issue an order of assessment after the goods were permitted to be cleared for home consumption. In the present case, the customs officers having found that the self assessment by the importer was not correct, reassessed the goods whereby the value of the goods was enhanced. The importer readily agreed with the said reassessment and paid the enhanced customs duty and got the goods cleared from the ICD. The fallacy in the approach of the importer was that after the goods were cleared, he made a request to the adjudicating authority to reassess the bill of entry and the adjudicating authority erroneously went ahead to reassess them by accepting the value of the goods declared by the importer. Such a procedure is neither available under the provisions of the Customs Act nor such an interpretation is discernible from any case law on the subject - The proper course for the appellant was to challenge the order of assessment enhancing the value as declared by him and therefore the Commissioner of Appeals rightly set aside the order of reassessment by the Deputy Commissioner. Once the order of assessment was no longer in existence, the claim for refund is automatically unsustainable, particularly in view of the analogy that the claim for refund is maintainable only in the event the bill of entry originally assessed was modified by way of an order in appeal, which the appellant herein had chosen not to file and rather adopted an innovative way of seeking the relief, having no sanctity in law. The question which arises is if the assessment is final on issue of an order permitting clearance of goods for home consumption and an appeal can be filed by both sides against the assessment, what is the nature of this power under section 28. It has been held by the larger bench of the Supreme Court in CANON INDIA PVT. LTD. Versus COMMISSIONER OF CUSTOMS [2021 (3) TMI 384 - SUPREME COURT] that the power under section 28 is a power to review the earlier decision of assessment and it is not inherent in any authority but is specially conferred on the proper officer. What is evident is that the relevant date to calculate the time limit to issue a notice under section 28 is the date on which an order permitting clearance of goods is given. This is also the date on which the scope of assessment under section 17 ends - It is evident that the time limit for filing an appeal before Commissioner (Appeals) is the date on which the order of the officer is communicated to him. In case of goods cleared for home consumption, the date of such order is when the clock starts ticking for filing the appeal (unless the proper officer delays issuing a speaking order). The Commissioner (Appeals) had rightly observed that the Deputy Commissioner had no jurisdiction to review its own order and reassess the bill of entry once again after the goods were cleared on payment of duty and the same was bad in view of the decision of the Apex Court in ITC - there are no justification to interfere with the said order and we accordingly, affirm the view taken by the Commissioner. In view of the settled legal position on the issue of jurisdiction as discussed above, the case law cited by the appellant in M/s Bright Point India Pvt. Ltd., vs. C.C. Mumbai, Air Cargo, [2021 (11) TMI 285 - CESTAT MUMBAI] is not applicable in the facts herein. The judgements cited on merits of valuation needs no consideration as we are deciding the issue of jurisdiction against the appellant. Hence we are not inclined to accept the submissions of the appellant. Since the appeals are being dismissed on the ground of jurisdiction, it is not required to dwell on the merits of the matter or the issue of unjust enrichment which is otherwise covered by the decision of the Apex Court in Union of India Vs Solar Pesticides Pvt. Ltd. [2000 (2) TMI 237 - SUPREME COURT]. Appeal dismissed. Issues Involved:1. Jurisdiction of the Deputy Commissioner to reopen and review its own assessment order.2. Admissibility of refund claims based on the reassessment order.Summary:Jurisdiction of the Deputy Commissioner:The core issue revolves around whether the Deputy Commissioner has the authority to review and reassess its own order after the goods have been cleared for home consumption. The Tribunal referenced the Apex Court's decisions in ITC Ltd. Vs. Commissioner of Central Excise, Kolkata, Priya Blue Industries Ltd. Vs. Commissioner of Customs, and Collector Vs. Flock (India) Pvt. Ltd., which clearly state that once an order permitting clearance of goods for home consumption is issued, the goods cease to be 'imported goods' and 'dutiable goods.' Therefore, the proper officer has no power to reassess any Bill of Entry post-clearance. The Tribunal affirmed that the Deputy Commissioner had no jurisdiction to reassess the bill of entry after the goods were cleared, and such reassessment was invalid.Admissibility of Refund Claims:The Tribunal examined the admissibility of refund claims filed by the appellant based on the reassessment order. It was held that refund claims under Section 27 of the Customs Act, 1962, cannot be entertained unless the bill of entry is modified through an appellate order. The Tribunal emphasized that the proper course of action for the appellant was to challenge the initial assessment order enhancing the value of the goods. Since the reassessment order by the Deputy Commissioner was invalid, the subsequent refund claims were unsustainable. The Tribunal also noted that the principle of unjust enrichment would apply, as per the Apex Court's decision in Union of India Vs. Solar Pesticides Pvt. Ltd.Conclusion:The Tribunal dismissed all appeals, upholding the Commissioner (Appeals)'s decision that the Deputy Commissioner lacked jurisdiction to reassess the bill of entry after clearance and that the refund claims based on such reassessment were invalid. The Tribunal did not address the merits of the valuation or the issue of unjust enrichment, as the appeals were dismissed on jurisdictional grounds.