2023 (7) TMI 1066 - AT - Customs

Appellate authority orders reassessment, upholds original decision on self-assessment validity, stresses importance of thorough examination.

The appellate authority set aside the assessment orders for de novo adjudication by the assessing authority within a specified timeframe. The Commissioner ... Principles of Natural Justice - Reopening of Self Assessment - Department never came in appeal against setting aside of the assessment order by the Commissioner (Appeals) - HELD THAT:- In the first round of litigation, an assessment was made by the party and the assessment order were duly approved by the departmental officers and duty was paid under protest. The so-termed self assessment order were set aside by the learned Commissioner(Appeals) to require original authority to issue a fresh order as there was lack of cooperation by the department in providing all the relevant documents. The original authority also had the same predicament of not having the relevant records but overlooked that the self assessment orders were in any case set aside, continued to proceed and concluded that he is not competent, not being a proper officer to reopen the same. This is in complete defiance of order of Ist appellate authority. On appeal to the Commissioner (Appeals), in the second stage he also expressed opinion in his findings that a person has to be aggrieved by self assessment to litigate the matter further. At this belated stage where the documents are not available with the department and this thing has been repeatedly coming on record and that the duty was paid under protest, the party is entitled to relief and matter remanded to Commissioner (Appeals) to allow the benefit of the Notification sought by the party after due examination of the same, as per law specially provisions of Section 149. Appeal allowed by way of remand. ISSUES PRESENTED AND CONSIDERED 1. Whether an assessing authority is bound to conduct a de novo adjudication when a first appellate authority sets aside assessment orders and directs fresh adjudication after following principles of natural justice. 2. Whether a self-assessed bill of entry constitutes an 'order/decision' amenable to appeal under Section 128 (or equivalent appellate provisions) and whether a person who self-assesses can be an 'aggrieved person' for purposes of appellate remedy. 3. Whether, in circumstances where departmental records are incomplete or unavailable and duty has been paid under protest, remand to the original authority or further appellate direction is appropriate to secure a just outcome, including consideration of exemption notifications and statutory provisions such as Section 149. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Obligation to conduct de novo adjudication following remand by first appellate authority Legal framework: Appellate powers permit remand where necessary to allow the original authority to reconsider facts and law afresh, subject to statutory limits on appellate and adjudicatory powers and principles of natural justice. Precedent Treatment: The first appellate authority relied on precedent recognizing continuing remand power (e.g., decisions treating Commissioner(Appeals) remand power as intact post-amendment). The Tribunal cited authorities distinguishing a Supreme Court passing remark that limited remand, and relied on cases upholding remand for de novo consideration. Interpretation and reasoning: The Court found that once the Commissioner (Appeals) set aside the assessment orders and expressly directed fresh orders after following natural justice, the original assessment ceased to subsist (non est) and the adjudicating authority was under a judicial duty to conduct a de novo adjudication. The original authority's subsequent conclusion that it was not a 'proper officer' to revisit the assessments and its refusal to interfere were contrary to the appellate direction and therefore impermissible. Ratio vs. Obiter: Ratio - where an appellate authority sets aside assessment orders and directs de novo adjudication, the original authority must comply and cannot treat the earlier assessment as subsisting. Obiter - references to specific case comparisons distinguishing higher court remarks are illustrative but not essential to the holding. Conclusion: The de novo adjudication direction of the first appellate authority was binding; the original authority erred in declining to revisit the assessments after remand. Issue 2 - Appellability of self-assessment and status of the self-assessing importer as 'aggrieved person' Legal framework: Section 17 (self-assessment and verification) and provisions governing appeals to Commissioner (Appeals) (Section 128 in the text) set out self-assessment regime, verification, reassessment, and requirement of a 'speaking order' where reassessment is contrary to self-assessment. Statutory appeal provisions require an aggrieved person and an order/decision by an officer below Commissioner rank. Precedent Treatment: The Tribunal considered and accepted later authoritative decisions recognizing that self-assessment is an assessment for purposes of challenge and appeal, thus allowing an importer who has self-assessed (and/or paid duty under protest) to be an aggrieved party. Earlier departmental view that self-assessment could not be an order/decision was rejected by the Tribunal in light of precedents cited by the appellant. Interpretation and reasoning: The Tribunal observed that the proposition that a self-assessed bill cannot be the subject of appeal because it is not an officer's order is no longer valid in view of subsequent judicial pronouncements. Practical consequences such as reassessment, requirement of speaking orders, and the reality of dispute over classification/exemption mean that self-assessment can have adjudicatory effect and permit appellate remedy when a party is aggrieved (especially where duty was paid under protest). Ratio vs. Obiter: Ratio - self-assessment can be treated as an assessment subject to challenge and the self-assessing importer may be an aggrieved person entitled to appellate remedy. Obiter - detailed doctrinal exposition of Section 17(5) procedure beyond its application to the facts may be illustrative. Conclusion: The Tribunal holds that self-assessment is amenable to appeal and that the appellant could be an aggrieved person; the lower authorities' reliance on the contrary proposition was incorrect. Issue 3 - Appropriate remedy where departmental records are incomplete and duty paid under protest; remedial scope including consideration of exemption notifications and Section 149 Legal framework: Principles of natural justice, appellate remand powers, duty to consider statutory exemptions/notifications on merits, and Section 149 (referenced as relevant to relief on record paucity) guide the remedial approach where evidence/records are incomplete and duty has been paid under protest. Precedent Treatment: The first appellate authority relied on cases supporting remand where records unavailable and the need for original authority to undertake certain actions. The Tribunal relied on such precedents to justify further remand and directed consideration of claimed benefits under the relevant notification. Interpretation and reasoning: Recognizing repeated findings that departmental records were not available and that duty had been paid under protest, the Tribunal concluded that equitable and legal considerations required remand to the Commissioner (Appeals) to examine entitlement to the claimed exemption/concessional rate, applying law including Section 149. The Tribunal noted that failure of the department to contest the remand order initially left the assessment non est and obliged appellate consideration rather than permitting the original authority to treat assessments as final. Ratio vs. Obiter: Ratio - where records are incomplete and duty is paid under protest, remand to the appellate authority for fresh consideration of exemption claims and application of statutory provisions (including Section 149) is an appropriate remedy to meet ends of justice. Obiter - remarks about the precise interplay of earlier precedents and their distinctions serve illustrative purposes. Conclusion: The Tribunal remanded the matter to the Commissioner (Appeals) with directions to allow examination of the claimed notification benefit and to pass appropriate orders after due examination and adherence to law (including Section 149), thereby granting relief to the appellant in light of the procedural irregularities and absence of record.