Customs Tribunal rules against premature duty recovery under Sec. 28, stresses due process

The Tribunal held that the Department could not recover alleged short levy duty directly under Sec. 28 without completing the final assessment, as required by Sec. 128A. Since the Commissioner (Appeals) did not finalize the assessment after setting aside the order, the Department's actions were deemed premature. Consequently, the appeal succeeded, and the impugned order was set aside with consequential relief. The decision underscored the importance of following due process in recovery proceedings under the Customs Act.

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Issues Involved:
Failure to comply with provisions of law before recovering alleged short levy duty.

Detailed Analysis:

1. The appellants challenged an order passed by the Commissioner of Customs (Appeals) on various grounds, focusing on the failure of authorities to comply with the law before recovering the alleged short levy.

2. The appellants imported a Steam Turbine for a power generation plant in Rajasthan under Project Imports, provisionally assessed under Heading No. 98.01. The finalization of the import was reviewed by the Commissioner of Customs, who authorized the Department to file an appeal. The Commissioner (Appeals) later held the goods liable to CVD, leading to a dispute over differential duty.

3. The Department issued a Less Charge Notice under Sec. 28 of the Customs Act to recover the alleged duty. The appellants contested, arguing that proper proceedings under Sec. 28 were not initiated. They cited legal precedents to support their contention that the Commissioner (Appeals) did not take further steps after setting aside the assessment order.

4. The Department argued that setting aside the final assessment order by the Commissioner (Appeals) did not prohibit them from taking action under Sec. 28. However, the records showed that no further directions were issued by the Commissioner (Appeals) to finalize the assessment after setting it aside.

5. The Tribunal found that the Commissioner (Appeals) did not make efforts to finalize the assessment after setting aside the order, as required by Sec. 128A. Therefore, the Department could not proceed directly under Sec. 28 to recover the alleged dues without completing the final assessment.

6. The Tribunal held that since the final assessment was incomplete, the Department could not resort to recovery of dues based solely on the Commissioner (Appeals) order. The appeal succeeded on this ground, and the impugned order was set aside with consequential relief.

7. The decision did not prevent the Department from taking appropriate steps in accordance with the law, emphasizing the importance of following due process in recovery proceedings.

8. The appeal was disposed of in favor of the appellants, highlighting the necessity of completing the final assessment before initiating recovery actions under the Customs Act.

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