2025 (11) TMI 18 - AT - Customs

Appeal against provisional Bill of Entry allowed; matter remanded for reconsideration under Section 128A(4), limitation counted from speaking order

Appellant's appeal against a provisional Bill of Entry assessment was allowed by CESTAT and the Commissioner (Appeals) order set aside; the matter is ... Computation of time limitation for filing an appeal against an assessment of a Bill of Entry under Section 128 of the Customs Act - computation of period of limitation should be taken from the date of communication of speaking order or from the date of assessment of bill of entry - HELD THAT:- It is observed that appellant has categorically noted in its COD application that they have approached the Assistant Commissioner to pass Speaking Order but no such order was passed as could be noticed from the Order of Commissioner (Appeals). There are also no stipulation that is restricting the appellant to file an appeal against the provisional assessment order. Admittedly Commissioner (Appeals) can not admit the appeal filed beyond the period of 90 days but that 90 days should have been computed from the date of communication of the speaking order supposed to be passed by the Assessing Authority and not from the date of assessment of Bill of Entry, in which no reasoning is cited for imposition of Anti-Dumping Duty. In view of above observation it can be said that appeal was filed within the period of limitation since there was no response received from the Assessing Officer to the request made by appellant, enabling him to file an appeal but Ld. Commissioner had not passed his order in conformity to Section 128A(4) of the Customs Act, 1962 as after admitting the appeal he had heard the matter in its totality and not passed his order stating the points for determination, the decision thereon and the reasons for such decision. It is also a settled principle of law that if appeal is admitted for hearing, disregarding period of delay, then it is to be heard and disposed of in accordance with section 128A(4) of the Customs Act and any period of Limitation is to be taken as a preliminary issue, that should not be dealt at end of litigation. There is no delay in filing an appeal and erroneous acceptance of date of assessment order as date of Order-in-Original by the Commissioner (Appeals) that would bring the delay to 36 days of passing of the Assessment Order of its communication, can be condoned by this Tribunal in exercise of its appellate power and therefore, the matter is required to be remanded to the Commissioner (Appeals) to pass an order in conformity to Section 128(4) of the Customs Act, 1962 by making further enquiry, if required on the reasoning of assessment itself in conformity to Section 128A(3) of the Customs Act and to dispose of the appeal in accordance with law. The appeal is allowed by way of remand to the Commissioner (Appeals) for passing an order as per provision contained in Section 128A (4) of the Customs Act within a period of four months and for the said purpose the order passed by the Commissioner (Appeals) is hereby set aside. Delay, if any, of 36 days, is condoned at this end in exercise of Appellate jurisdiction. ISSUES PRESENTED AND CONSIDERED 1. Whether limitation for filing an appeal against an assessment of a Bill of Entry under Section 128 of the Customs Act is to be computed from the date of assessment of the Bill of Entry or from the date of communication of a speaking order required under Section 17(5) when an importer objects to the assessment. 2. Whether an assessing authority's failure to pass a speaking order under Section 17(5) affects the maintainability/timing of an appeal and the computation of the limitation period under Section 128. 3. Whether the Commissioner (Appeals) erred in treating the date of assessment of the Bill of Entry as the date of Order-in-Original for limitation purposes and in failing to decide the appeal in conformity with Section 128A(4) (i.e., by not stating points for determination, decisions thereon and reasons). 4. Whether delay in filing the appeal (36 days beyond the date computed by the Commissioner (Appeals)) is amenable to condonation by the Appellate Tribunal in exercise of its appellate jurisdiction where a speaking order was not communicated to the appellant. 5. Whether an appeal admitted despite delay must be adjudicated on merits in accordance with Section 128A(4) and whether limitation should be treated as a preliminary issue rather than a bar to hearing on merit. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Computation of limitation: date of assessment vs. date of communication of speaking order Legal framework: Section 17(5) (post-amendment) imposes a duty on the assessing authority to pass a speaking order when the assessee objects to an assessment; Section 128 provides for appeals from assessment orders with limitation of 60 days from communication of the order (and condonation by Commissioner (Appeals) up to 30 days). Precedent treatment: The Court relied on decisions of the High Court establishing that where a speaking order mandated by Section 17(5) is not passed, limitation for filing an appeal under Section 128 begins from the date of communication of that speaking order (ratio followed). A pre-amendment Tribunal decision holding that an appeal could lie from the Bill of Entry without a speaking order was distinguished as inapplicable after the statutory amendment introducing Section 17(5). Interpretation and reasoning: The Tribunal agrees with the reasoning that a Bill of Entry lacking the statutory speaking order is not the 'decision or order' contemplated by Section 128; the assessee, having registered an objection, is entitled to receive the speaking order to know the reasons for assessment before the limitation clock for appeal begins. The statutory duty to pass a speaking order cannot be circumvented by treating the assessment date as the starting point for limitation where no speaking order has been communicated. Ratio vs. Obiter: Ratio - limitation under Section 128, when an assessing authority has not passed the speaking order mandated by Section 17(5), runs from communication of the speaking order and not from the date of the Bill of Entry assessment. Distinguishing of earlier Tribunal authority is ratio to the extent the earlier authority predates the Section 17(5) amendment; characterization of alternatives in other factual matrices is obiter. Conclusion: Limitation must be computed from the date of communication of the speaking order under Section 17(5); the Commissioner (Appeals) erred in computing limitation from the date of assessment of the Bill of Entry when no speaking order had been passed or communicated. Issue 2 - Effect of non-passage of Section 17(5) speaking order on maintainability and appellant's conduct Legal framework: Section 17(5) requires a speaking order when the assessee objects; the importer may challenge assessment by seeking the speaking order and then filing an appeal within Section 128 time limits from its communication. Precedent treatment: High Court authority held that the assessing authority's failure to perform the statutory duty to pass a speaking order entitles the assessee to seek such an order and have limitation run from its communication; the Tribunal decision cited by respondents pre-dated Section 17(5) and is thus inapplicable. Interpretation and reasoning: The Tribunal observed that the appellant had requested a speaking order and that no such order was passed; there was no statutory bar preventing the appellant from filing an appeal once the speaking order was obtained. The absence of a speaking order makes it effectively impossible for the appellant to know reasons for assessment and to file a meaningful appeal within the ordinary limitation period commencing from assessment date. Ratio vs. Obiter: Ratio - where an assessing authority fails to pass the speaking order under Section 17(5), the assessee is justified in awaiting or seeking that order and the limitation should run from its communication; converse rulings based on pre-amendment law are distinguished. Conclusion: The assessing authority's omission to pass the speaking order vitiates the Commissioner (Appeals)'s computation of limitation and supports acceptance that the appellant acted appropriately in seeking the speaking order before pursuing appeal rights. Issue 3 - Commissioner (Appeals)'s duty under Section 128A(4) and admissibility of appeal Legal framework: Section 128A(4) (interpreted by the Tribunal as the corresponding provision) requires that an adjudicatory order on appeal state points for determination, decisions thereon and reasons; admitted appeals should be heard and disposed of in accordance with statutory mandate. Precedent treatment: The Tribunal reiterated settled principle that once an appeal is admitted (even where delay is condoned), the appeal must be adjudicated on merits complying with statutory requirements of reasoned decision-making; limitation disputes are to be treated as preliminary issues not to preclude hearing on merits. Interpretation and reasoning: The Commissioner (Appeals) admitted the appeal but did not comply with Section 128A(4) by failing to state points of determination and reasoned conclusions on the assessment issue (Anti-Dumping duty imposition). The Tribunal held that since appeal was admitted, the Commissioner (Appeals) should have heard the matter on merits and passed a reasoned order; failure to do so required remand for reconsideration and fresh disposal in conformity with law. Ratio vs. Obiter: Ratio - admission of appeal imposes duty on appellate authority to adjudicate in accordance with Section 128A(4); limitation questions should be addressed as preliminary but do not preclude full adjudication when appeal admitted. Conclusion: The Commissioner (Appeals)'s order was flawed for non-compliance with Section 128A(4) and therefore must be set aside and the matter remanded for fresh disposal consistent with statutory mandates. Issue 4 - Condonation of delay by the Tribunal for 36 days and appellate power Legal framework: Appellate jurisdiction permits condonation of delay within equitable limits where statutory scheme and facts permit; Section 128 allows condonation by Commissioner (Appeals) up to 30 days, while the Tribunal exercises jurisdiction to condone additional delay when appropriate in the exercise of appellate power. Precedent treatment: The Tribunal relied on the principle that where administrative failures (non-passing of speaking order) make it effectively impossible to file appeal within ordinary limitation, the appellate forum may condone delay; admitted appeals, and the need for meaningful adjudication, justify condonation in appropriate cases. Interpretation and reasoning: Given that the appellant had sought a speaking order which was not passed and that the Commissioner (Appeals) erred in treating the assessment date as the Order-in-Original date, the Tribunal considered the 36-day delay attributable to such administrative omission and found it proper to condone that delay in exercise of appellate jurisdiction to secure adjudication on merits. Ratio vs. Obiter: Ratio - where failure to pass a speaking order precludes timely filing, Tribunal may condone delay (here 36 days) to enable adjudication on merits; characterization of precise limits in other fact patterns is obiter. Conclusion: Delay of 36 days is condoned by the Tribunal in exercise of its appellate jurisdiction and the appeal proceedings are remitted for fresh decision. Relief and operative conclusions The Commissioner (Appeals)'s order is set aside and the matter remanded to the Commissioner (Appeals) to pass an order in conformity with Section 128A(4) within four months, with liberty to make further enquiries on the reasoning of assessment in accordance with Section 128A(3) (as applicable). The Tribunal condones the 36-day delay and directs disposal in accordance with law; limitation for filing appeal is to be computed from communication of the speaking order where one is mandated but not passed earlier.