2022 (9) TMI 1575 - AT - Customs

Condonation for delay of four years and nineteen days in filing the appeal - Department failed to provide Proper and satisfactory explanation for the delay - HELD THAT - In the present case it has been seen as a fact that as far back as on May 18 2018 the department was aware that the appeal filed by the department had been returned because of defects and even the letter dated December 07 2020 sent by the Department to the Tribunal also takes note of the fact that the Department had also been verbally informed that the appeal papers had been returned. Yet the Department sent letters dated November 23 2020 and September 14 2021 to the Tribunal seeking status of the appeal which had already been returned back to the Department. This only reflects the casual attitude adopted by the Department more particularly when the time limit of filing an appeal is three months. A proper and satisfactory explanation was required to be given for explaining the delay of four years and nineteen days in filing the appeal but despite having been granted an opportunity to file a better application to explain the delay the Department has not been able to explain the enormous delay to the satisfaction of the Bench. The inevitable conclusion that flows from the aforesaid facts is that the Department was highly negligent in filing the appeal on February 10 2022 to assail the order dated October 06 2017 when the Department had for the first time acquired knowledge on May 18 2018 that the appeal had been returned to the Department by the Tribunal because despite three notices sent by the Tribunal the defects had not been removed. Subsequently even the letter dated December 17 2020 sent by the Department to the Registry of the Tribunal admits that on verbal enquiry the Department had been informed that the appeal papers had been returned. No cogent or plausible reason has been given by the Department for explaining this enormous delay except stating that it had written two letters to the Tribunal on November 23 2020 and September 14 2021 seeking status of the appeals filed by them before the Tribunal on January 18 2018 when in fact they were aware that the appeal had been returned by the Tribunal by letter dated May 08 2018 which letter they had received on May 18 2018. The application filed for condonation for delay therefore deserves to be rejected and is rejected. This would result in the dismissal of the appeal also as it was not filed in the statutory period provided under the Act.

Summary

Issues Involved:
1. Validity of the declared invoice value of imported goods.
2. Influence of relationship between importer and foreign supplier on the transaction value.
3. Grounds for rejecting the transaction value.
4. Delay in filing the appeal and condonation of such delay.

Issue-wise Detailed Analysis:

1. Validity of the Declared Invoice Value of Imported Goods:
The Deputy Commissioner held that the declared invoice value for goods imported by the respondent should be accepted as the transaction value in terms of section 14 of the Customs Act, 1962, read with the Customs Valuation (Determination of Value of Imported Goods) Rules 2007. This decision was based on the finding that the relationship between the importer and the foreign supplier did not influence the value of the goods.

2. Influence of Relationship Between Importer and Foreign Supplier on the Transaction Value:
The Deputy Commissioner determined that although the importer and the foreign supplier were related persons under rule 2(2) of the Valuation Rules, this relationship did not influence the value of the goods. This finding was crucial as it upheld the declared invoice value as the transaction value.

3. Grounds for Rejecting the Transaction Value:
The Commissioner of Customs (Appeals) rejected the appeal filed by the Department, noting that mere suspicion or doubt could not be grounds to reject the transaction value. The Commissioner found no merit in the Department's appeal, thereby upholding the Deputy Commissioner's decision.

4. Delay in Filing the Appeal and Condonation of Such Delay:
The appeal was filed with an application for condoning a delay of four years and nineteen days. The Tribunal had previously given the Department liberty to file a better application explaining the delay, which was subsequently filed. The application detailed various procedural lapses and internal miscommunications within the Department, including the non-receipt of defect notices and the returned appeal papers.

The Tribunal noted that the Department was aware of the returned appeal papers as early as May 18, 2018, but failed to take immediate steps to file a fresh appeal. The repeated internal communications and inquiries about the status of the appeal, despite knowing it had been returned, were seen as a reflection of the Department's casual attitude. The Tribunal emphasized that a satisfactory explanation for the delay was not provided, despite the opportunity to file a better application.

The Tribunal referred to several Supreme Court judgments emphasizing that mere bureaucratic inefficiencies and procedural delays are not acceptable grounds for condoning such a significant delay. The Tribunal concluded that the Department was highly negligent and failed to provide cogent or plausible reasons for the delay. Consequently, the application for condonation of delay was rejected, resulting in the dismissal of the appeal as it was not filed within the statutory period.

Conclusion:
The Tribunal upheld the decision of the Commissioner of Customs (Appeals) and the Deputy Commissioner, accepting the declared invoice value as the transaction value. The appeal filed by the Department was dismissed due to an inordinate delay in filing, which was not satisfactorily explained.