2024 (11) TMI 1355 - AT - Customs

Classification and duty liability - Import of diagnostic reagents on which liability to duties of customs was determined under section 17 of Customs Act 1962 - denial of benefit of notification no. 50/2017-Cus dated 30th June 2017 as also recourse to serial no. 453 of Schedule III of IGST notification no. 01/2017 (Integrated Tax Rate) dated 28th June 2017 for discharge of integrated tax for the purpose of section 3(7) of the Customs Tariff Act affirmed the detriments to them - claim for assessment at rate of duty corresponding to tariff item 3822 0090 of First Schedule to the Customs Tariff Act has been wrongly denied and that observance of the essence of assessment in accordance with section 17(5) of the Customs Act for disputed classification to warrant issue of speaking order in its breach was not considered at all. HELD THAT - Claim of the appellant herein for classification with lower duty liability in consequence had been preferred in the bill of entry is not in dispute; such are entered in the check list which upon discharge of duty liability is transformed as assessed bill of entry for clearance from customs control under section 47 of the Customs Act. The revision occurred between filing of bill of entry and the conclusion of mandate under section 17 of the Customs Act and all this while except by foregoing release of goods albeit temporarily the importer is under the absolute power of proper officer which appears to have caused them to acquiesce in the determination of higher duty burden. Such misdirection of self-assessment is inappropriate exercise of statutory authority and it is but proper for superior authorities to set right such travesty of law. A copy of this order may therefore be placed before Chairman Central Board of Indirect Taxes Customs (CBIC) for his attention. Affirmation of re-assessment without any material to go by invalidates it ab initio. The lack thereof should have prompted the first appellate authority to enforce compliance with consequence of revision. Not having done so invalidates the impugned order. Accordingly we set aside the impugned order and restore the bills of entry before the original authority for disposal in the manner set out in section 17 of the Customs Act. These appeals are allowed by way of remand.

Summary

Issues:
Appeal challenging order of Commissioner of Customs regarding classification and duty liability for import of diagnostic reagents. Dispute over denial of benefit of customs notification and integrated tax. Lack of issuance of order under section 17(5) of Customs Act. Merit of classification and assessment under question.

Analysis:
The judgment involves 110 appeals by M/s Ortho Clinical Diagnostics India Pvt. Ltd. challenging the order of the Commissioner of Customs regarding the classification and duty liability for the import of diagnostic reagents. The dispute arose from the denial of the benefit of notification no. 50/2017-Cus and the recourse to IGST notification no. 01/2017 for the discharge of integrated tax. The appellants contested the finding that their claim for assessment at a lower duty rate was wrongly denied and that the essence of assessment under section 17(5) of the Customs Act was not considered. The issue of the lack of issuance of the order contemplated by section 17(5) was highlighted.

The judgment noted that the proper officer did not issue the order required by section 17(5) of the Customs Act, leading to a reassessment of the imported goods at a higher duty rate. The first appellate authority determined the merit of the reclassification despite the absence of the order. The issue of integrated tax was disregarded in the impugned order, which was deemed consequential by the appellants. The judgment emphasized the importance of adherence to the legal process outlined in the Customs Act for proper assessment and classification.

The legal representatives for the appellant argued that the revision in the duty rate was unjustified, and the classification should not have been altered without following the due process. They cited previous Tribunal decisions to support their contention. On the other hand, the Authorized Representative for the respondent defended the decision on the merit of the reclassification, asserting its correctness based on the facts of the import.

The judgment highlighted the failure of the first appellate authority to address the procedural irregularities in the reclassification and emphasized the need for compliance with the statutory provisions of the Customs Act. It was noted that the importer's claim for a lower duty rate was made in the bill of entry, and any revision should have been supported by a speaking order as required by law. The judgment concluded by setting aside the impugned order and remanding the appeals for proper disposal in accordance with section 17 of the Customs Act.