2025 (6) TMI 1021 - AT - Customs

Condonation of delay in filing appeal - appeals preferred beyond the prescribed time period of 60 days - Enhancement of value in the Bills of Entry (B/Es) - HELD THAT - In view of the fact that the appellants had specifically prayed for condoning the delay in late filing of appeal within the condonable period of 90 days from the date of finalization of the B/Es the same should have been considered by the learned Commissioner (Appeals). However it is found that he has not assigned any reason in support of either condoning the delay or non-consideration of the condonation of delay application filed by the appellants. It is also an admitted fact on record that the office of the Commissioner (Appeals) has not issued any defect memo to the appellants in pointing out the mistake that there is a delay in filing the appeal and they should have filed the delay condonation application for condoning the same. Therefore the rejection of appeal by the learned Commissioner (Appeals) on the ground of time bar aspect cannot be sustained for judicial scrutiny and therefore the impugned order rejecting 31 numbers of appeals is liable to be set aside. The appellants had self-assessed the B/Es in terms of Section 17(1) ibid. The self-assessment done by the appellants was not accepted by the Department and accordingly they had proceeded against the appellants for re-determination of value by way of re-assessment as provided under sub-section (4) of Section 17 ibid. Re-assessment of the B/Es is a choice of the proper officer - Since in the present case the proper officer has felt that the self assessment done by the appellants-importer is not correct then under sub-section (5) of Section 17 ibid he has to mandatorily pass a speaking order in explaining the reason for changing the stand in the assessment done in the B/Es. However the proper officer has not complied with the requirement of sub-section (5) of Section 17 ibid. Therefore under such circumstances the learned Commissioner (Appeals) has remanded the matter back to the proper officer for passing of the speaking order - there are no infirmity in the impugned order insofar as it has remanded the matter back to the proper officer of customs for passing of the speaking order under sub-section (5) of Section 17 ibid. Conclusion - Considering the fact that sub-section (5) of Section 17 ibid has provided the time limit of 15 days for passing of the speaking order the proper officer of customs is directed to comply with the process of passing of the speaking order within a period of 15 days from the date of receipt of this order. Appeal disposed off.

Summary

1. ISSUES PRESENTED and CONSIDERED

- Whether the appeals filed beyond the prescribed period of sixty days but within ninety days from the date of finalization of the Bills of Entry (B/Es) can be entertained by condoning the delay under the proviso to Section 128(1) of the Customs Act, 1962.

- Whether the learned Commissioner (Appeals) was justified in rejecting 31 appeals on the ground of time bar without assigning reasons for non-condonation of delay.

- Whether the proper officer complied with the mandatory requirement under subsection (5) of Section 17 of the Customs Act, 1962 to pass a speaking order explaining the reasons for re-assessment of the value declared in the B/Es.

- Whether the remand of 40 appeals to the proper officer for passing a speaking order under subsection (5) of Section 17 was appropriate and in accordance with law.

- The procedural and substantive obligations of the customs authorities in the context of self-assessment, re-assessment, and appeal proceedings under the Customs Act, 1962.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Condonation of delay in filing appeals beyond 60 days but within 90 days under proviso to Section 128(1)

Relevant Legal Framework and Precedents:

Section 128(1) of the Customs Act, 1962 prescribes a limitation period of sixty days for filing an appeal before the Commissioner (Appeals). The proviso to this section allows the Commissioner (Appeals) to condone delay in filing appeals if satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the sixty-day period, permitting filing within a further period of thirty days.

Interpretation and Reasoning:

The appellants filed 31 appeals after the expiry of the sixty-day period but within the condonable period of ninety days. The learned Commissioner (Appeals) rejected these appeals as time barred without assigning any specific reasons for non-condonation of delay. The Tribunal noted that the Commissioner (Appeals) did not consider the appellants' prayer for condonation of delay on its merits. The absence of a speaking order on the delay condonation application was a procedural lapse.

Key Evidence and Findings:

The impugned order at paragraph 7 explicitly states the rejection of appeals as time barred without going into merits or considering the sufficiency of cause for delay. It was also an admitted fact that no defect memo was issued by the Commissioner (Appeals) to the appellants pointing out the delay or requesting a condonation application.

Application of Law to Facts:

Given that the appeals were filed within the condonable period and the appellants had specifically prayed for condonation, the failure to consider this prayer and to assign reasons for rejection was contrary to the procedural requirements under the Act. The Tribunal held that such rejection cannot be sustained under judicial scrutiny.

Treatment of Competing Arguments:

The Commissioner (Appeals) relied on the strict limitation period and found the reasons cited by the appellants unconvincing but failed to articulate these reasons in the order. The Tribunal emphasized the need for a speaking order and consideration of condonation applications, rejecting the mechanical dismissal.

Conclusions:

The Tribunal set aside the impugned order rejecting the 31 appeals as time barred and remanded the matter to the Commissioner (Appeals) for consideration of the delay condonation applications and passing of speaking orders.

Issue 2: Compliance with subsection (5) of Section 17 regarding speaking order on re-assessment

Relevant Legal Framework and Precedents:

Section 17 of the Customs Act, 1962 deals with self-assessment of B/Es by importers and provides for re-assessment by the proper officer if the self-assessment is not accepted. Subsection (5) mandates that the proper officer must pass a speaking order explaining the reasons for re-determining the value or classification.

Interpretation and Reasoning:

The appellants had self-assessed the B/Es, which the Department did not accept, leading to re-assessment. The proper officer, however, failed to pass a speaking order as required under subsection (5) of Section 17. The learned Commissioner (Appeals) remanded the matter back to the proper officer to pass the speaking order.

Key Evidence and Findings:

The record showed absence of a speaking order explaining the rationale for changing the self-assessment. The Tribunal found no infirmity in the remand and upheld the requirement for compliance with the statutory mandate.

Application of Law to Facts:

The statutory provision is mandatory and procedural in nature, requiring transparency and reasoned decision-making. The failure to pass a speaking order vitiates the re-assessment process. The Tribunal directed compliance within fifteen days.

Treatment of Competing Arguments:

No contrary submissions were accepted regarding the necessity of a speaking order. The Tribunal emphasized adherence to statutory procedural safeguards.

Conclusions:

The remand for passing a speaking order was proper and in accordance with law. The appeals relating to these 40 B/Es were dismissed as the procedural defect was to be cured by the proper officer.

3. SIGNIFICANT HOLDINGS

"Proviso to section 128(1) stated that 'Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days'. However, I do not find essence in the reasons cited by the appellant and not being convinced, without going into the merits of the cases, I decide these 31 appeals as time barred." (Impugned order excerpt)

The Tribunal held that the above approach was unsustainable as the Commissioner (Appeals) failed to assign any reason for non-condonation, and the appellants had prayed for condonation within the permissible period, warranting reconsideration.

Core Principles Established:

- The limitation period for filing appeals under Section 128(1) is sixty days, but the proviso allows condonation of delay up to thirty additional days on sufficient cause.

- The Commissioner (Appeals) must consider condonation applications on their merits and pass a speaking order assigning reasons for acceptance or rejection of delay condonation.

- Self-assessment under Section 17(1) is subject to re-assessment by the proper officer, who must pass a speaking order under subsection (5) explaining reasons for re-assessment.

- Procedural fairness and adherence to statutory mandates are essential in customs appeal and assessment proceedings.

Final Determinations:

- The rejection of 31 appeals as time barred without consideration of condonation applications was set aside and remanded for fresh consideration.

- The remand of 40 appeals to the proper officer for passing a speaking order under subsection (5) of Section 17 was upheld.

- The proper officer was directed to comply with the requirement of passing a speaking order within fifteen days from receipt of the order.