2025 (7) TMI 358 - AT - Customs

Time Limitation - Dismissal of appeal as being time barred - appeal were apparently filed beyond 30 days of the condonable period permissible by the Commissioner of Customs (Appeals) in terms of section 128 of the Customs Act 1962 - HELD THAT - The failure of the proper officer to implement the rule completely and only act on the provision partly should not adversely affect the statutory right of the appellant to file an appeal within a reasonable time. Procedural irregularities by departmental officers cannot invalidate substantive rights of the appellant conferred by law. As per section 128 of The Customs Act 1962 any person aggrieved by any decision or order passed under the said Act by an officer of customs lower in rank than a Commissioner of Customs may appeal to the Commissioner (Appeals) within three months from the date of the communication to him of such decision or order. When Section 17(5) ibid refers to the mandatory issue of a speaking order it is the date of that order that will determine the time limit for the purpose of section 128 ibid. In case such an order is not passed due to procedural irregularities adopted by the proper officer the remedy available to the importer would be to get the said order issued aided by administrative or appellate intervention - The overriding consideration for resolving the dispute should have been the fair administration of justice. It is appropriate to annul the impugned order and send the matter back to the original authority. The proper officer must issue a speaking order with respect to the impugned BOE s after hearing the appellant if he so desires within 15 days of receipt of this order as per the time limit mandated in Section 17(5) of the CA 1962. The appellant should also cooperate in the timely completion of the process. The appellant is entitled for consequential relief if any as per law. Appeal disposed off by way of remand.

Summary

Issues Presented and Considered

1. Whether the proper officer was obligated under section 17(5) of the Customs Act, 1962, to issue a speaking order when reassessing the assessable value of imported goods, and whether failure to issue such an order affects the timeline for filing an appeal.

2. Whether the appeals filed by the appellant before the Commissioner (Appeals) were time-barred under section 128 of the Customs Act, 1962, considering the absence of a speaking order.

3. Whether procedural irregularities, specifically the failure to issue a speaking order, can invalidate the substantive rights of the appellant to file an appeal within a reasonable time.

4. The appropriate remedy when the proper officer fails to issue a speaking order as mandated by law.

5. The propriety of the appellant filing multiple appeals, including a common appeal in addition to specific appeals against individual Bills of Entry (BOEs).

Issue-wise Detailed Analysis

Issue 1: Obligation to Issue a Speaking Order under Section 17(5) of the Customs Act, 1962

Relevant Legal Framework and Precedents: Section 17(5) mandates that if the proper officer reassesses the value, classification, exemption, or duty different from the self-assessment made by the importer or exporter, and the importer/exporter does not accept the reassessment in writing, the officer must issue a speaking order within 15 days of the assessment. This provision is mandatory and leaves no discretion to partially comply. Precedents cited include Tribunal decisions in M/s. Zymonutrients Pvt. Ltd. and Commissioner of Customs (Import), TKD, New Delhi Vs. AAA Impex, which were affirmed by the High Court of Delhi, emphasizing the mandatory nature of issuing a speaking order.

Court's Interpretation and Reasoning: The Tribunal reaffirmed that the proper officer's failure to issue a speaking order as per section 17(5) is a procedural irregularity that cannot be condoned. The speaking order is a prerequisite for the commencement of the appeal period under section 128. The Tribunal held that partial compliance with this mandatory provision is impermissible.

Key Evidence and Findings: The appellant had filed five BOEs with declared values, which were reassessed by the Assistant Commissioner without issuance of speaking orders. Despite waiting, no such orders were received, prompting appeals before the Commissioner (Appeals).

Application of Law to Facts: Since no speaking orders were issued, the time limit for filing appeals under section 128 could not commence. The appellant's contention that the appeal period should start upon receipt of the speaking order was upheld.

Treatment of Competing Arguments: The respondent contended that the appeals were time-barred and that the Commissioner (Appeals) had no discretion regarding the time limit. The Tribunal rejected this, noting that procedural lapses by the department cannot extinguish statutory rights.

Conclusions: The proper officer was legally bound to issue speaking orders under section 17(5), and failure to do so affects the appeal timeline.

Issue 2: Timeliness of Appeals under Section 128 of the Customs Act, 1962

Relevant Legal Framework: Section 128 provides a three-month period from the date of communication of the order for filing an appeal to the Commissioner (Appeals). The date of communication is critical and is linked to the issuance of the speaking order under section 17(5).

Court's Interpretation and Reasoning: The Tribunal held that in absence of a speaking order, the appeal period does not commence, and appeals filed thereafter cannot be held time-barred. The procedural irregularity of non-issuance of speaking orders should not prejudice the appellant's right to appeal.

Key Evidence and Findings: The impugned order dismissed the appeals as time-barred, but the Tribunal noted two other orders by the same Commissioner (Appeals) remanding similar matters for speaking orders, indicating inconsistency in approach.

Application of Law to Facts: The appeals filed beyond the 30-day condonable period were held to be valid as the limitation period had not started without the speaking orders.

Treatment of Competing Arguments: The respondent's argument that the Commissioner (Appeals) had no discretion on time limits was rejected in light of the procedural lapses.

Conclusions: The appeals were not time-barred, and the appellant's statutory right to appeal remained intact.

Issue 3: Effect of Procedural Irregularities on Substantive Rights

Relevant Legal Framework: The principle that procedural irregularities by departmental officers should not defeat substantive rights is well-established in administrative law.

Court's Interpretation and Reasoning: The Tribunal emphasized that failure to issue speaking orders should not adversely affect the appellant's right to appeal. Procedural lapses must be remedied rather than used to deny justice.

Key Evidence and Findings: The appellant's repeated attempts to secure speaking orders and the Commissioner (Appeals)'s differing approach in related cases highlighted the need for fair administration of justice.

Application of Law to Facts: The Tribunal found that the proper course was to direct issuance of speaking orders rather than dismissing appeals as time-barred.

Treatment of Competing Arguments: The respondent's strict adherence to limitation rules was balanced against the appellant's right to due process.

Conclusions: Procedural irregularities cannot invalidate substantive rights; remedial directions are appropriate.

Issue 4: Appropriate Remedy for Failure to Issue Speaking Orders

Relevant Legal Framework: Section 17(5) prescribes a 15-day period for issuance of speaking orders. Section 128 governs appeals against such orders. Administrative law principles allow appellate authorities to direct lower authorities to comply with statutory mandates.

Court's Interpretation and Reasoning: The Tribunal held that the Commissioner (Appeals) should not have dismissed the appeals as time-barred but should have directed the proper officer to issue speaking orders within the prescribed time.

Key Evidence and Findings: The Tribunal referred to two orders by the Commissioner (Appeals) remanding similar matters for speaking orders, underscoring the appropriateness of such directions.

Application of Law to Facts: The matter was remanded to the original authority with a direction to issue speaking orders within 15 days, allowing the appellant to be heard and to cooperate in the process.

Treatment of Competing Arguments: The respondent's insistence on dismissal was outweighed by the need for fair procedure and adherence to statutory mandates.

Conclusions: The appropriate remedy is remand with directions for issuance of speaking orders, not dismissal of appeals.

Issue 5: Filing of Multiple Appeals Including a Common Appeal

Relevant Legal Framework: Appeals must be properly filed and not duplicative or defective. Multiple appeals on the same subject matter may be scrutinized for propriety.

Court's Interpretation and Reasoning: The Tribunal found that six appeals were filed against five BOEs, including one common appeal against all BOEs, which was improper.

Key Evidence and Findings: Customs Appeal No. 42500/2024 was a common appeal, while Nos. 40704 to 40708/2025 were specific to each BOE.

Application of Law to Facts: The common appeal was dismissed as defective and returned to the appellant.

Treatment of Competing Arguments: No contest from the appellant was recorded on this procedural point.

Conclusions: The common appeal was improperly filed and was dismissed as defective.

Significant Holdings

"Section 17(5) of the Customs Act, 1962, outlines the procedure for reassessment of customs duty when it differs from the self-assessment made by the importer or exporter. If the proper officer seeks to reassess the imported/export goods leading to a change in the duty, value, classification, exemption claimed etc. and the importer/exporter doesn't accept the reassessment in writing, the proper officer must issue a speaking order within 15 days of the assessment and he does not have any discretion to follow the rule only partly in this regard."

"The failure of the proper officer to implement the rule completely and only act on the provision partly should not adversely affect the statutory right of the appellant to file an appeal within a reasonable time. Procedural irregularities by departmental officers cannot invalidate substantive rights of the appellant conferred by law."

"When an aggrieved importer/exporter showing sufficient cause and within a reasonable time, appeals against an official's failure to follow the law/rule in its entirety, the proper procedure for an appellate authority would be to direct the said lower authority to perform his duties, as has been done by the Commissioner Appeals in the two other orders referred to above by the appellant in their own case and not to shut the door on him (appellant) as done in the impugned order. The overriding consideration for resolving the dispute should have been the fair administration of justice."

"The proper officer must issue a speaking order with respect to the impugned BOE's, after hearing the appellant, if he so desires, within 15 days of receipt of this order, as per the time limit mandated in Section 17(5) of the CA 1962. The appellant should also cooperate in the timely completion of the process. The appellant is entitled for consequential relief, if any, as per law."

"Customs Appeal Nos. 42500/2024 is found to be a common appeal against all the BOE's, whereas Customs Appeal Nos. 40704 to 40708/2025 are against each specific BOE. Hence Customs Appeal Nos. 42500/2024 is found to be filed improperly and may be returned to the appellant as being dismissed for being defective."