2025 (7) TMI 1020 - HC - Customs

Inordinate delay in concluding final assessment - finalization of provisional assessment in respect of Shipping Bills - seeking a direction to the authority concerned to consider the reply and grounds/explanation contained therein at the time of finalization of provisional assessment - HELD THAT - The Petitioner appears to have filed reply dated 1st February 2025 (vide Annexure-8) in connection with Show Cause Notice dated 18th December 2023 before the Commissioner of Customs (Preventive) Commissionerate at Bhubaneswar and the said authority till date has not proceeded to finalise the shipping bills. It is true that touching merit of the matter by laying guidelines to proceed with the determination of Fe contents of iron ore fines which were exported would affect adversely the final assessment which is required to be based on fact-finding based on evidence available on record by applying appropriate law to such facts. Nonetheless it needs to be observed that the said authority while finalizing the provisional assessment shall have to take into account not only the material placed before him but also decide whether relevant decisions suggesting method of determination of Fe contents of iron ore fines exported are applicable along with Circular No.04/2012-Cus. dated 17th February 2012 issued by the Ministry of Finance Department of Revenue Central Board of Excise and Customs. It therefore needs to be emphasized without expressing any opinion touching the merit of the matter that the authority concerned shall proceed to complete the final assessment taking into consideration the reply as stated to have been submitted by the Petitioner vis- -vis materials available on record. The Petitioner is therefore directed to appear before the concerned authority along with copy of this Order on or before 25th July 2025. On the date of such appearance the authority may proceed to finalise the provisional assessment forthwith or may adjourn the proceeding for a future date as he deems appropriate. However after affording a reasonable opportunity of hearing he shall conclude the proceeding. Petition disposed off.

Summary

ISSUES:

• Whether the provisional assessment of export shipping bills relating to iron ore fines should be finalized on Wet Metric Ton (WMT) basis rather than Dry Metric Ton (DMT) basis.
• Whether the delay in finalizing the provisional assessment despite prior directions is illegal, unfair, and arbitrary.
• Whether the impugned demand cum Show Cause Notice (SCN) dated 18.12.2023 imposing duty on DMT basis violates binding judicial precedents and departmental circulars.
• Whether the statutory authority is obligated to consider the petitioner's reply and relevant judicial decisions and circulars while finalizing the provisional assessment.
• Whether judicial intervention is appropriate at the stage of provisional assessment finalization or premature.

RULINGS / HOLDINGS:

• The Court held that the final assessment shall be completed taking into consideration the petitioner's reply and relevant materials on record, including judicial precedents and Circular No.04/2012-Cus. dated 17.02.2012, without expressing any opinion on the merits.
• The Court recognized the petitioner's apprehension regarding the method of Fe content determination but declined to decide the substantive issue at this stage, emphasizing fact-finding by the competent authority.
• The Court found that the delay in concluding the final assessment must be remedied by directing the authority to complete the process within a stipulated timeframe, ensuring no unnecessary adjournments are granted.
• The Court rejected the contention that the statutory authority would ignore relevant materials and legal positions, affirming that the authority must consider all relevant judicial decisions and circulars during finalization.
• The Court held that the writ petition is maintainable to the extent of directing expeditious finalization but premature to decide the substantive legality of the assessment method.

RATIONALE:

• The Court applied the principles under Articles 226 and 227 of the Constitution of India, empowering it to issue directions for the enforcement of legal rights and to supervise subordinate courts and authorities.
• The Court relied on binding judicial precedents including the Supreme Court decision in Union of India v. Gangadhar Narsingdas Aggarwal, judgments of the Bombay High Court and the jurisdictional tribunal, and departmental Circular No.04/2012-Cus. to frame the legal context regarding classification and assessment methodology of iron ore fines export.
• The Court emphasized the quasi-judicial nature of the assessment authority's function, requiring fact-based adjudication and application of relevant law and materials submitted by the petitioner.
• The Court adopted a procedural approach, refraining from expressing substantive opinion on the method of Fe content determination, to avoid prejudicing the ongoing assessment process.
• The Court mandated a reasonable opportunity of hearing and a strict timeline for finalization to prevent inordinate delay, reflecting a doctrinal emphasis on timely adjudication in tax and customs matters.