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TMI Blog2013 (10) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... o the appellant, coking coal is classified under Tariff item "27011910" of the Customs Tariff Act, 1975 (for short, "Tariff Act, 1975"). The tariff rate of duty is 5% ad valorem. However, it is exempted from payment of customs duty vide Notification No.21/CSU-2002 dated 01.03.2002. On 26.09.2008 the appellant had entered into a contract with an overseas supplier for purchase of 50,000 M.T. of century PCI coal (Century Semi Soft Coking Coal). Upon arrival of the vessel at the destination port, i.e. Paradeep , the appellant filed the Bill of Entry (B/E) on 10.10.2008 for assessment and clearance of imported consignment for home consumption. In the said B/E, the rate of Custom duty was claimed as 'Nil' in terms of above Notification dated 01.03.2002. Pending submission of original documents, demurrage details and the BRC, the B/E was assessed provisionally by the Customs House, Paradeep . While provisionally assessing the B/E, the Superintendent of Customs has suo motu changed the classification of imported goods from '27011910 to '27011990' and also the duty liability from 'Nil' to '5%' without extending the benefit under notification dated 01.03.2002 and without considering the expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the assessment, which can be challenged by the appellant in terms of Section 128 of the Act, 1962. 4. Mr. Mohanty further submitted that no speaking order has been issued to the appellant in terms of Section 17(5) of the Act, 1962, despite the fact that the Customs duty has been paid by the appellant under protest and the classification of imported cargo was in dispute right from the beginning. It was further submitted that the decisions of Hon'ble Supreme Court in the case of Priya Blue Industries (supra) and the Bombay High Court in the case of Karan Associates vs. Commissioner of Customs (Import), Mumbai, 2009 (236) ELT 23 ( Bom ), relying upon which the appellant's refund claim application was rejected, have no application to the fact of the present case. The finalization of B/E without considering the submission of the appellant and affording any opportunity of personal hearing is against the cardinal principles of natural justice. 5. Per contra, Mrs. M. Padhi , learned counsel appearing for the respondent vehemently argued that as per Customs Notification No.1/1987 dated 10.02.1987, the Superintendent is the "Proper Officer" as provided under Section 2(34) of the Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formed about the finally assessed duty and therefore probably there is no mention of any "Proper Officer" or "Speaking Order". Under the provisional assessment, the party has already explained the classification to the satisfaction of the Proper Officer. 6. Mrs. Padhi further submitted that to claim refund, the importer has to apply as per Form 102 . A bare perusal of the said document shows that a copy of the B/E has to be submitted as documents. The order of provisional assessment was never challenged. After verification of records the note for final assessment was put up by the Superintendent on 10.03.2010, vide Annexure-5. Referring to some of the averments made in Paragraphs 2.8, 2.9, 2.10 and the prayer made in appeal before the CESTAT, Mrs. Padhi submitted that the appellant accepted the fact that final assessment has been done. It is further submitted that in a refund application the validity and legality of an assessment order cannot be challenged. The appellant filed refund application even after realizing that the duty amount remained unchallenged after final assessment. The appellant wanted a reassessment or change in the assessment through a refund application which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opportunity of hearing amounts to violation of cardinal principles of natural justice? (v) Whether the order passed by the CESTAT in rejecting the appellant's refund application is just and proper in the facts and circumstances of the case? (vi) Whether the refund application is maintainable without challenging in appeal the provisional assessment order or final assessment order? (vii) What order? 8. Question nos. ( i ), (ii) and (iii) being interlinked, they are dealt with together. 9. Sections 17 and 18 (1) of the Customs Act, 1962 deal with the assessment. Under sub-section (1) of Sec. 17 that after an importer has entered any imported goods under Section 46 or an exporter has entered any export goods under Section 50 the imported goods or the export goods, as the case may be, or such part thereof as may be necessary may, without undue delay, be examined and tested by the proper officer. Sub-section (2) provides that after such examination or testing, the duty, if any, leviable on such goods shall, save as otherwise provided in Sec. 85 be assessed. Sub-section (3) empowers the proper officer to require the importer, exporter or any o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valorem. However, the appellant's claim was that the same is exempted from payment of Customs duty vide Notification No.21/2002. Upon arrival of the vessel at the destination port i.e. Paradeep , the appellant filed the bill of entry on 14.10.2008 for assessment and clearance of imported consignment for home consumption. In the said B/E, the rate of customs duty was claimed as 'Nil' in terms of notification dated 01.03.2002. In support of its claim that the imported cargo is Coking Coal, the appellant in the letters dated 22.10.2008 and 27.10.2008 had enclosed the certificate issued by the overseas supplier. Perusal of letter dated 22.10.2008 addressed to the Superintendent of Customs, Custom House, Paradeep by the appellant reveals that the appellant has attached a literature on Properties of Coal, Caking Properties of Coals and manufacture of Coke where the raw material is Coking Coal. It was further indicated in the said letter that if the Crucible swelling index of the coal is 0-3, then the same coal is having caking behaviour i.e. coking coal. Besides the same, the shipper M/s Millennium Coal Pty Ltd. Australia has also issued a certificate, where they have declared that the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the importer confirms its acceptance of the assessment in writing. On the contrary, from the very beginning, the appellant's claim is that it is exempted from payment of customs duty on the imported cargos in question vide Notification No.21/2002 dated 01.03.2002. Therefore, as contemplated under Section 17, the Proper Officer is obliged to pass a speaking order of assessment, which has not been done in the instant case. 13. Question No .( iv) is whether finalization of bill of entry without considering the objection raised by the appellant against levy of duty and also without affording any opportunity of hearing amounts to violation of cardinal principle of natural justice. Needless to say that reason is the heartbeat of every conclusion. It introduces clarity in an order and without the same it becomes lifeless. [See Raj Kishore Jha V. State of Bihar (2003) 11 SCC 519]. One of the cardinal principles is that nobody should be condemned unheard. The very principle has been embodied under subsection (5) of Section 17 of the Act. Any order passed without complying with the provision of sub-section (5) of Sec.17 is vitiated in law. 14. Being asked to produce the final assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 10.03.2010 as well as the Bill of Entry does not reveal any reason as to why the claim of the appellant, i.e., exemption from paying the Customs Duty vide Notification No. 21/2002 dated 01.03.2002 has been rejected. It also does not reveal that any opportunity of hearing has been given to the appellant before rejecting its claim of exemption. As stated above, no other order of assessment passed in terms of Section 17 of the Act has been brought to our notice. 16. Question nos. (v) and (vi) being interlinked, they are also dealt with together. There is no dispute over the legal proposition settled by the Hon'ble Supreme Court in the case of Priya Blue Industries Ltd. (supra). It goes without saying that refund flows from an order. So long as an order of assessment stands, the duty assessed would be payable as per the said order of assessment. If that order is not challenged, no refund can be claimed. The officer empowered to consider different claims for refund cannot review the order of assessment for which right of appeal has been created under the statute. In the instant case, as held above, no order of assessment as contemplated under Section 17(2) read with Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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