TMI Blog2024 (4) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... efits etc. The goods may require the value to be re-fixed based on the Tariff Values fixed for the changed CTH or to be scrutinized for the basis of duty calculation changing from specific duty to ad-valorem duty etc. Its only after this process is complete that the duty liability, which is required to be paid by the importer as per the revised CTH can be determined and the refund claim examined along with unjust enrichment etc. Hence the administrative action of amending the CTH in the BE would virtually amount to an order of reassessment by the same proper officer after the original assessment done had concluded the determination of the liability of the importer to pay duty and the goods have been cleared from Customs controls. Once assessment is concluded it should not be administratively tinkered with either at the behest of the importer or of the department, without it being challenged in appeal. It is also to be mentioned that although rectification of mistakes or clerical errors are permissible u/s 154 of the Customs Act, the Appellant has not used that provision to alter / rectify the BE. Hence the Appellant himself acknowledges that the change sought to be made in the BE i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it appear that as per the Hon ble Supreme Court s judgement discussed above the request for change in CTH and consequently of a final assessment could only be made before a superior authority in appeal. In the light of the ratio of the judgments of the Hon ble Madras High Court in the case of Stanley Engineered Fastening India Pvt Ltd v. CC [ 2023 (3) TMI 846 - MADRAS HIGH COURT] and Bharti Airtel v. UOI [ 2022 (2) TMI 154 - MADRAS HIGH COURT] , the impugned order is set aside and the matter is remanded to the proper officer. He is directed to process the request of the appellant dated 13.9.2019 for amendment of the BE s as per section 149 of CA 62. On being satisfied he should re-assess the impugned goods to duty by passing a speaking order. After the re-assessment order is issued the appellant will be eligible to claim consequential refund, if any, as per law. The lower authority shall follow the principles of natural justice and afford a reasonable opportunity to the appellant to state their case both orally and in writing if they so wish, before finalizing the matter. The appellant should also co-operate with the adjudicating authority in completing the process expeditiously an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced below; Please refer to your letter dated 13.9.2019. In this connection, it is informed that the goods imported like Fresnel, Bulb shield, MCA PCBA, Monodrive were all parts of light signalling equipment and are used as fittings to lighting equipment like head lamp, rear lamp, fog lamps etc., hence rightly classified under CTH 8512 2020 which covers other automobile lighting equipment . Your request to classify under CTH 85129000 is rejected. Once an order of assessment is passed, the duty would be payable as per the order, unless that order of assessment including self-assessment is duly modified by way of appeal. Hence you are advised to approach the appellate forum to redress the grievance. Accordingly, the Appellant filed an Appeal before the Ld. Commissioner (Appeals) against the Letter dated 22.10.2019. The Ld. Commissioner (Appeals) passed Order-in-Appeal Seaport C.Cus.II No. 970/2020 dated 09.10.2020, the decision of which is as under; 8. The letter issued by the Assistant Commissioner (Gr. 5A) is ambiguous and does not speak for itself. The reason for rejection is not amplified in the letter. When the appellant has sought classification under a particular CH and the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ginal, grounds of appeal and the points put forth by the appellant during the personal hearing. . . . . . . . The Appellant contended that he has been procuring various parts to manufacture lighting equipment under the HSN Code - 85129000 - Parts of Electrical Lighting equipment; that, during the particular period, the appellant had inadvertently imported by mentioning wrong HSN as HSN 85122010 Head lamps, tall lamps, stop lamps, side lamps and blinkers or HSN 85122020 Other automobile lighting equipment; that LAA should have verified when such mistakes are brought to his knowledge and requested for rectification of mistakes under Section 149 of Customs Act; that the relief sought is for amendment on the ground of error as there is no legal flaw amenable to appeal and it is only a factual mistake which calls for rectification by amendment; that as per proviso to Section 149 of Customs Act, 1962 bill of entry amendment is allowed based on documentary evidences that were existed at the time of clearance of goods; that even after the goods were cleared for home consumption, appellant can avail the benefit of the aforementioned proviso to Section 149 and would be entitled for amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Section 128 or under other relevant provisions of the Act. (emphasis applied) The Apex Court has categorically observed that self-assessment could be modified either under section 128 or under relevant provisions of the Act. He stated that the said position has been elaborated in; 1) Sony India Pvt. Ltd. v. Union of India [2021 (8) TMI 622 - TELANGANA HIGH COURT] 2) Dimension Data India Pvt. Ltd. v. CC [2021 (1) TMI 1042 - BOMBAY HIGH COURT], affirmed by the Apex Court in Commissioner v. Dimension Data India Private Ltd. [2022 (379) E.L.T. A39 (S.C.)] 3) Neyveli Lignite Corporation India Limited v. CC [2022 (4) TMI 1374 - MADRAS HIGH COURT] 4) Stanley Engineered Fastening India Pvt Ltd v. CC, [2023 (3) TMI 846- Madras High Court] 5) Bharti Airtel v. UOI, [2022 (2) TMI 154] He stated that based on the above decisions there are 3 methods provided in the Customs Act, for any modification or amendment to be made in any Bill of Entry, which are as follows: a) Appeal against BE under Section 128 of the Customs Act b) Amendment of the BE under Section 149 of the Customs Act c) Rectification of Mistakes or clerical errors under Section 154 of the Customs Act. In view of the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therwise provided in section 85, self-assess the duty, if any, leviable on such goods. (2) The proper officer may verify 3 [the entries made under section 46 or section 50 and the self-assessment of goods referred to in sub-section (1)] and for this purpose, examine or test any imported goods or export goods or such part thereof as may be necessary. 4 [Provided that the selection of cases for verification shall primarily be on the basis of risk evaluation through appropriate selection criteria.] [(3) For [the purposes of verification] under sub-section (2), the proper officer may require the importer, exporter or any other person to produce any document or information, whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained and thereupon, the importer, exporter or such other person shall produce such document or furnish such information. ] (4) Where it is found on verification, examination or testing of the goods or otherwise that the self assessment is not done correctly, the proper officer may, without prejudice to any other action which may be taken under this Act, re-assess the duty leviable on such goods. (5) Where any re-assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of documentary evidence which was in existence at the time the goods were cleared, deposited or exported, as the case may be. . . He submitted that as discussed there are specific definition of words like Entry , Bill of Entry , Assessment in the Customs Act, 1962. The CTH of imported goods was essential for assessment i.e. the determination of the dutiability of any goods and the amount of duty to be paid / collected. Once assessment is complete, duty is paid and the goods given Out of Charge from Customs, the goods loose their character of imported goods. Any amendment in the Bill of Entry after that which results in the entire assessment made being upset and affects the amount of duty collected, either leading to a demand or a refund, cannot be contemplated by Section 149. As per the Act assessment, includes re-assessment. As per the Hon ble Supreme Court s judgment in ITC Limited v. CCE (supra) self-assessment can be modified under section 128. Hence amendment requests under Section 149 can be used only for minor amendments or for amendment of documents accompanying the Bill of Entry for which a specific provision is not there in statute book. He further stated that any am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is Revenues contention that the letter seeking an amendment altering the CTH of the Bill of Entry s which have already been cleared from Customs control cannot be done for two reasons. Firstly, re-classifying the goods by changing the CTH amounts to modifying the assessment as defined in Section 2 of Customs Act,1962. Such a reassessment is not permissible under Section 149 of the Customs Act, 1962. Secondly as the goods are not available for verification or examination or testing as embodied in Section 17(4), the reassessment cannot be permitted. The Appellant on the other hand is of the opinion that there are 3 methods provided in the Customs Act, for any modification or amendment to be made in any Bill of Entry. Firstly by filing an appeal against Bill of Entry under Section 128 of the Customs Act. Secondly by an amendment of the Bill of Entry under Section 149 of the Customs Act and thirdly by a rectification of mistakes or clerical errors under Section 154 of the Customs Act. They are hence of the view that an amendment application under Section 149 of Customs Act, 1962 can be filed to revise the CTH in the Bill of Entry. We shall examine each of the issues raised below. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by the importer and re- assessment by the proper officer comes to an end once an order permitting the clearance of goods for home consumption is issued under Section 46. Thereafter, the goods cease to be imported goods or dutiable goods and no duty can be assessed. The only exception is when the goods are cleared for home consumption on provisional assessment in which case the assessment concludes after the assessment is finalized and an order is passed by the officer. Provisional assessment is not relevant to this appeal. 19. Assessment concludes the determination of the liability of the importer to pay duty and is similar to a decree under the Civil Procedure Code, 1908 (CPC). Section 2 (2) of CPC defines decree as It means the formal expression of an adjudication which conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit. Assessment differs from decree inasmuch as the determination of what is due as Revenue by the importer is not made by a Court of law but is determined through a quasi-judicial process by the proper officer who re-assesses the duty or is self-determined by the importer. Just like a decree in Civi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be satisfactory, an order of re-assessment has to be passed under Section 17(4). Section 128 has not provided for an appeal against a speaking order but against any order which is of wide amplitude. The reasoning employed by the High Court is that since there is no lis, no speaking order is passed, as such an appeal would not lie, is not sustainable in law, is contrary to what has been held by this Court in Escorts (supra). Demands under Section 28 21. While both the importer and Revenue can appeal to the Commissioner (Appeals) under Section 128 against an assessment (including self-assessment) of a Bill of Entry, the proper officer has another option of issuing a Show Cause Notice under Section 28 to demand and recover duties not levied, not paid, short levied or short paid or erroneously refunded. The nature of this power of the proper officer was held by the larger bench of Supreme Court as the power to review the earlier assessment in Canon India Pvt. Ltd. versus Commissioner of Customs [232021 (376) E.L.T. 3 (S.C.)]. The relevant text of this judgment reads as follows: 12. The nature of the power to recover the duty, not paid or short paid after the goods have been assessed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. The term imposition is generally used for the levy of a tax or duty by legislative provision indicating the subject matter of the tax and the rates at which it has to be taxed........ As seen at Section 2(2) of the Customs Act, assessment means determination of the dutiability of any goods and the amount of duty, tax, cess or any other sum so payable, if any, under this Act or under the Customs Tariff Act, 1975 (CTA 75), or under any other law for the time being in force. Any provision made in a statute for assessing tax and determining the rights and liabilities of the taxpayer concerned must be construed as substantive law as the function is a part of levy authorized by the Constitution. As stated by the Tribunal in Samsung India (supra) Assessment concludes the determination of the liability of the importer to pay duty . Section 17 of the Customs Act dealing with Assessment of duty is hence substantive law. Moreover, once the assessment is final in terms of Section 17 ibid, the proper officer becomes functus officio [ceases to have control over the matter] and would not have the power to review or re-assess an assessment that is final, unless there is a specific provision em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de transactions. The Customs department also uses the tariff headings wise data of import goods to maintain accurate records of imports. In summary, the Customs Tariff Heading serves as a critical reference point for assessing duties, managing trade agreements, and ensuring compliance with regulations when dealing with imported goods. 6.4 In the instant case the request for amending the CTH declared in the Bill of Entry would finally result in a refund. This would make it necessary to calculate the duties payable afresh. The redetermination of duty as a principle, would include determining the import permissibility of the revised CTH in terms of the EXIM policy and any other laws regulating imports/exports, determining duties now leviable on the goods on import (Basic, Additional, Anti-dumping, Safeguards etc.). Permissibility of various benefits under different schemes or applicability of any exemption notification benefits etc. The goods may require the value to be re-fixed based on the Tariff Values fixed for the changed CTH or to be scrutinized for the basis of duty calculation changing from specific duty to ad-valorem duty etc. Its only after this process is complete that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over their rights to revive stale claims, much after the goods have been cleared. Persons with good causes of action should pursue a proper remedy with reasonable diligence at every available opportunity. 6.7 It is also to be mentioned that although rectification of mistakes or clerical errors are permissible under Section 154 of the Customs Act, the Appellant has not used that provision to alter / rectify the BE. Hence the Appellant himself acknowledges that the change sought to be made in the BE is not merely an error or mistake. Rightly so as the amendment request is not for only one Bill of Entry but for Bills of Entry filed over a period of time. Even a bonafide error made over a period of time would be in the nature of negligence which in common parlance means and implies a failure to exercise due care, expected of a reasonable prudent person. 7. If the goods are not available for verification or examination or testing as embodied in Section 17(4), the reassessment cannot be permitted. 7.1 While the classification of certain goods is subject to drawing a sample and sending it for test / examination for expert comment / report, it is not universally required. Section 17(2) st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity. Its concern should be whether a decision-making authority exceeded its powers, committed an error of law, committed a breach of the Rules of natural justice, reached a decision which no reasonable tribunal would have reached or abused its powers. The Court held that it is not for the court to determine whether a particular policy or particular decision taken in the fulfillment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. 8. There are 3 methods provided in the Customs Act, for any modification or amendment to be made in any Bill of Entry. Hence an amendment application under Section 149 of Customs Act, 1962 can be filed to revise the classification in the Bill of Entry. 8.1 We find that the present issue arises with an aim of the Appellant getting a refund of excess duty perceived to have been paid. From the inception of the Customs Act the assessment of imported goods was done by the proper officer . A question arose, as in the present case, as to whether a refund could be claimed after the goods were assessed and cleared. The Hon ble Supreme Court in Collector of Central Excise, Kanpur v. Flock (India) (P) Ltd [(2000) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Central Excise Kolkata IV [2019 (368) E.L.T. 216 (S.C.)] answered in the affirmative. What is of interest is that the judgment at para 41 observed as under; 41. It is apparent from provisions of refund that it is more or less in the nature of execution proceedings. It is not open to the authority which processes the refund to make a fresh assessment on merits and to correct assessment on the basis of mistake or otherwise. (emphasis added) The judgment went on to state; 47. When we consider the overall effect of the provisions prior to amendment and post-amendment under Finance Act, 2011, we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or self-assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self-assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act. (emphasis added) It is the Appellants contention that the Apex Court has categoric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has not taken credit in respect of the inputs and capitals goods under the Cenvat Credit Rules, 2004 for the manufacture of mobile phones and during the relevant period, the EDI system did not permit availment of the lower rate of tax as per the Exemption Notification. A Writ of Mandamus was issued by the Hon'ble High Court to the department to amend the subject Bills of Entry under Section 149 of the Customs Act so as to enable the importer / petitioner to seek refund of excess duty paid under Section 27 of CA 62. 9.2 The Hon ble High Court of Madras which is the jurisdictional High Court examined a similar matter in Neyveli Lignite Corporation India Limited v. CC [2022 (4) TMI 1374 - MADRAS HIGH COURT]. The petitioner had imported solar panel modules for the purpose of establishing 15 MW (AC) Grid Inter Active Solar PV Power Project and had filed BE s in which the petitioner is stated to have classified the imports under the heading 8501 of the Customs Tariff Act, 1975 by mistake and thus, calculated the basic customs duty at 7.5%. The correct classification was ostensibly under CTH 8541 of Customs Tariff Act, 1975, in which case the imported goods would have att ..... X X X X Extracts X X X X X X X X Extracts X X X X
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