Bombay High Court
M/S. Karan Associates vs Commissioner Of Customs (Import on 4 February, 2009
Author: J.P.Devadhar
Bench: Ranjana Desai, J.P. Devadhar
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CUSTOMS APPEAL NO.74 OF 2008
M/s. Karan Associates, having )
their office at 403, 4th floor, )
Kartar Mansion No.1, Lamington )
Road, Mumbai - 400 004. ) ..Appellant.
V/s.
Commissioner of Customs (Import) )
CSI Airport, Sahar, Andheri (E) )
Mumbai - 400 099. )..Respondent.
Mrs.Ankita Singhania with Sayeed Mulani i/b. Mulani &
Co. for appellant.
CORAM : SMT. RANJANA DESAI AND
J.P.DEVADHAR, JJ.
DATED : 4TH FEBRUARY, 2009.
ORAL JUDGMENT (PER J.P.DEVADHAR, J.)
1. This appeal is directed against the order of the CESTAT dated 15/2/2008. According to the appellant, following questions of law arise out of the order of the tribunal dated 15/2/2008 :-
(a) Whether the judgment of the Hon'ble Supreme Court in Priya Blue case applies in cases where there is no speaking order of the assessing authority revising the declared value of the imported goods ?
(b) If the answer to the first question is in the negative, then in that event, should the Appellate Tribunal have applied the ratio of the judgment in the T.E.L.C.O. Ltd. case to the facts of the present appeal ?::: Downloaded on - 09/06/2013 14:18:50 :::
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(c) Whether the failure of the assessing authority
to issue a speaking order and denying to the aggrieved party an opportunity of being heard prior to reassessment, negates the substantive right to appeal of the aggrieved party ?
(d) In the event that the assessing authority does not issue a speaking order and does not afford the aggrieved party an opportunity of being heard while rejecting the declared value of the imported goods and reassesses the duty payable by the importer, is such a non-speaking order appealable ? (sic)
2. In this case, the appellant had imported electronic parts, integrated circuits and regulators in the year 2003 igand had filed a bill of entry for clearance of the said goods by computing the duty on the invoice value. The assessing officer assessed the said bill of entry by loading the invoice value. The appellant paid the duty as assessed without any protest and cleared the goods on 30/1/2003. Thereafter, by a letter dated 11/2/2003 the appellant requested the assessing officer to pass a speaking order giving reasons for enhancing the invoice value. Several reminder letters were sent by the appellant, however, it appears that no speaking order has been passed.
3. In the meantime, the appellant filed a refund claim on 10/4/2003 seeking refund of the duty paid on the enhanced value of the imported goods. The refund claim was rejected on the ground that so long as the ::: Downloaded on - 09/06/2013 14:18:50 :::
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assessment order holds the field, the refund claim cannot be entertained. Appeal filed against the order rejecting the refund claim was also dismissed by the Commissioner (A). On further appeal, the Tribunal remanded the matter back to the assessing officer for adjudication of the refund claim afresh in the light of the decision of the Tribunal in the case of TELCO V/s.
Commissioner of Customs reported in 2003 (158) ELT 640 (Tri-Mum).
(Tri-Mum)
4.
an order Thereafter, the matter was heard afresh and by in original dated 9/3/2007 the adjudicating authority once again rejected the refund claim of the appellant in the light of the decisions of the Apex Court in the case of Collector of Central Excise, Kanpur V/s. M/s.Flock (India) Pvt. Ltd. reported in 2000 (120) E.L.T. 285 and M/s.Priya Blue Industries Ltd. V/s. Commissioner of Customs (Preventive) reported in (172) E.L.T. 145.
5. Challenging the aforesaid order, the appellant filed an appeal which was dismissed by Commissioner (A) on 31/7/2007. On further appeal filed by the appellant, the CESTAT dismissed the appeal filed by the appellant. Hence this appeal.
6. The basic question raised in this appeal is, ::: Downloaded on - 09/06/2013 14:18:50 :::
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where the imported goods are assessed on the bill of entry by enhancing the invoice value without passing a speaking order and the goods are cleared on payment of duty as assessed, whether the importer is entitled to claim refund of duty paid on the enhanced value of the goods on the ground that the assessing officer has failed to pass a speaking order though repeatedly requested by the importer ?
7. In the present case, admittedly, the appellant had of duty cleared the imported goods on 30/1/2003 on payment as assessed without any protest. Though the appellant by a letter dated 11/2/2003 requested the assessing officer to pass a reasoned order, it appears that a speaking order has not been passed in the matter. However, the fact that the assessing officer has failed to pass a speaking order would not invalidate the assessment order so as to file refund claim on 10/4/2003 and seek refund of duty paid on the enhanced value as per the assessment order. In other words, pendency of the application seeking a speaking order would not entitle the appellant to seek refund of duty paid as per the assessment order. It is well settled by the decisions of the Apex Court in the case of Flock (India) Pvt. Ltd. (supra) and Priya Blue Industries Ltd. (supra) that so long as the assessment order stands the question of granting refund does not ::: Downloaded on - 09/06/2013 14:18:50 :::
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arise at all.
8. The argument of the appellant that unless an appealable speaking order is passed, the importer cannot file an appeal against the assessment order is without any merit. Assessment order passed on the bill of entry is an appealable order and the same can be challenged even in the absence of a speaking order. In other words, in the absence of a speaking order, it cannot be said that the assessment order is not appealable.
without giving
Where an
reasons
assessment
and in spite
order
of
is passed
repeated
requests reasoned order is not passed, proceedings can
be initiated for setting aside the assessment order
passed on the bill of entry. In the present case, save
and accept writing letters no proceedings have been
initiated for setting aside the assessment order.
Therefore, the fact that the assessing officer has not
passed a speaking order would not entitle the appellant to claim partial refund of duty paid as per the assessment order.
9. Strong reliance was placed by the counsel for the appellant on the decision of the Apex Court in the case of Karnataka Power Corporation Ltd. V/s. Commr.
of Cus.(Appeals), Chennai reported in 2002 (143) 482
(S.C.) followed by the Tribunal in the case of Telco
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Ltd. (supra). Both the aforesaid decisions have no
relevance to the facts of the present case, because, in both the above cases, the Apex Court as well as Tribunal have remanded the matter back to the adjudicating authority to consider the application of the importer regarding the reclassification of the goods as well as the refund flowing therefrom. In the present case, the question raised is, where reasoned assessment order is not passed, whether the ratio laid down by Industries Ltd.
the Apex Court in the case of the Priya (supra) would be applicable.
Blue The Tribunal has rightly held in the affirmative. In both the aforesaid cases relied upon by the appellant, the importer had sought reclassification of the imported goods and the consequential refund. In that context, the matters were remanded for decision on merits regarding reclassification and consequential refund, if any. In the present case, during the pendency of the application filed on 11/2/2003 seeking reasoned order, the appellant had filed refund claim on 10/4/2003. The said refund application dated 10/4/2003 was disposed off in the light of the decisions of the Apex Court in Priya Blue Industries Ltd. (supra). Thus, the aforesaid two decisions relied upon by the Tribunal are distinguishable on facts.
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10. Reliance was placed by the counsel for the
appellant on the decision of this Court in the case of
Glaxo Laboratories V/s. A.V. Venkateswaran reported
in A.I.R. 1959 Bombay 372 as well as the decision of
the Punjab High Court in the case of M/s.Shreeram
Durgaprasad Tumsar v/s. Union of India & Ors.
reported in A.I.R. 1962 Punjab 360 which have no
relevance to the facts of the present case. As held in
these cases, the appellate authority can properly
decide the appeal only if the assessment order is a
reasoned
absence of
order.
reasons
But it does not mean
the duty paid
that
pursuant
in
to
the
the
assessment order is liable to be refunded.
11. By inserting section 17(5) into the Customs Act, 1962 with effect from 13/7/2006 the legislature has made it mandatory for the assessing officer to pass a speaking order within the time stipulated therein.
Even before the insertion of the above provisions, the assessing officer was bound to pass a speaking order wherever demanded. However, the fact that a speaking order is not passed would not entitle the importer to claim refund of duty paid as per the assessment order.
Therefore, the decision of the authorities below in rejecting the refund claim of the appellant by relying upon the decision of the Apex Court in the case of Priya Blue Industries Ltd. (supra) cannot be faulted.
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12. In the result, we see no merit in the appeal and the same is hereby dismissed.
(SMT. RANJANA DESAI, J.) (J.P.DEVADHAR, J.) ::: Downloaded on - 09/06/2013 14:18:50 :::