Customs, Excise and Gold Tribunal - Tamil Nadu
Brakes India Ltd. vs Commissioner Of Customs on 24 January, 2007
Equivalent citations: 2007(116)ECC431, 2007ECR431(TRI.-CHENNAI), 2008(221)ELT300(TRI-CHENNAI)
ORDER P. Karthikeyan, Member (T)
1. This is an appeal filed by M/s. Brakes India Ltd. Padi, Chennai against the Order in Appeal No. C.Cus 376/06 dated 25/05/06, passed by the Commissioner of Customs (Appeal), Chennai. The facts of the case are that the appellants are engaged in the manufacture of brake assemblies using also raw materials imported under DEPB scheme. The assessee used to avail exemption under Notification No. 45/2002 Cus dated 22.04.2002 debiting the DEPB credit equal to the duty payable. The assessee used to discharge the duty liability as regards the basic customs duty using DEPB credit and pay the additional duty of customs in cash. They used to take credit of CVD paid in their cenvat account. The exim policy provisions had prohibited taking of cenvat credit of CVD paid using DEPB credit, in the mean time, in the year 2003, the Tribunal decided in the case of Polyhose India Pvt. Ltd. v. CCE and vide Final Order No. 1050/2003 dated 05/12/2003 of SZB, Chennai in the case of Spic Ltd. v. CCE, that importers paying CVD using DEPB credit could also take cenvat credit of the same. Following the above decisions, the appellants had paid CVD by debit in DEPB book and taken credit for several imports made from July 2003. As the inputs had not suffered CVD, the jurisdictional Central Excise officers initiated proceedings to recover such credit of CVD taken by the assessee. The credit involved in all such imports by the assessee was over Rs. 86.23 lakhs. The assessee approached the CBEC seeking clarification as to their eligibility to cenvat credit in respect of the impugned payments of CVD in view of the Tribunal orders and its re-credit in DEPB book if they paid the CVD already taken, in cash. The Board informed them that the department had not accepted the said orders of the Tribunal and that they may approach the jurisdictional Commissioner of Customs as regards the re-credit of the CVD paid in the DEPB book. When they pursued the matter with the Custom House, the Additional Commissioner of Customs informed them that the Custom House had not allowed any recredit in the recent past and rejected their request for recredit of the CVD (if paid in cash) in the DEPB book. The impugned order has been passed on appeal by the assessee against the above communication of the Additional Commissioner of Customs dated 17/06/04.
2. The assessee's request in the appeal was for re-assessment of the imported goods whereby they would pay the CVD in cash so that the DEPB book could be recredited with equal amount. Before the lower appellate authority, the assessee had cited various case law in support of their plea that when alternative assessments were possible, the assessee could opt for any of them even after having chosen the benefit of a different assessment initially. The Commissioner observed that those decisions related to cases on the Central Excise side and availment of concession by an assessee who had initially availed the credit contrary to the condition of the relevant notification and was allowed the benefit of that notification on expunging the credit. Judgments cited were to the effect that when the benefit of two notifications were available, the assessee could choose the one more beneficial to it.
3. In the impugned order, the Commissioner found that in the case before him, the assessee had sought relief of a different assessment after the goods had been assessed and cleared. The Commissioner observed that once an order of assessment had been passed, duty was payable based on that order unless it was revised under Section 28 of the Customs Act '62 (the Act) or modified in an order in appeal. A finally assessed bill of entry could not be reassessed in terms of Section 17(4) of the Act unless there was a good reason for the same or there was a valid order for the same from an appellate authority, as per the judgment of the Apex Court in the Priya Blue Industries Ltd. v. CC (Preventive) case. As per the said judgment, a request for re-assessment was not maintainable when the assessee had not challenged the order of assessment. The Commissioner also relied on the observation of the Apex Court inCCE, Kanpur v. Flock (India) Pvt. Ltd. to the effect that once an appealable order had been passed under the statute, unless the aggrieved party had chosen to exercise the statutory right of filing an appeal, it was not open to the party to question the correctness of the order of the adjudicating authority subsequently, by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing the order. Their lordships had observed that if that position was accepted then the provisions for adjudication in the Act and the Rules, would lose their relevance and the entire exercise would be rendered redundant. That would run counter to the scheme of the Act and would introduce uncertainty in the process of levy and collection of Excise duty. In the case of Priya Blue Industries Ltd. v. CC (Preventive) (supra) it was observed--"Once an order of assessment is passed the duty would be payable as per that order, unless that order of assessment has been reviewed under Section 28 and/or modified in an appeal that order stands. So long as the order of assessment stands the duty would be payable as per that order of assessment". In the light of the above case law, the Commissioner examined whether the lower appellate authority could have re-assessed the subject Bills of Entry in terms of Section 17. The Commissioner found that Section 17(4) provided for re-assessment of goods offered for assessment when it was found on examination or testing or otherwise that any statement made in the entry or document or any information furnished was not true in respect of any matter relevant to their assessment. The re-assessment could be initiated by the department. The provision did not contemplate the appellant seeking re-assessment or change in the mode of payment of duty. The option for re-assessment was not available after the goods had been finally assessed. In the subject case, the Bills of Entry had been assessed as declared by the appellant. The lower authority was not competent to reopen the finalized assessment. The appellants could not also come up in appeal against the assessment as they had admittedly not been aggrieved by the completed assessment. The Commissioner also found that the assessee had not indicated its willingness to discharge the interest liability for the credit amount enjoyed since import of the impugned goods. Accordingly, he rejected the request of the assessee for re-assessment of the impugned goods to discharge the CVD in cash and to avail equal amount as credit in their DEPB book.
4. In the appeal filed against the impugned order, the appellants have argued that the lower appellate authority had passed the impugned order on the grounds that only the department could order re-assessment under Section 17(4), that unless the assessment had been reviewed under Section 28 and/or modified in an appeal, remedy would lie only in an appeal under Section 128 of the Customs Act and that the lower authority was not competent 10 reopen a finalized assessment, which the department did not want to disturb.
5. The appellants argued that they could opt for either clearance of the imported goods availing DEPB credit on payment of duty in cash in respect of both basic customs duty and additional duty of customs or avail the DEPB benefit only in respect of basic customs duty. The original authority had denied their request for the reason that the custom house had not allowed any re-credit till recently. That was not a legal justification. The appellants had not sought re-assessment in terms of Section 17(4); even if the said provision did not cover the appellant's request they were not barred from seeking remedy by amending Bills of Entry. They cited cases where the apex Court had allowed the assessee's claim for re-assessment of goods under a different heading than the one initially adopted and had ordered consequential refund and, when two alternative benefits were available, the assessee was allowed to pay back the benefit availed under one notification subsequently and claim exemption under the other notification. They cited the case of Raman Boards v. CCE reported in 1988 (36) ELT 615, in support of the argument that an assessee could opt for re-assessment under a particular notification if they had chosen to forgo the benefit of another notification they had opted for assessment initially. The CBEC in their various circulars permitted the exporters to opt for a different export promotion scheme if a claim by the exporter under one scheme had been denied by the DGFT/Ministry of Commerce. In the instant case, they had approached the Commissioner intimating their intention to pay CVD in cash in terms of the provisions in the same notification under which the impugned imports had been initially assessed, to obviate the possible denial of benefit on a later date. The CBEC had clarified in its Circular No. 67/99 Cus. that in cases of provisional assessment when the final duty assessed was less than the provisional duty paid, the excess credit must be re-credited in the DEPB scrip. As per the circular this could be done by the custom house.
6. The appellants claimed that in the instant case, they were not seeking any additional benefit but were seeking benefit to which they were entitled. The entire exercise was effectively revenue neutral. The appellants sought to support their claim with the ratio of judgments in Gopal Zarda Udyog v. Commissioner of C.Ex. and Chandrapur Magnet Wires (P) Ltd. v. Collector of C.Ex. Nagpur .
7. The appellants sumitted that they had not filed an appeal against the order of assessment as they had not been aggrieved by the assessment already made. Therefore, the ratio of Priya Blue Industries Ltd., v. CC (Preventive) , did not apply to their case. The appellants had debited the DEPB credit towards also additional duty of customs following the ratio of the Tribunal's decision that in such cases they were eligible for taking credit of CVD. The request of the appellant was in accordance with the settled position of law that where two benefits were available, even if one benefit was claimed earlier, the option was always available to pay back the benefit and seek the alternative benefit. The appellants relied on the following decisions in support of their claim:
1. Raman Boards v. Collector CEx. 1988 (36) ELT 615
2. Swatantra Bharat mills v. Collector of CEx. 1993 (68) ELT 504 (G.O.I.).
They prayed that the impugned order be set aside.
8. During hearing the Ld. Counsel for the appellants submitted that they were seeking to amend impugned Bills of Entry in which the imported inputs had been assessed in terms of DEPB Notification No. 45/02 dated 22/04/02, discharging basic customs duty and CVD by adjustment of credit in the DEPB book. By amendment to those Bills of Entry filed from July 2003, they sought to pay the CVD in cash so that the corresponding credit availed in their cenvat credit could be validated. In addition to the written arguments, it was submitted that they were not seeking any additional benefit by the said amendment to the Bills of Entry and that the re-assessment of the respective Bills of Entry was effectively revenue neutral. Ld. Counsel submitted that the ratio of Man Industries (India) Ltd. v. CC (EP) Mumbai 2006 (202) ELT 433 (Tri-Mum.) and I.P. Rings Ltd. v. CC (AIR) 2006 (202) ELT 61 (Tri.-Chen.) supported the appellants prayer.
9. Arguing the case of the revenue, the Ld. SDR defended the impugned order citing various case law relied on by the lower appellate authority.
10. We have carefully considered the submissions by both sides and studied the case records. In the instant case, the appellants had started availing cenvat credit of CVD adjusted against DEPB credit on import of inputs since July 2003 following the decision of the Tribunal in Polyhose India Pvt. Ltd. v. CCE Final Order No. 1050/2003 dated 05/12/2003 of SZB, Chennai in the case of Spic Ltd. v. CCE as their representation made in April 2003 for clarification of the issue had not elicited any response from the jurisdictional Dy. Collector of Central Excise. An appeal was filed, consequent on the Central Excise authorities disallowing the cenvat credit on the ground that the same had been taken in violation of the provisions in the Exim Policy and the Cenvat Credit Rules.
11. The issue to be decided in the subject appeal is whether the appellants can be allowed to amend assessed Bills of Entry filed from July 2003 and on their assessment they can be allowed to pay CVD in cash and re-credit of the amount in DEPB book. The Ld. Commissioner (Appeals) denied their request for re-assessment on the ground that Section 17(4) of the Act provided for re-assessment only at the instance of the department and not on the request of the importer. Section 17 of the Act reads as follows:
1. 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.
2. After such examination and testing, the duty, if any, leviable on such goods shall, save as otherwise provided in Section 85, be assessed.
3. For the purpose of assessing duty under Sub-section (2), the proper officer may require the importer, exporter or any other person to produce any contract, broker's note, policy of insurance, catalogue or other document whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained, and to furnish any information required for such ascertainment which it is in his power to produce or furnish, and thereupon the importer, exporter or such other person shall produce such document and furnish such information.
4. Notwithstanding anything contained in this section, imported goods or export goods may, prior to the examination or testing thereof, be permitted by the proper officer to be assessed to duty on the basis of the statements made in the entry relating thereto and the documents produced and the information furnished under Sub-section (3); but if it is found subsequently on examination or testing of the goods or otherwise that any statement in such entry or document or any information so furnished is not true in respect of any matter relevant to the assessment, the goods may, without prejudice to any other action which may be taken under this Act, be reassessed to duty.
As per Sub-section 17(4), when imported goods or export goods permitted to be assessed on the basis of declaration and documents submitted by the importer/exporter, are found to be not conforming to such declaration/statements on examination or testing of the goods or otherwise as regards any matter relating to the assessment, the goods may be re-assessed to duty without prejudice to any other action which may be taken under the Act. From the above, it is obvious that Section 17(4) does not provide for the assessee to seek re-assessment of the goods assessed and cleared, for any reason. The finding of the Commissioner (Appeals) in this regard cannot be faulted.
12. The lower appellate authority relied on the ratio of the judgment of the Apex Court in CCE, Kanpur v. Flock (India) Pvt. Ltd. and in the Priya Blue Industries Ltd., v. CC (Preventive) , and decided that the assessment already made could not be disturbed. In the CCE, Kanpur v. Flock (India) Pvt. Ltd., (supra), the apex Court had decided that once the order of assessment had been passed, the duty would be payable as per that order. Unless that order of assessment had been reviewed under Section 28 and/or modified in an appeal that order stands. So long as the order of assessment stands, the duty would be payable as per that order of assessment.
13. In other words, an order of assessment could be modified only by following the statutory provisions relating to filing of appeal against such order or on review provided under Section 28 of the Act. Even though the above judgments were passed while examining admissibility of the claim for refund, the validity of the ratio cannot be questioned and applies to all the orders of final assessment. Therefore, the finding rendered by the lower appellate authority as regards the finality of an unchallenged assessment order is also sound.
14. However, the appellants have sought to invoke the provisions of Section 149 to amend entries made in the assessed Bills of Entry to obtain the same relief as they had sought before the lower appellate authority. Section 149 reads as follows:
Amendment of documents - Save as otherwise provided in Sections 30 and 41, the proper officer may, in his discretion, authorize any document, after it has been presented in the Custom House to be amended:
Provided that no amendment of a bill of entry or a shipping bill or bill of export shall be so authorized to be amended after the imported goods have been cleared for home consumption or deposited in a warehouse, or the export goods have been exported, except on the basis of documentary evidence which was in existence at the time the goods were cleared, deposited or exported, as the case may be.
As per Section 149, an importer has a right to make amendments in the Bills of Entry covering imported goods assessed and cleared for home consumption or deposit in a warehouse, if he satisfies the condition prescribed in the said Section that such amendments are sought on the basis of documentary evidence which was in existence at the time the goods had been cleared/deposited. In the instant case amendments to the Bills of Entry sought to be made are not on the strength of any new document. This right of the importer is not removed or whittled down by the judgments in the case of CCE, Kanpur v. Flock (India) Pvt. Ltd., and Priya Blue Industries Ltd., v. CC (Preventive). This issue was not before the apex Court when their lordships had passed the above judgments. We cannot take a view, which would make Section 149 redundant. Therefore, we find that the appellant's prayer for amending the Bills of Entry covered by the impugned order has to be allowed. We also find that this Tribunal had recorded the following findings on the provisions contained in Section 149 in I.P. Rings Ltd. v. CC(AIR) 2006 (202) ELT 61 (Tri.-Chen.):
Amendment of Bill of Entry is permissible on the basis of documentary evidence which was in existence at the time when the goods were cleared. In the present case, when the goods were cleared, Customs Notification 21/2002 (un-amended) was in existence. As its amendment through corrigendum was retrospective in effect, the amended Notification should be deemed to have been in existence at the time of clearance of the goods and, consequently, in terms of Section 149, the subject Bills of Entry were open to be amended. It appears from the provisions of Section 149 that such amendment shall be made by the importer as authorized by the proper officer. Thus the importer is expected to apply to the proper officer for permission to amend the Bills of Entry. Such amendment of the Bills of Entry should precede re-assessment under Section 17 of the Act. Therefore, it would appear that the initiative for re-assessment should come from the assessee. I am of the considered view that it is still open to the assessee to take this initiative, there being no period of limitation prescribed for re-assessment under the Act.
In Man Industries (India) Ltd. v. CC (EP) Mumbai 2006 (202) ELT 433 (Tri-Mum.), the Tribunal had held as follows:
The request of the appellant for conversion of the Shipping Bills was made in terms of the statutory rights available to the appellant under Section 149 of the Customs Act, 1962. The said section entitles the proper officer of Customs to direct amendment of any document, after it has been presented in the Custom House. By the application for conversion of the Shipping Bill, appellant was requesting the proper officer, to exercise this statutory power vested in such authority, to amend a Shipping Bill. The statutory condition subject to which such amendment could or could not be made is described in the proviso to Section 149 of the Customs Act, 1962.
We are in agreement with the above findings of the Tribunal as regards an importer's right under Section 149 of the Act. In the circumstances, we direct that the appellants shall be permitted to file amended Bills of Entry for re-assessment as prayed for. On their making payment of CVD in cash, the appellant will be entitled to credit of equal amount in the corresponding DEPB licence. The appeal is disposed of.
(Pronounced in open Court on 24.01.07)