Custom, Excise & Service Tax Tribunal
M/S. Kalpataru Power Transmission Ltd vs Commissioner Of Customs(Imports), ... on 24 June, 2009
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO.1
APPEAL NO.C/109/09
(Arising out of Order-in-Appeal No.1007/08 AM(1)420(AC/GR.VI)/2008(JNCH) dtd. 29.12.2008 passed by the Commissioner of Customs(Appeals), Raigad )
For approval and signature:
Honble Mr. Justice R.M.S.Khandeparkar , President
And
Honble Mr.A.K.Srivastava, Member(Technical)
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1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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M/s. Kalpataru Power Transmission Ltd.
:
Appellants
VS
Commissioner of Customs(Imports), Nhava Sheva
Respondents
Appearance
Shri T.Viswanathan, Advocate for Appellants
Shri H.B.Negi, Authorized Representative (DR)
CORAM:
Mr.Justice R.M.S.Khandeparkar, President
And
Mr.A.K.Srivastava, Member(Technical)
Date of hearing : 24.06.09
ORAL ORDER NO.
Per : Mr. Justice R.M.S.Khandeparkar Heard the ld.advocate for the appellants and the ld.DR for the respondents. The appellants challenge the order dated 29.12.2008 passed by the Commissioner of Customs(Appeals), Mumbai on various grounds. However, it is not necessary to consider all those grounds. We consider only one ground viz. failure on the part of the authorities to comply with the provisions of law before proceeding to take steps to recover the alleged short levy.
2. The appellants have set up a power generation plant based on a Non-conventional energy source at Sri Ganganagar, Rajasthan and for that purpose the appellants imported a Steam Turbine vide Bill of Entry dated 19.02.2003, under Project Imports, and the Bill of Entry was provisionally assessed under Heading No.98.01 and the same was sought to be finalized on 25.02.2004. The provisional assessment was resorted for the purpose of seeking post importation evidence of installation of the said goods at the site and was finalized after the required installation certificate was produced before the Dy.Commissioner of Customs. The order of finalization of the project import was reviewed by the Commissioner of Customs under Sec.129D(2) of the Customs Act and order dated 9.2.2005 was passed authorizing the department to file an appeal before the Commissioner(Appeals). The department accordingly filed the appeal insisting for denial of the benefit of Notification No.6/02-CE which was extended to the appellants while passing the order of finalization of the project import. The appeal was contested by the appellants. However, the Commissioner(Appeals) order dated 5.8.05 held that the goods were liable to CVD and accordingly, the departments appeal was allowed. The appellants have sought to challenge the order by way of appeal before the Tribunal which is still pending for disposal. Meanwhile, the department issued Less Charge Notice under Sec.28 of the Customs Act on 26.6.2007 to the appellants. The same was sought to be contested on the ground that no step in terms of Sec.28 of the Customs Act has been taken by the department in the matter of recovery of less charge duty. The lower authority after hearing the parties vide order dated 9.5.2008 confirmed the less charge demand notice dated 26.6.2007 under Sec.28 of the Customs Act and accordingly directed the appellants to pay differential duty of Rs. 57,11,429/- and the interest thereon in terms of Sec.28(AB) of the Customs Act. Aggrieved by the same, the appellants preferred an appeal before the Commissioner (Appeals) which came to be rejected by the impugned order. Hence the present appeal.
3. It is the contention on behalf of the appellants that in order to initiate action for recovery of less charge duty, appropriate proceedings in terms of Sec.28 of the Customs Act are required to be initiated, without which the department is not entitled to proceed for recovery of such duty. In that regard, attention is also drawn to the decision of the Bombay High Court in the matter of Bajaj Auto Limited vs Union of India reported in 2003(151)ELT.23(BOM) and also of the decision of the Tribunal in the matter of Fibro Plast Corporation vs Commissioner of Customs, Nhava Sheva reported in 2001(131)ELT 446(Tri-Mumbai). It is the contention on behalf of the appellants that the order of the Commissioner(Appeals) passed on 5.8.2005 merely set aside the assessment order passed by the lower authority and did not take further steps in the matter. Being so, there was no executable order as such in relation to the alleged less charge demand.
4. The ld.D.R. on the other hand submitted that since the Commissioner(Appeals) has set aside the final assessment order, that itself will not be sufficient to contend that in the absence of further adjudication by the Commissioner(Appeals), the department is prohibited in taking appropriate action by issuing notice under Sec.28 of the Customs Act.
5. The records, undoubtedly, disclose that the Bill of Entry dated 19.2.03 was finally assessed on 25.2.04. However, the same was subjected to the appeal filed by the department. The Commissioner(Appeals) has set aside the order of the final assessment. The order passed by the Commissioner(Appeals) in that regard clearly read thus:-
Hence, the assessment order of the lower authority is set aside, and the departments appeal is allowed. It is pertinent to note that after setting aside the order of the final assessment, the Commissioner(Appeals) did not issue any further directions in order to proceed to finally assess the Bill of Entry in exercise of the powers under Sec.128A as amended with effect from 11.5.01. It is now settled law that in case the order passed by the lower authority happens to be unsustainable, the Commissioner(Appeals) while setting aside such order can proceed to re-adjudicate the issue involved and decide the matter finally.
6. It is rightly submitted by the ld.advocate that the order dated 29.12.08 nowhere discloses any efforts on the part of the Commissioner(Appeals) to finalise the assessment once having set aside the order of final assessment passed by the lower authority. Considering the provisions of Sec.128A as amended, it was the duty of the Commissioner to pass an appropriate order in that regard. In the absence thereof, we fail to understand how steps can be taken by the department directly under Sec.28 by issuing notice in the manner it was issued.
7. Once it is clear that the final assessment in the matter was to be completed, the question of resorting to recovery of the alleged dues cannot arise and in that regard the appellants are justified in contending that merely on the basis of order dated 5.8.05 passed by the Commissioner(Appeals), the department could not have taken steps to recover the dues.
8. In the facts and circumstances of the case, therefore, the appeal succeeds on the limited point and the impugned order is hereby set aside alongwith consequential relief.
9. Needless to say that this will not preclude the department to take appropriate steps in accordance with law.
10. The appeal accordingly stands disposed of.
A.K.Srivastava Member(Technical) Justice R.M.S.Khandeparkar President pv 4