In the case of M/s Scion Spinners Pvt. Ltd, the Customs Excise and Service Tax Appellate Tribunal ( CESTAT) quashed non-speaking order on re-determination of assessable value
The assessee had imported 100% polyester spun yarn and filed three Bills of Entry for assessment and clearance, declaring the value according to the invoices from the overseas supplier; however, the proper officer disregarded the declared value and enhanced the assessable value based on the yarn’s quality attributes such as denier, count, dye status, brightness, and PET flake fiber content.
The assessee had filed appeals before the Commissioner (Appeals), contending inter-alia that the requirements of Section 14 of the Customs Act, 1962 and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 have not been complied with by the proper officer and that in support of rejection of the declared value, no speaking order was passed in terms of Section 17(5) ibid. in rejecting the appeals filed by the assessee
The Commissioner (Appeals) has held that the assessee had not paid the duty under protest and had accepted the assessments made by the assessing authority in loading the value. He has further held that since the appellants have accepted the transaction value determined by the proper officer, such assessments cannot be challenged by way of filing the appeal before the appellate body.
The assessee had filed three B/Es all dated 28.08.2013, claiming the value of the goods as per the respective invoices and that such B/Es were self-assessed in terms of sub-section (1) of Section 17 of the Customs Act, 1962.
The assessment provisions contained in Section 17 ibid were substituted by the Finance Act, 2011. The effect of the substitution was that the concept of self-assessment was introduced and mechanism were provided for verification of such self-assessment made by importer/exporter; and that for passing of the reassessment order by the proper officer of Customs, in the eventuality, when the self-assessment done by the importer is not found to be correct.
It has also been mandated that for the purpose of re-assessment, the proper officer is under the statutory obligation for passing of a speaking order on the re-assessment, within a period of fifteen days. It has also been provided that the proper officer may not pass any speaking order, where the importer/exporter confirms his acceptance of the re-assessment in writing.
The bench found that the value of imported goods was loaded by the proper officer, without assigning any specific reasons and more particularly, the requirement of subsection (5) of Section 17 ibid was not at all complied with for such purpose. It was not the case of revenue that the assessee had accepted the enhanced assessable value determined by the proper officer inasmuch as no communication was made by the assessee in accepting such assessment done by the department.
Further found that the proper officer had not assigned any reason or passed the speaking order in terms of the statutory mandates contained in sub-section (5) of Section 17 ibid with regard to enhancement of value declared by the assessee.
Therefore, the tribunal considered the opinion that the matter should go back to the original authority (proper officer) for due compliance of the requirements of sub-section (5) to Section 17 ibid for passing of a speaking order.
Therefore, the bench consists of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) held that the impugned order dated 11.02.2014 was set aside and the appeals were allowed by way of remand to the original authority for compliance with the statutory provisions contained in subsection (5) of Section 17 ibid. Further, the original authority should also assign specific reasons for the rejection of the declared value and duly follow the provisions contained in Section 14 ibid, read with the Valuation Rules, 2007, for the re-determination of the assessable value.
It was made clear that the proper officer should complete the process of reassessment within a period of 15 days from the date of receipt of this order. Needless to say, that opportunity of personal hearing should be granted to the assessee before passing of the speaking reassessment order. Accordingly, the appeals were allowed by way of remand.
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