2021-TIOL-224-HC-MUM-CUS
Dimension Data India Pvt Ltd Vs CC
Cus - Petitioner seeks a direction to the respondents to reassess the customs duty in respect of Bills of Entry by correcting the Customs Tariff Heading (CTH) from 85176990 to 85176930 – Petitioner submits that during internal audit, it realised that it had made inadvertent typographical error at the time of fling the Bills of Entry by incorrectly declaring the CTH as 85176990 instead of correct CTH 85176930; that for goods under CTH 85176930, rate of duty is NIL whereas in respect of goods under CTH 85176990, rate of duty is 20%; that because of such inadvertent error, petitioner had to make excess payment of basic customs duty to the extent of Rs. 14,50,01,413/-; that the petitioner submitted a letter dated 07.06.2019 before respondent No. 2 requesting correction in the Bills of Entry and they received a communication dated 25.10.2019 from respondent No. 2 declining the request on the ground that the petitioner had not obtained an order of re-assessment or appealed against the self-assessment done on the Bills of Entry – As the respondent No. 2 has not taken any decision for re-assessment of the self-assessed Bills of Entry as requested [u/section 17(4) read with section 149] in their representation dated 21.11.2019, the present petition is filed.
Held:
+ Short-point for consideration is whether request of the petitioner for correction of inadvertent mistake or error in the self-assessed Bills of Entry and consequential passing of orders for re-assessment is legal and valid? Corollary to the above is the question as to whether even in a case of this nature, petitioner is required to be relegated to the remedy of appeal? [para 14]
+ It is quite evident (from the scheme of Section 17) that though duty is cast upon an importer to self-assess the customs duty leviable on the imported goods, a corresponding duty is also cast upon the proper officer to verify and examine such self-assessment. [para 16]
+ Amendment of the Bill of Entry [u/s 149] is clearly permissible even in a situation where the goods are cleared for home consumption. The only condition is that in such a case, the amendment shall be allowed only on the basis of the documentary evidence which was in existence at the time of clearance of the goods. [para 18]
+ Section 154 permits correction of any clerical or arithmetical mistakes in any decision or order or of errors arising therein due to any incidental slip or omission. Such correction may be made at any time. [para 20]
+ From a conjoint reading of the aforesaid provisions of the Customs Act, it is evident that customs authorities have the power and jurisdiction to make corrections of any clerical or arithmetical mistakes or errors arising in any decision or order due to any accidental slip or omission at any time which would include an order of self-assessment post out of charge. [para 21]
+ It is clear that the issue before the Supreme Court [in ITC Ltd. 2019-TIOL-418-SC-CUS-LB ] was not invocation of the power of re-assessment under section 17(4) or amendment of documents under section 149 or correction of clerical mistakes or errors in the order of self-assessment made under section 17(4) by exercising power under section 154 vis-a-vis challenging an order of assessment in appeal. The issue considered by the Supreme Court was whether in the absence of any challenge to an order of assessment in appeal, any refund application against the assessed duty could be entertained. It was in that context that Supreme Court held that in case any person is aggrieved by any order which would include an order of self-assessment, he has to get the order modified under section 128 or under other relevant provisions of the Customs Act. [para 22.1]
+ In the judgment itself Supreme Court has clarified that in case any person is aggrieved by an order which would include an order of self-assessment, he has to get the order modified under section 128 or under other relevant provisions of the Customs Act before he makes a claim for refund. This is because as long as the order is not modified the order remains on record holding the field and on that basis no refund can be claimed but the moot point is Supreme Court has not confined modification of the order through the mechanism of section 128 only. Supreme Court has clarified that such modification can be done under other relevant provisions of the Customs Act also which would include section 149 and section 154 of the Customs Act. [para 22.2]
+ In the instant case, petitioner has not sought for any refund on the basis of the self-assessment. It has sought re-assessment upon amendment of the Bills of Entry by correcting the Customs Tariff head of the goods which would then facilitate the petitioner to seek a claim for refund. This distinction though subtle is crucial to distinguish the case of the petitioner from the one which was adjudicated by the Supreme Court and by this Court. [para 24]
+ Grievance of the petitioner is not on the merit of the self-assessment as the petitioner is aggrieved by the failure on the part of the respondents to carry out amendment in the Bills of Entry by replacing the incorrect CTH by the correct one namely by replacing CTH 85176990 with 85176930 which was declared inadvertently by the petitioner at the time of filing the Bills of Entry. This request of the petitioner, in our opinion, falls squarely within the domain of section 149 read with section 154 of the Customs Act. Upon amendment in the Bills of Entry by correcting the CTH, consequential re-assessment order under section 17(4) of the Customs Act would be in order. [para 25]
+ The expression "mistake" appearing in section 154 of the Customs Act may be defined as something done unintendedly or through inadvertence. The section itself says that the error in any decision or order should be due to any accidental slip or omission. Moreover, it can be a mistake of law or a mistake of fact. In all cases it need not be an arithmetical error alone. It may connote errors which can be discerned upon due verification.
+ Power to amend documents available under section 149 of the Customs Act read with correction of clerical or arithmetical mistakes or errors in orders due to accidental slip or omission under section 154 thereof is different and distinct from the appellate power exercised under section 128 of the Customs Act.
+ Power of amendment or correction, as the case may be, is vested on the same officer who had passed the initial order or an officer of equivalent rank. [para 27]
+ Petitioner has made out a case for issuance of a direction to the respondents for correction of the mistake or error in classification of the goods from CTH 85176990 to 85176930 and thereby for amendment of the Bills of Entry. Refusal of the respondents to look into the aforesaid grievance of the respondents is therefore not justified. [para 28]
+ Bench directs respondent No. 2 to consider the prayer of the petitioner for amendment of the Bills of Entry by exercising power under section 149 read with section 154 of the Customs Act and thereafter pass an appropriate order under section 17(4) of the Customs Act after giving due opportunity of hearing to the petitioner - exercise shall be carried out within a period of six weeks: High Court [para 29, 30]
-Petition disposed of : BOMBAY HIGH COURT
2021-TIOL-222-HC-KAR-ST
CST Vs Silverline Estates
ST - Substantial question of law is whether determination of service tax by the Central Excise Officer, is necessary before making a demand under Section 73A(3) of the Finance Act, 1994.
Held: From a perusal of Section 73A(5) of the Act, it is evident that the amount paid to the credit of the Central Government under sub-section (1) or sub-section (2) or sub-section (4) shall be adjusted against the service tax payable by the person on finalization of assessment or any other proceedings for determination of service tax relating to the taxable service deferred to in sub-section (1) - Thus, from perusal of Section 73A(5) of the Act, it is evident that the assessment must precede the demand - After taking note of the provisions of Section 73 of the Act, the Single Judge of this Court has held that the power to create a demand under Section 87 of the Act can be exercised only after adjudication namely on assessment of the amount - Aforesaid view has been upheld by the Division bench of this Court in the case of UNION OF INDIA Vs. PRASHANTHI [ 2016-TIOL-1127-HC-KAR-ST ] - Therefore, the substantial question of law is answered in favour of the assessee and against the revenue -No merit in the Revenue appeal, therefore, the same is dismissed: High Court [para 6, 7]
-Appeal dismissed : KARNATAKA HIGH COURT
2021-TIOL-221-HC-MAD-CUS
K Rahuman Sait Vs CC (Dated: January 25, 2021)
Cus - Appeal challenges the order passed by the Tribunal which partly allowed the appeal filed by the appellant by reducing the penalty imposed u/s 114 of the Act from Rs. 25 Lakhs to Rs. 15 Lakhs - Tribunal has noted that on the date when the search was conducted by the officers of the Customs Department in the godown, the appellant was present and the cartons, which were lying in the godown, were opened and found to contain concealed sandalwood as well as Mangalore Roofing Tiles - Tribunal also noted that the appellant implicated himself in his statement dated 11.03.1998 and the retraction of his statement was belated and the adjudicating authority had rightly rejected the same - Petitioner submits that the appellant was only a worker and he had not violated any of the provisions of the Act and the order passed by the Tribunal imposing a penalty of Rs. 15,00,000/- on the appellant is arbitrary and unreasonable; that the confession, which was subsequently retracted by the appellant, was not corroborated by other independent and cogent evidence.
Held:
+ The first aspect which the Bench needs to consider is whether the Adjudicating Authority was right in rejecting the retraction made by the appellant, vide letters dated 01.06.1998 and 01.07.1998 and holding the appellant guilty based on the statement given by the appellant dated 11.03.1998, and the other statements recorded from the other accused. [para 19]
+ Adjudicating Authority did not merely reject the retraction, but has taken note of the statement of the appellant recorded under Section 108, the stand taken by him in his retraction and the other statements and evidences, which were available and recorded during the search and seizure operations. [para 22]
+ Appellant could not establish that the statement recorded from him on 11.03.1998 was obtained by threat, duress or promise. The burden of proof to show that the statement was recorded under threat, duress was on the appellant, which he had failed to discharge. Therefore, the Adjudicating Authority, having done a proper exercise in examining the statements and all other evidences, which were available before him, adjudicated the case and held the appellant's statement dated 11.03.1998 to be true. [para 23]
+ Bench finds that there is no procedural error committed by the Adjudicating Authority and the Adjudicating Authority, after analysing the statement recorded from the independent witnesses, has rightly held that the appellant is guilty. [para 23]
+ Appellant cannot place reliance upon the decision of the Tribunal in the case of Janar, the person who filed the shipping bill because, the order of the Tribunal in the case of Janar was reversed by the Hon'ble Division Bench of this Court in C.M.A. No. 93 of 2009, dated 27.02.2015 = 2015-TIOL-729-HC-MAD-CUS in an appeal filed by the Department.
+ Furthermore, the appellant cannot also fall back on the order of acquittal passed by the Criminal Court because the same has been reversed and the appellant and others have been convicted pursuant to the judgment of the Madurai Bench of this Court in Crl. A. (MD) Nos. 58 and 59 of 2009, dated 19.10.2019.
+ Adjudicating Authority is empowered to independently proceed and there is no requirement that he has to await the outcome of the criminal proceedings. [para 24]
+ Tribunal, which is the last fact finding forum, has re-appreciated the factual matrix and rendered a finding that on the date when the officers of the Department conducted search operations in the godown at Tuticorin, the appellant was present and the cartons, which were lying in the godown, when opened, were found to contain sandalwood concealed along with Mangalore Roofing Tiles.
+ Further, the admissibility of the statement recorded under Section 108 of the Act from the appellant on 11.03.1998, was considered by the Tribunal and it was held that the said statement is admissible and the belated retraction was rightly rejected by the Adjudicating Authority. [para 25]
+ There is no question of law, much less any substantial question of law arising for consideration in this appeal - Appeal is, therefore, dismissed: High Court [para 25]
- Appeal dismissed :MADRAS HIGH COURT
