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2023-TIOL-NEWS-036 Part 2 | February 13, 2023

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INCOME TAX

2023-TIOL-175-ITAT-DEL

Ashish Seth Vs ITO

Whether addition in respect of unexplained cash deposits can be made in respect of cash withdrawn and later re-deposited - NO: ITAT

- Assessee's appeal allowed: DELHI ITAT

2023-TIOL-174-ITAT-DEL

Anil Kumar Goyal Vs ACIT

Whether AO's failure to furnish evidences to establish genuiness of expenses on ad hoc basis is acceptable in the eyes of law - NO: ITAT

- Assessee's appeal allowed: DELHI ITAT

2023-TIOL-173-ITAT-KOL

ITO Vs NPS Cold Storage Pvt Ltd

Whether AO erred in exercising jurisdiction over the cases it had no jurisdiction - YES: ITAT

- Revenue's appeal dismissed: KOLKATA ITAT

 
TODAY'S CASE (INDIRECT TAX)

Cus - Once an order permitting clearance of goods for home consumption is given, they cease to be imported goods u/s 2(25) of Customs Act & cease to be dutiable goods u/s 2(14): CESTAT

Cus - Where an assessment order is passed by the Deputy Commissioner without authority, then Commissioner (Appeals) is justified in setting aside such O-i-O: CESTAT

 
INDIRECT TAX

2023-TIOL-120-CESTAT-DEL

Holy Land Marketing Pvt Ltd Vs CC

Cus - The appellant imported canned pineapple slices and filed Bill of Entry No. 6030589 dated 18.4.2018 classifying them under Customs Tariff Heading (CTH) 20082000 - The Customs Electronic Data Interchange System (EDI) facilitated the Bill of Entry, i.e., cleared the Bill of Entry without re-assessment by the officer or examination - As per its self-assessment, the appellant paid duties on 2.5.2018 and an order permitting clearance of goods for home consumption under Section 47 of the Customs Act, 1962 was given on the same date - Thereafter, on 4.5.2018 the appellant submitted a letter to the Deputy Commissioner requesting him to re-assess the bill of entry under CTH 08119010 - The Deputy Commissioner passed an assessment order dated 31.1.2019 i.e., after more than 8 months after the goods were cleared for home consumption under Section 17(5) rejecting the self-assessment by the importer of the imported goods under CTH 20082000 and re-assessing them under CTH 08119010 - This assessment order was reviewed by the Principal Commissioner of Customs, ICD, TKD and Revenue filed an appeal which was allowed by the impugned order and the assessment order was set aside - The Commissioner (Appeals) held in the impugned order that the assessment order was not legal in terms of Section 17(5) because the goods had already been given out of charge by the officer on 2.5.2018 - Therefore, re-assessment order by the Deputy Commissioner under Section 17(5) could not have been issued on 31.01.2019 after the goods have already been cleared for home consumption - Hence the present appeal was filed to challenge the validity of the O-i-A.

Held - Two questions which arise in this case are (a) whether the Deputy Commissioner had the power to re-assess the goods under Section 17(5) after the goods have been cleared for home consumption; and (b) whether the imported goods merit classification under CTH 20082000 or under CTH 08119010 -

+ With effect from 8.4.2011, the assessment of duty of customs under Section 17 was revised and a system of self-assessment of duty by the importer or exporter was introduced - The self-assessment made can be verified by the proper officer and for this purpose require the importer or exporter to produce necessary documents - If it is found on verification, examination or testing of the goods that self-assessment was not done correctly the proper officer may re-assess the duty leviable on such goods - Where any re-assessment is done by the proper officer, he is required to issue a speaking order unless the importer or exporter confirms his acceptance of the re-assessment in writing; (Para 7)

+ The customs EDI allows clearance of many goods based on self-assessment without passing the bills of entry or shipping bills through officers for verification, re-assessment or examination. Some bills of entry selected on the basis of risk analysis are sent by the system for verification or examination. It is a matter of daily occurrence in customs houses that some times the importer himself makes an error in self-assessment by say, not claiming an eligible exemption notification or making a wrong classification and requests the officer to re-call the bill of entry from the system and re-assess it even though the system did not mark it for re-assessment. Assessing officers do recall such bills of entry and correct the mistakes. This process avoids a lot of unnecessary appeals. Further, if the bill of entry is marked to the officer for re-assessment, the assessment initially done on the basis of the details available in the bill of entry. On examination, if differences are found, the bill of entry may be again re-assessed. Thus, the process of self-assessment by the importer can be followed by re-assessment by the officer more than once; (Para 8)

+ The question which arises is when does this process of assessment or re-assessment end - In other words, when an order is issued clearing the goods for home consumption, the goods cease to be imported goods, the importer ceases to be the importer under Section 2(26) and the imported goods cease to be dutiable goods under Section 2(14) - After an order permitting clearance of goods for home consumption is issued, there can be no more assessment - Thus, once the assessment is completed both sides can file an appeal before the Commissioner (Appeals). Further, Revenue can also review any assessment including self-assessment if duties have not been levied, short levied not paid or short paid and serve a notice to the importer or exporter under Section 28 within one year or five years, as the case may be. Explanation (i) to Section 28 clarifies that the relevant date for calculating the period of one year and five years for issue of notice is the date on which proper officer makes an order clearing the goods for home consumption. Thus, once the assessment under Section 17 comes to an end by issue of an order clearing the goods for home consumption, the clock starts ticking for limitation to issue a demand under Section 28;

++ It also needs to be noted that the customs EDI system does not permit re-assessment of the bills of entry once an order permitting clearance of goods for home consumption is given for the bill of entry. In this case, the Deputy Commissioner has clearly erred in issuing an assessment order under Section 17(5) after the goods were already cleared for home consumption. He had no authority to issue such an order because he could assess a bill of entry only if the goods are still "imported goods" and are "dutiable goods". Once an order permitting clearance of goods for home consumption is given, they cease to be imported goods under Section 2(25) and cease to be dutiable goods under Section 2(14). If an error is noticed in the assessment including self-assessment, the option available to the importer is to file an appeal before Commissioner (Appeals). The Deputy Commissioner has clearly issued the assessment order without any authority and, therefore, the Commissioner (Appeals) was correct in setting aside the assessment order. As the self assessment order by the Deputy Commissioner has been issued without any authority of law and has correctly been set aside by the Commissioner (Appeals), there is no need for us to go into the merits of the classification of the imported goods.

- Appeal dismissed: DELHI CESTAT

 

 

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A Conducive Policy Framework for GST on Online Gaming

 
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