By TIOL News Service

NEW DELHI, FEB 13, 2014: THE petitioner imports electronic goods including cameras. The present case concerns a consignment in respect of which bills of entry were filed between March and April 2012; the petitioner claimed exemption from payment of 10% basic customs duty in respect of Sony Cameras of a particular model. This was, however, denied and the petitioner had to pay duty on the ground that the goods did not fit within the description "digital still image video cameras" in terms of Notification No.25/2005 as amended. The petitioner concededly cleared the goods under protest and paid Rs. 2.94 crores on 04.04.2012. Soon thereafter on 09.04.2012 it sought for reassessment in terms of Section 17(5) of Customs Act. It is stated that till date no order has been made.

The petitioner concurrently had applied for refund on 17.05.2012. A show-cause notice was issued which was eventually confirmed on 12.11.2013. Apparently the petitioner is in appeal against that order denying the refund claim.

Petitioner's Plea : the customs authority is duty bound to take up the reassessment application and pass a speaking order in terms of Section 17(5) of the Customs Act. In this regard counsel relies upon Karan Associates vs. Commissioner of Customs (Import) Bomb., (2009-TIOL-141-HC-MUM-CUS) and Commissioner of Customs, Chennai vs. Allufit India Pvt. Ltd. In each of these decisions, it was held that the assessing officer is mandatorily required to pass an order within the time stipulated.

Department's Defence : the petitioner is not entitled to any relief since the assessment has become final. It is highlighted that the petitioner did not prefer any appeal and its refund claim was correctly rejected considering all its contentions. The revenue also contended that the authority was not bound to re-assess the previous orders while considering the refund claim. He extensively relied upon the order of the Deputy Commissioner dated 12.11.2013 in this regard.

High Court's Observations : The decisions noted by the Deputy Commissioner i.e. Karan Associates and Allufit India Pvt. Ltd themselves emphasis that the authorities have to pass speaking and reasoned orders. Furthermore the judgment in Karan Associates was rendered after Section 17 was amended and the present provision was brought into force in 2001. In the facts the present case, it is apparent that the petitioner had cleared the goods on payment of duty under protest on 04.04.2012. Its application for reassessment was made on 09.04.2012. The entire tenor of the order of 12.09.2012 is that since the assessment had become final, refund cannot be allowed. Whilst the Deputy Commissioner could arguably take that position in the refund claim, the same reasoning cannot be applied to deny the statutory right of the petitioner for reassessment and a determination under Section 17(4) and (5). That the petitioner has appealed against the order of the Deputy Commissioner vis-a-vis refund would not in any manner relieve the customs authority of their obligation to deal with the application under Section 17(4) and (5).

High Court Order : In view of the above discussion a direction is hereby issued to the concerned Assistant/Deputy Commissioner entitled to deal with the application under Section 17(4) and (5) made by the petitioner on 04.04.2012 to consider the same on its merits and pass a reasoned order in accordance with law. The process shall be completed after hearing the petitioner for which purpose adequate notice shall be given. The concerned officer i.e. Assistant/Deputy Commissioner shall complete the process within 2 weeks. The appeal is accordingly allowed in the above terms.

(See 2014-TIOL-189-HC-DEL-CUS)