Cus - Provisional assessment prior to insertion of sub-sec (3) in Sec 18 for charging interest - Demand of interest is not sustainable - HC sets aside adjudication order - Notwithstanding alternative remedy, in view of exceptional circumstances, petition is maintainable
By TIOL News Service
AHMEDABAD, NOV 02, 2015: WHEN the interest amount involved is Rs 17.55 crores, the Adjudicating Authority did the inevitable - confirmed the demand with equal penalty. Aggrieved, the assessee filed a petition before the High Court, notwithstanding the alternative remedy of filing an appeal as the matter is covered by the precedent decisions of High Court.
The dispute is whether the assessee is liable to pay interest consequent to finalization of provisional assessment. It is the contention of the assessee that the imports were made prior to 13.07.2006, i.e., before sub-section(3) of Section 18 of the Customs Act, 1962 came into force, hence interest is not liable to be paid as also held by the High Court in case of Commissioner of Customs (Preventive) v. Goyal Traders - 2011-TIOL-568-HC-AHM-CUS.
Revenue contended inter alia that the Petition is not maintainable in view of availability of alternative and efficacious remedy.
After hearing both sides, the High Court held:
+ Contention of the revenue that the decision of the High Court in the case of M/s. Goyal Traders has not been accepted by the department on merits as the amount involved in that case was below the threshold limit of Rs.25 lakhs. Therefore, in the light of CBEC's instructions dated 20.10.2010 and 17.8.2011, the Department has not preferred to challenge the same before the apex court and it has been decided that the same will not be considered as a precedent. As per the principles laid down by the Supreme Court in Kamlakshi Finance Corporation Ltd case, it is manifest that the revenue officers are bound by the decisions of the higher authorities and cannot refuse to follow the same on the ground that the same is not acceptable to the department.
+ The show cause notice has been issued for recovery of interest on differential customs duty as per the provisions of sub-section (3) of section 18 of the Act, and resort has been made to section 28 only for the purpose of recovery of such amount. Under the circumstances, unless it is held that the petitioner is liable to pay interest on the differential duty under section 18(3) of the Act, the question of making any recovery of such interest amount under section 28 of the Customs Act would not arise. The impugned order, which proceeds on the basis that the recovery is only to be made under section 28 of the Customs Act without reference to section 18(3) of the Act, therefore, not being in consonance with the show cause notice issued to the petitioner as well as the relevant statutory provisions, cannot be sustained.
+ Having regard to the facts of the present case wherein the controversy involved stands concluded by a decision of the jurisdictional High Court in the case of Commissioner of Customs (Preventive) v. Goyal Traders , which stands affirmed by the Supreme Court in the case of Jaswal Neco Ltd. v. Commissioner of Customs, Visakhapatnam 2015-TIOL-173-SC-CUS, no fruitful purpose would be served by relegating the petitioner, either to the adjudicating authority for deciding the matter afresh, or to the Tribunal, against the order passed by the adjudicating authority. Under the circumstances, in view of the exceptional circumstances involved in the present case, the court has thought it fit to entertain the petition.
Accordingly, the High Court quashed the adjudication order and allowed the Petition.
(See 2015-TIOL-2523-HC-AHM-CUS)
