By TIOL News Service

CHENNAI, OCT 04, 2018: THE CESTAT had while allowing the appeal of the importer held thus -

Customs - Import - Provisional Assessment - Clerical Error - Refund - Revenue held that refund of the excess duty paid by mistake could not be allowed before finalizing the provisional assessment - In a case of conspicuous short payment or excess payment of duty by mistake outside the dispute leading to provisional assessment, it will be legal and proper for the department to recover the short paid duty or the assessee seeking refund of the excess duty during provisional assessment - In either case the parties cannot be held to suffer prejudice - No provision in the Act prohibits rectification of the errors in the provisional assessment under Section 154 and allowing the importer consequential relief - Grant of refund arising out of such rectification shall be subject to the provisions of Section 27 (2) of the Act prescribing test of unjust enrichment - Appeal allowed: CESTAT[Para 4 & 4.1]

We reported this order as - 2009-TIOL-442-CESTAT-MAD.

Revenue is in appeal against this order and seeks to raise the following substantial questions of law -

(1) Whether the clerical errors committed by the importer on the documents presented for clearance of import can be corrected under Section 154 of Customs Act, 1962, by way of a reassessment?

(2) Whether the provisionally assessed Bill of Entry can be re-assessed more than once by the competent authority for correcting a clerical error committed by the importer?

After extracting the decisions in Union of India v. Aluminium Industries Ltd., Kerala High Court, Commissioner of Income Tax, Rajkot v. Saurashtra Kutch Stock Exchange Ltd. - 2008-TIOL-170-SC-IT, Hero Cycles vs. Union of India - 2009-TIOL-317-HC-MUM-CUS, the High Court inter alia observed -

++ In the case on hand, from the material on record, we could see that apparently, there was a error, on the part of the supplier, who has inadvertently charged SEK 199450 (Rs.11,36,865/-), whereas, the actual freight incurred was only SEK 19945 (Rs.1,13,686.50). Even the supplier has admitted the mistake and they have given a credit note, for the difference involved.

++ Section 154 of the Customs Act, 1962, provides that "such clerical error/accidental slip or omission, can be corrected at any time". Therefore, the question of filing any appeal against the assessment order, would not arise. The assessing authority can amend an order of assessment, insofar as clerical slips/errors is concerned. On making of such correction under Section 154 of the Act, the consequential return of amount of duty of customs, would be available to an importer.

Concluding that there is no manifest illegality or irregularity in the order, the substantial questions of law were answered against the Revenue.

The Civil Miscellaneous Appeal was dismissed.

(See 2018-TIOL-2050-HC-MAD-CUS)