Absence of Speaking Order u/s 17 (5) of Customs Act: CESTAT remands Case of Reassessment back to Original Authority [Read Order]

The Mumbai bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ), citing the absence of a speaking order under Section 17(5) of the Customs Act, 1962 has remanded the case of reassessment back to the original authority.

The appellants had imported ‘Atlantic Salmon GTD ( gutted ) Fresh Fish’ by classifying it under Customs Tariff Item ( CTI ) 0302 1400 under two Bills of Entry (B/E) No. 9494358 dated 11.07.2022 and B/E No.9810944 dated 01.08.2022 and self-assessed the same declaring the value of goods as per invoices No.700699 dated 08.07.2022 and No.701958 dated 29.07.2022, respectively, in terms of Section 17(1) of the Customs Act, 1962.

The proper officer of Customs in the Appraising Group had objected to the declared value of the imported goods and had raised queries seeking the reply from the appellants as to why the value of imported goods should not be enhanced to US$16.75 per Kg. on the basis of comparative value of goods imported in other cases.

The appellants had sought order for re-assessment by the proper officer of Customs under Section 17(5) ibid, and failing to obtain such order within a reasonable period of time, the appellants preferred an appeal before the Commissioner of Customs (Appeals). In disposing the appeals filed for disputed two B/Es viz. B/E No. 9494358 dated 11.07.2022 and B/E No.9810944 dated 01.08.2022, the Commissioner of Customs (Appeals) vide impugned order dated 07.02.2023 has held that the imported goods were cleared from Customs by issue of ‘Out of charge’ on 15.07.2022 and 06.08.2022, respectively and the appeals were filed against two B/Es involving a delay of 111 days and 133 days, respectively and hence it is barred by limitation of 90 days provided under Section 128(1) ibid.

Ms Sweta Vijay Upadhyay representing the appellant submitted that in case of enhancement of value, a speaking order under Section 17(5) of the Customs Act, 1962 is required to be passed within 15 days of the assessment. Since, no speaking order was passed under Section 17(5) of the Act, the appellants never came to know the reasons for the re-assessment made by the proper officer and to enable them to file an appeal seeking legal remedy. Hence, she pleaded that Bill of Entry cannot be taken as a decision or order for the purpose of Section 17(5) ibid and therefore the appeal filed before the Commissioner of Customs ( Appeals ) cannot be treated as time-barred. On the above basis, learned Advocate prayed that the impugned order is to be set aside.

On the other hand, D.S. Mann, representing the revenue supported the impugned order and submitted that consent for loading of value was given by the appellants in their last reply to the query of the proper officer, and therefore, the speaking order under Section 17(5) of the Customs Act, 1962 was not required.

The bench found that the appellants have challenged the impugned order on two grounds; firstly, on the ground that a speaking order under Section 17(5) of the Customs Act, 1962 has not been passed after loading of the assessable value in respect of two B/Es; and secondly, on the ground that the appeals preferred before the Commissioner of Customs ( Appeals ) was not barred by limitation of time, inasmuch as there is no order under Section 17(5) ibid.

Further found that the re-assessment order required to be passed by the assessing officer under Section 17(5) ibid is not a discretion for the proper officer of Customs to take the reply of the appellants as confirmation of such re-assessment, so as to claim the benefit of exception provided therein. It is an essential legal requirement, when the appellants-importer had not accepted the re-assessment proposed by proper officer of Customs.

Further considered view that the impugned order passed by the learned Commissioner of Customs (Appeals) cannot be sustained. However, we are also of the considered view that in order to examine the various issues of reassessment of impugned goods covered under the two Bills of Entry i.e., B/E No. 9494358 dated 11.07.2022 and B/E No.9810944 dated 01.08.2022, for deciding upon the proper determination of the assessable value of imported goods, the matter needs to be decided afresh in de novo proceedings by the original authority. 

 Therefore, the two member bench of the tribunal comprising S.K. Mohanty (Judicial member) and M.M. Parthiban ( Technical member ) observed that the impugned order was set aside and the appeals were allowed in favour of the appellants by remanding the matter for a fresh decision by Original Authority after duly taking into consideration the various submissions to be made by the appellants. Accordingly, the appeals were allowed by way of remand for fresh de novo proceedings.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates