Appeal Rejection without taking issue on Merit on Misinterprets S.17 (5) of Customs Act, Goods Clearance Deemed Final: CESTAT remands Matter [Read Order]

The Bangalore bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) remanded the matter, stating that the appeal was rejected without addressing the issue on its merits, thereby misinterpreting Section 17(5) of the Customs Act, 1962 and deeming the clearance of goods final.

The issue to be decided was whether the Commissioner ( Appeals ) was justified in rejecting the appeals without deciding the issue on merits taking the recourse of Section 17(5) of the Customs Act, 1962.

The appellant M/s. Zeetel Electronics, filed Bills of Entry for clearance of goods ‘O’ General Air Conditioner, Split Indoor Unit and Flex Shampoo Conditioner 20 OZ USA’ claiming benefit under Notification No.29/2010-Cus dated 27.02.2010. The assessing authority opined that the benefit of the said notification is not admissible to them.

Further, on the advice of the Customs authorities, the appellant filed revised Bills of Entry without claiming the benefit of the above said two notifications and cleared the goods on payment of appropriate Customs duty and SAD as the imported items were urgently required for treatment. Later, the appellant filed appeals before the commissioner ( Appeals ) challenging the said assessment. The commissioner ( Appeals ) rejected their appeals holding that once the goods are cleared for home consumption, the assessment is deemed to have reached finality. Hence the present appeal.

The appellant in their grounds of appeals submitted that the assessing officer has wrongly rejected their claim of benefit under Notification No.29/2010-Cus dated 27.02.2010. It was also submitted that the Commissioner (Appeals) without going into merits of the case on a mis-interpretation of Section 17(5) of the Customs Act, 1962 observing that once the goods are cleared for home consumption, the assessment is deemed to have reached finality, rejected their appeals.

The Coram of M. Misra ( Judicial member) and R. Bhagya Devi ( Technical member)  found that after rejection of the appellant’s claim of benefit under the above said notifications as declared in their Bills of Entry, they paid the duty under protest and preferred appeal before the Commissioner ( Appeals ). Therefore, the commissioner ( Appeals ) ought to have decided the appeals on merits instead of rejecting the same by observing that the appellant has accepted the assessment.

Further the impugned order was set aside and the case was remanded to the commissioner ( Appeals ) to decide all the issues on merit, after affording an opportunity of hearing to the appellant. Since the assessment involved in the appeals is around a decade old, it was directed that the denovo proceeding be completed within three months from the date of communication of this order. Accordingly, appeal was allowed by way of remand.

To Read the full text of the Order CLICK HERE

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