Assessment of Shipping Bill cannot be Challenged in absence of Final Order of Reassessment: CESTAT [Read Order]

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal(CESTAT) held that the assessment of a shipping bill cannot be challenged in the absence of a final order of reassessment. It is mandated that if any order is passed under Section 17 (4) of the Customs Act,1962,  the proper officer is duty-bound to pass a speaking order of re-assessment within 15 days of the order passed under Section 17 (4) of the Act.

M/s Presidency Exports & Industries Limited, the appellant challenged the impugned order challenging the rejection of the refund claim filed by the appellant. The appellant filed three refund claims on the ground that the export duty was charged based on Wet Metric Tonne (WMT), whereas the contract value was on Dry Metric Tonne (DMT).  The appellant requested the assessing officer to pass a speaking order under Section 17 (5) of the Customs Act, 1962, but the Adjudicating Authority did not pass any order under Section 17 (5) of the Customs Act, 1962.  However, the appellant filed refund claims of excess duty paid by them.

The refund claims were rejected by the authorities below on the ground that the shipping bills involved were assessed finally and no appeal was filed by the appellant against the same.  Therefore, the assessment has become final and the refund claims were not maintainable. The Commissioner (Appeals) also rejected their refund claims.

The appellant submitted that at the time of the filing of the shipping bills by the appellant, the Adjudicating Authority passed an order of demanding export duty from the appellant based on WMT instead of DMT, without assigning any reason and in terms of  Section 17 (5) of the Customs Act, 1962, no speaking order was passed within 15 days.  In those circumstances, the assessment done by the Adjudicating Authority is not final and realizing by the appellant, they have paid excess export duty, and they filed a refund claim, which was rejected by the authorities below.

The Adjudicating Authority without assigning any reason, demanded duty based on WMT in terms of  Section 17 (4) of the Customs Act, 1962.  As per the said provisions, where on verification or otherwise, it is found that the selfassessment is not done correctly, the proper officer may, without prejudice to any other action, which may be taken under this Act, reassess the duty leviable on such goods. 

Further, Section 17 (5) of the Customs Act, 1962, mandates that if any order is passed by the proper officer under Section 17 (4) of the Act, he shall pass a speaking order on the re-assessment within 15 days from the date of reassessment of shipping bill.  

A two-member bench comprising Mr Ashok Jindal, Member (Judicial) And Mr Rajeev Tandon, Member (Technical)  viewed that the re-assessment of the shipping bill is not final.  Therefore, the appellant has no reason to challenge the assessment of the shipping bills.  In those circumstances, the reasons for denying the refund to the appellant are not sustainable.  

THE CESTAT set aside the impugned order and directed the adjudicating authority/proper officer to pass a speaking order under Section 17 (5) of the Act and thereafter, if any refund claim is maintainable, the same is be decided by law.

To Read the full text of the Order CLICK HERE

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