In a recent ruling, the Delhi bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) has directed the Customs Commissioner to issue a new order after reviewing the Assessing Officer’s detailed order concerning the evaluation of 18 aluminum scrap import bills.
The respondent had submitted these Bills of Entry for the import of Aluminum Scrap, declaring the value of the goods and self-assessing the duty. However, the Assessing Officer questioned the declared value, noting discrepancies with contemporary import data, and requested evidence to substantiate the declared price. The respondent contended that the declared price was accurate and argued that if the Assessing Officer intended to revise the value, a speaking order was required.
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Following this, the Assessing Officer issued a speaking order rejecting the declared value and determining a new value. Aggrieved by this, the respondent filed 18 appeals with the Commissioner (Appeals), who ruled in favor of the respondent on May 6, 2021.
The department’s current appeals challenge this ruling. The impugned order noted that the Commissioner (Appeals) found that the Assessing Officer had not issued a speaking order, despite the respondent’s request. The Commissioner (Appeals) also stated that section 17(5) of the Customs Act mandates a speaking order when rejecting declared values and emphasized that the London Metal Exchange Bulletin prices should not be used for determining the value of scrap.
Counsel for the respondent, Ms. Reena Rawat, supported by Ms. Gunjan Tanwar, argued that the respondent was unaware of the speaking orders and thus could not present this to the Commissioner (Appeals). They highlighted that the department had a duty to present accurate information and had failed to do so, leading to the Commissioner (Appeals) making an incorrect finding.
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According to section 14 of the Customs Act, the transaction value of imported goods should be the actual price paid or payable, provided that the buyer and seller are not related and the price is the sole consideration for the sale. In cases where re-assessment is conducted under section 17(4), a speaking order is required within 15 days of the reassessment.
The Commissioner (Appeals) erroneously concluded that speaking orders for all 18 Bills of Entry were not issued. However, it is established that these orders were indeed passed. The Commissioner (Appeals) should not have sought to enhance the value beyond what was declared, as the speaking orders required by section 17(5) were not contested.
A two-member bench consisting of Justice Dilip Gupta (President) and P.V. Subba Rao addressed the department’s presentation of speaking orders for the 18 Bills of Entry. The bench determined that, given the new information provided, the case should be remanded to the Commissioner (Appeals) for a fresh review. The Commissioner (Appeals) is instructed to reassess the case based on the speaking orders and issue a new decision.
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Consequently, the tribunal has set aside the impugned order dated May 6, 2021. The department’s appeals have been allowed, and the Commissioner (Appeals) is directed to review the speaking orders and issue a revised order.
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