The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed customs duty demand and held that decision on goods that are yet to be provisionally assessed is premature intervention.
The original order was passed, accepting the invoice value, came up for review on expiry of three years and renewal thereof, in order of continuance for a further period of three years, was sought to be quashed in appeal filed on behalf of the jurisdictional Commissioner of Customs who had proceeded in the manner permitted in section 129D (2) of Customs Act, 1962 and presumably on the supposition that the official in the Special Valuation Branch (SVB) had undertaken adjudicatory function vested in ‘proper officer’ intended by section 17 or section 18 of Customs Act, 1962.
The case is all about valuation, that aspect of assessment most dreaded by customs authorities in India, and which, historically, has seen reluctant aligning with international consensus by a tax administration that was never subtle in display of its apprehension.
Hence, in the context of the direction of the High Court, exposition of dilution of legislative intent keeping pace with the evolution of valuation mechanism by administrative response of anchoring discharge of that function to the intrusiveness of the past that we forbore from on the former occasion is warranted.
Valuation has, to the extent that ad valorem levies prevail, plagued assessment under customs statutes across the world and down the ages; at the same time, with this levy occurring at mutual boundaries, the need for seamless transition has been the imperative for conceptual, and even framework, alignment of valuation systems. The earliest, known as Brussels Definition of Value (BDV), informed Customs Valuation Rules, 1963 framed under the authority of section 14 in the recently legislated Customs Act, 1962.
A Division Bench comprising CJ Mathew, Technical Member and Ajay Sharma, Judicial Member observed that “Further, for the Tribunal to render a decision on goods that are, as yet provisionally assessed, would be a premature intervention. The time of finalization that should inevitably take place is also, as yet, uncertain. It is also apparent that procedure does not deter the finalization of an assessment for want of decision by the Tribunal or, should such need arise, by the Supreme Court.”
“Accordingly, we set aside the impugned order and restore the appeal preferred at the instance of the jurisdictional Commissioner of Customs before the first appellate authority for a fresh disposal. Appeal is, thus, allowed by way of remand” the Tribunal concluded.
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