As a relief to Bharti Airtel, the Banglore Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has directed the department to wait the outcome of the DRI investigation before rejecting the request for correction of the declared value in the bill of entry.
The appellant/assessee imported telecom equipment from an overseas supplier, and as per the purchase order placed by the appellant, the unit price of the goods is 6299 USD, and the appellant placed an order for 10 units.
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The appellant submitted that at the time of supply, the overseas supplier had inadvertently mentioned the total price as 629900 USD in place of 62990 USD. Since DRI had booked a case regarding the valuation of goods, goods were provisionally assessed and cleared on payment of customs duty of Rs. 61,94,341.70 by considering the invoice value as 629900 USD.
On realizing the mistake, the appellant made a request for amendment of the bill of entry after a lapse of about four and a half years, and it was rejected by the adjudication authority on the ground that the request for amendment amounts to amendment of major parameters of the bill of entry, which has bearing on the revenue.The Adjudication Authority also observed that the investigation into the issue of valuation unearthed by the DRI is still pending, hence the request cannot be considered.
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An appeal was filed before the Commissioner (Appeals), which was rejected and dismissed the appeal since the assessment has been made on a provisional basis on account of an investigation regarding valuation by DRI. The appeal was rejected on the ground that the claim of the appellant is premature and that the same can be taken into consideration at the time of finalization of the provisional assessment, if permissible under the law.
It was contended that there was an omission on the part of the overseas supplier to mention the correct amount in the invoice, and on realizing the same, a revised invoice was issued, and adjudication authorities are bound to allow rectification of mistakes under Section 154 of the of the Customs Act, 1962. The bill of entry can be amended to rectify the clerical error in terms of Section 154 of the Customs Act, 1962.
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The department contended that if payment of excess duty is due owing to calculation mistakes committed by importers on account of the faulty functioning of the computer, the importer is guilty of negligence.
The two member bench of P.A. Augustian (Judicial Member) and Pullela Nageswara Rao (Technical Member) have observed that, since the goods were cleared provisionally, records will be available with the respondent to verify the facts for the final assessment. Further viewed that the amendment was directly connected with the investigation conducted by DRI, and in such cases, the Department would have awaited the outcome of the DRI investigation before rejecting the request for correction or amendment of the declared value.
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While quashing the order, remanded the matter back and directed the Adjudication Authority to consider the outcome of the DRI investigation. If there is no allegation regarding misdeclaration of the value and no SCN has been issued so far, considering the fact that the remedy of amendment under Section 154 was sought during the pendency of provisional assessment, the amendment as sought by the appellant shall be considered based on the outcome of the DRI investigation regarding the unit price of the imported goods.
The provisional assessment should be finalized, accordingly, within a period of 3 months after the receipt of the final order, and an appropriate order should be passed in accordance with the law after giving an opportunity of hearing to the appellant.
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