The CESTAT, New Delhi in the matter of M/s. Holy Land Marketing Private Limited v. Commissioner of Customs, New Delhi [Customs Appeal No. 51055 of 2020 dated January 31, 2023] has held that a reassessment order cannot be issued under Section 17(5) of the Customs Act, 1962 (“the Customs Act”) after the goods have already been cleared for home consumption. Further held that, once clearance for home consumption is granted, the goods are no longer considered as “imported goods” and are no longer subject to customs duty and in case any mistake is identified in the assessment/ self-assessment, the importer has the option to file an appeal with the Commissioner (Appeals).
M/s. Holy Land Marketing Private Limited (“the Appellant”) had imported canned pineapple slices and filed Bill of Entry (“BoE”) on April 18, 2018 classifying them under the Custom Tariff Heading (“CTH”) 20082000 and as per its self-assessment, the Appellant paid the duties on May 2, 2018 and accordingly an order permitting clearance of goods for home consumption under Section 47 of the Customs Act was passed on the same date.
On May 4, 2018, the Appellant had submitted a letter to the Deputy Commissioner of Customs, making a request to reassess its BoE under CTH 08119010. The Deputy Commissioner passed an order dated January 31, 2019 (“the Reassessment Order”) and reassessed the goods under CTH 08119010.
This appeal has been filed by the Appellant against the Order-in-Appeal dated May 11, 2020 (“the Impugned Order”) passed by the Commissioner of Customs (Appeals) (“the Respondent”), whereby the Reassessment Order was set aside on the grounds that reassessment cannot be done once the goods had been cleared for home consumption, and held that, the Reassessment Order was not legal according to Section 17(5) of the Customs Act as the goods had already been given out of charge by the officer on May 2, 2018 and therefore, Reassessment Order could not have been issued.
Whether the Deputy Commissioner had the power to re-assess the goods under Section 17(5) of the Customs Act after the goods have been cleared for home consumption?
The CESTAT, New Delhi in Customs Appeal No. 51055 of 2020 held as under:
- Noted that, self-assessment can be checked by a proper officer, who may ask the importer or exporter to provide necessary documentation and if the assessment is found to be incorrect through verification, examination or testing of the goods, the official may reassess duty leviable on such goods. Further, when a proper officer performs a reassessment, they must issue a speaking order unless the importer or exporter accepts the reassessment in writing.
- Relied on the judgment of the Hon’ble Supreme Court in the matter of ITC Limited v. Commissioner of Central Excise [2019 (368) ELT 216 (SC) dated September 18, 2019] wherein, it was held that an appeal can be made to the Commissioner (Appeals) by the assessee or the Revenue Department.
- Further noted that, the Revenue Department can also review any assessment, including self-assessment, if duties have not been levied, under-levied, or under-paid and serve a notice to the importer or exporter under Section 28 of the Customs Act. Furthermore, reassessment of the BoE is not permitted, once an order permitting clearance of goods for home consumption is given for the BoE.
- Held that, the Deputy Commissioner made a mistake by issuing a Reassessment Order under Section 17(5) of the Customs Act after the goods had already been cleared for home consumption. This action was not within their authority as an assessment can only be made if the goods are still considered “imported goods” and “dutiable goods”.
- Further held that, once clearance for home consumption is granted, the goods are no longer considered as “imported goods” according to Section 2(25) of the Customs Act and are no longer subject to duty according to Section 2(14) of the Customs Act and if a mistake is identified in the assessment/ self-assessment, the importer has the option to file an appeal with the Commissioner (Appeals).
- Opined that, the Reassessment Order has been issued without any authority of law and has correctly been set aside by the Respondent.
- Upheld the Impugned Order keeping the classification of the imported goods open.
Section 2(14) of the Customs Act:
“”dutiable goods” means any goods which are chargeable to duty and on which duty has not been paid;”
Section 2(25) of the Customs Act:
“”imported goods” means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption;”
Section 2(26) of the Customs Act:
“”importer”, in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner, beneficial owner or any person holding himself out to be the importer;”
Section 17(5) of the Customs Act:
“17. Assessment of duty.–
(5) Where any re-assessment done under sub-section (4) is contrary to the self-assessment done by the importer or exporter and in cases other than those where the importer or exporter, as the case may be, confirms his acceptance of the said re-assessment in writing, the proper officer shall pass a speaking order on the re-assessment, within fifteen days from the date of re-assessment of the bill of entry or the shipping bill, as the case may be.”
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