Dimension Data India Pvt.Ltd vs The Commissioner Of Customs And ...
2021 Latest Caselaw 1076 Bom

                                                                    23.os.wpl.249.20.doc

S.S.Kilaje

                  IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                      ORDINARY ORIGINAL CIVIL JURISDICTION

                         WRIT PETITION (L) NO. 249 OF 2020

             Dimension Data India Private Ltd.                .. Petitioner
                          Versus
             Commissioner of Customs and Anr.                 .. Respondents

                                        ...............
              Mr. Sandeep Chilana with Shahana Manjesh i/by Ms. Farzeen
               Khambata for the Petitioner.

              Mr. J.B.Mishra for the Respondents.
                                        ...............


                                        CORAM        : UJJAL BHUYAN &
                                                       MILIND N. JADHAV, JJ.

DATE : JANUARY 18, 2021.

Judgment and Order (PER UJJAL BHUYAN, J.):

Heard learned counsel for the parties.

2. This petition under Article 226 of the Constitution

of India seeks a direction to the respondents to reassess the

customs duty in respect of Bills of Entry Nos. 2434172,

2436049, 2522910, 2805152 and 2968920 (annexed as

Annexure B colly. to the writ petition) by correcting the

Customs Tarif Heading (CTH) from 85176990 to 85176930.

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3. Facts lie within a narrow compass. However to put

the matter in proper perspective relevant facts are briefy

stated hereunder.

4. Petitioner is an importer and by the fve Bills of

Entry Nos. 2434172, 2436049, 2522910, 2805152 and

2968920 had imported 48 units of routers between

15.03.2019 to 25.04.2019. Details of the Bills of Entry are as

under:

Sr.No.    Bills of Entry       Date           Product       HSN (as
                No.                                       declared on
                                                             BoEs)
     1.     2434172        15.03.2019     NCS5500 8        85176990
                                          Slot Single
                                            Chasis
                                            (Cisco
                                           Routers)
     2.     2436049        15.03.2019         --do--       85176990
     3.     2522910        25.03.2019         --do--       85176990
     4.     2805152        11.04.2019         --do--       85176990
     5.     2968920        25.04.2019         --do--       85176990

5. During internal audit, it realised that it had made

inadvertent typographical error at the time of fling the Bills of

Entry by incorrectly declaring the CTH as '85176990' instead

of correct CTH '85176930'. It is stated that for goods under

CTH 85176930, rate of duty is NIL whereas in respect of

goods under CTH 85176990, rate of duty is 20%. Because of

such inadvertent error, petitioner had to make excess

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payment of basic customs duty to the extent of

Rs.14,50,01,413.00.

6. Immediately on detecting the inadvertent error,

petitioner submitted a letter dated 07.06.2019 before

respondent No.2 requesting correction in the Bills of Entry.

Petitioner received a communication dated 25.10.2019 from

respondent No.2 declining the request as the petitioner had

not obtained an order of re-assessment or appealed against

the self-assessment done on the Bills of Entry.

7. Petitioner fled a detailed representation dated

21.11.2019 requesting respondent No.2 to pass a re-

assessment order in terms of section 17(4) of the Customs

Act, 1962 (briefy "the Customs Act" hereinafter) read with

section 149 of the said Act by making suitable modifcation to

the Bills of Entry. This was followed by several reminders,

oral as well as written. However, respondent No.2 has not

taken any decision for re-assessment of the self assessed Bills

of Entry.

8. Aggrieved, present writ petition has been fled

seeking the reliefs as indicated above.

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9. Respondents have fled a common reply afdavit. Stand

taken in the afdavit is that petitioner had imported goods

declared as routers under fve Bills of Entry bearing

Nos.2434172, 2436049, 2522910, 2805152 and 2968920.

The Bills of Entry were facilitated under the Risk

Management System (RMS) with no assessment and no

examination. It is stated that petitioner had self assessed the

Bills of Entry in terms of section 17 of the Customs Act and

had classifed the goods under CTH '85176990' instead of

'85176930' because of which it now claims of having made

excess payment of customs duty.

9.1 Regarding request of the petitioner for re-

assessment of the Bills of Entry, stand taken is that

respondent No.2 had informed the petitioner that consequent

upon amendment to section 17 of the Customs Act made in

the year 2011, concept of 'self-assessment' has been

introduced in the Customs Act efective from 08.04.2011

which provides for self-assessment of duty on imported

goods by the importer himself by fling Bill of Entry in the

electronic form. Therefore, burden is on the importer to

ensure that he declares the correct classifcation and applies

the correct rate of customs duty.

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9.2 The Bills of Entry in question were assessed by

the petitioner and such Bills of Entry upon self-assessment

itself would be an order of assessment. However, no appeal

has been preferred against such assessment order.

Consequently, no order for re-assessment has been obtained.

Therefore, petitioner has been informed that request for

amendment of the Bills of Entry in question could not be

accepted.

9.3 In the present case, petitioner had self assessed

the Bills of Entry in terms of section 17 of the Customs Act.

Bills of Entry were facilitated under the Risk Management

System (RMS). The goods have since been out charged.

Process of import is complete. To re-open the assessment at

this stage, petitioner is required to challenge the order of

assessment by fling appeal before the Commissioner of

Customs (Appeals).

9.4 Reference has been made to an order passed by

this Court in the case of M/s. Maharashtra Cylinders Pvt.

Ltd. Vs. CESTAT, Mumbai1 wherein it has been held that

self assessment can be challenged for seeking any relief.

Further reference has been made to the decision of the

1 2010(259) ELT 369 Bom.

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Supreme Court in the case of M/s. ITC Ltd. Vs.

Commissioner of Central Excise Kolkata-IV2 in support

of the contention that if the petitioner is aggrieved by the

order of assessment, he is required to fle an appeal before

the Commissioner of Customs (Appeals) and seek its remedy

under section 128 of the Customs Act. Without exhausting the

remedy of appeal it is not open to the petitioner to invoke the

writ jurisdiction. Therefore, the writ petition is liable to be

dismissed.

10. Learned counsel for the petitioner has referred to

the request made by the petitioner on 07.06.2019 to

respondent No.2 for re-assessment of the Bills of Entry

because of inadvertent error in classifcation of the goods.

Reference has also been made to the reply given by

respondent No.2 to the petitioner on 25.10.2019 wherein it

was pointed out that since no appeal has been fled by the

petitioner and since no order for re-assessment has been

obtained, request for amendment of the Bills of Entry could

not be accepted. Thereafter, learned counsel for the

petitioner has taken us to the detailed representation

submitted by the petitioner before respondent No.2 on

21.11.2019 whereby and whereunder request was made for

2 (2019) 17 SCC 46

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re-assessment of the fve Bills of Entry by correcting the CTH

code in terms of section 17(4) read with section 149 of the

Customs Act.

10.1 . Referring to the aforesaid provisions of the

Customs Act, learned counsel submits that respondents are

fully empowered to rectify the mistakes which were

inadvertently made in the fve Bills of Entry and thereafter

pass the order of re-assessment. Failure to do so would

amount to abdication of duty as conferred upon them by law.

10.2. Learned counsel has placed before us a

compilation of notifcations and case laws wherefrom he

submits that respondents have the power to make the

corrections as requested by the petitioner and pass re-

assessment orders.

11. In his reply submissions, Mr. Mishra, learned

counsel for the respondents has extensively referred to the

reply afdavit fled by the respondents and submits that if the

petitioner is aggrieved by the order of self assessment, he

should prefer appeal against such order before the

Commissioner of Customs (Appeals) under section 128 of the

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Customs Act. In support of his contention, he has placed

reliance on the decision of the Supreme Court in ITC Limited

Vs. Commissioner of Central Excise, Kolkata IV (supra)

more particularly to paragraphs 43 and 47 thereof which are

extracted hereunder :

"43. As the order of self-assessment is nonetheless an assessment order passed under the Act, obviously it would be appealable by any person aggrieved thereby. The expression "Any person" is of wider amplitude. The Revenue, as well as the assessee, can also prefer an appeal aggrieved by an order of assessment. It is not only the order of reassessment which is appealable but the provisions of Section 128 make appealable any decision or order under the Act including that of self-assessment. The order of self-assessment is an order of assessment as per Section 2(2), as such, it is appealable in case any person is aggrieved by it. There is a specifc provision made in Section 17 to pass a reasoned / speaking order in the situation in case on verifcation, self-assessment is not found to be satisfactory, an order of reassessment has to be passed under Section 17(4). Section 128 has not provided for an appeal against a speaking order but against "any order" which is of wide amplitude. The reasoning employed by the High Court is that since there is no lis, no speaking order is passed, as such an appeal would not lie, is not sustainable in law, is contrary to what has been held by this Court in Escorts.

47. When we consider the overall efect of the provisions prior to amendment and post- amendment under the Finance Act, 2011, we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or self-assessment is modifed in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self- assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modifed under Section 128 or under other relevant provisions of the Act."

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12. In reply, learned counsel for the petitioner has

distinguished the decision of the Supreme Court in ITC

Limited (supra) and submits that Central Government itself

had issued notifcation way back on 02.05.2012 being

Notifcation No. 40/2012 which was amended in the year

2017 by empowering ofcers of the rank of Deputy

Commissioner or Assistant Commissioner of Customs to

exercise functions under section 149 of the Customs Act

after grant of order for clearance of goods under section 47 or

section 51 of the said Act as the case may be. He has also

referred to Circular No.45/2020-Customs of the Central Board

of Indirect Taxes and Customs (briefy 'the Board' hereinafter)

dated 12.10.2020 to contend that in respect of re-assessment

of Bills of Entry where re-assessment is requested after out

of charge has been given under section 47 of the Customs

Act, the same shall continue to be done by the Port

Assessment Group (PAG) as was done earlier. From the

compilation, he has pressed into service decision of the

Kerala High Court in GTN Textiles Limited vs. Union of

India3 and that of the Madras High Court in Usha

International Ltd. Vs. Assistant Commissioner of

Customs, Chennai4 in support of his contention that in a

3 2015 SCC Online Ker 39433 4 2019 (365) E.L.T. 56 (Mad)

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case of this nature, it is not necessary to prefer appeal when

power to make corrections of inadvertent mistakes or errors

leading to re-assessment has been conferred upon the

authorities. Finally, he places reliance on the decision of the

Madras High Court in M/s.Hewlett Packard Enterprise

India Private Limited Vs. Joint Commissioner of

Customs,5 in which case it has been specifcally held that in

a case of this nature, appropriate remedy is not that of appeal

but rectifcation of an error apparent on the face of the record

which existed at the time of clearance of the goods.

13. Submissions made by learned counsel for the

parties have been duly considered.

14. Short point for consideration is whether request of

the petitioner for correction of inadvertent mistake or error in

the self-assessed Bills of Entry and consequential passing of

orders for re-assessment is legal and valid ? Corollary to the

above is the question as to whether even in a case of this

nature, petitioner is required to be relegated to the remedy of

appeal ?

5 2020(10) TMI 970

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15. To answer the above queries, it would be apposite

to refer to relevant provisions of the Customs Act. Section 17

deals with assessment of duty. Sub-section (1) says that an

importer entering any imported goods under section 46, or an

exporter entering any export goods under section 50, shall,

save as otherwise provided in section 85 which deals with

stores which may be allowed to be warehoused, self-assess

the duty, if any, leviable on such goods. So sub-section (1)

provides for self assessment of customs duty by an importer.

15.1. As per sub-section (2), the proper ofcer may

verify the entries made under section 46 or section 50 and

the self assessment of goods referred to in sub-section (1)

and for this purpose examine or test any imported goods or

export goods or such part thereof as may be considered

necessary. The proviso deals with selection of cases for such

verifcation. In terms of sub-section (3), for the purpose of

verifcation under sub-section (2), the proper ofcer may

require the importer, exporter or any other person to

produce any document or information whereby the duty

leviable on the imported goods or export goods, as the

case may be, can be ascertained and thereupon, the

importer, exporter or such other person shall produce such

document or furnish such information.

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15.2. Thereafter, comes sub-section (4). Sub-section (4)

is relevant. It empowers the proper ofcer to go for re-

assessment if he fnds on verifcation etc. that self-

assessment was not done correctly. The same is extracted

hereunder :

" (4) Where it is found on verifcation, examination or testing of the goods or otherwise that the self- assessment is not done correctly, the proper ofcer may, without prejudice to any other action which may be taken under this Act, re-assess the duty leviable on such goods."

15.3 To complete the narrative, we may also mention

that sub-section (5) deals with a situation where any re-

assessment done under sub-section (4) is contrary to the

self assessment done by the importer or exporter. In such a

case the proper ofcer shall pass a speaking order in re-

assessment except in such cases where the importer or

exporter confrms acceptance of the re-assessment in

writing.

16. Thus, the scheme of section 17 from the

perspective of the importer (since in this case we are

dealing with imports) is that an importer upon entering his

imported goods is required to self assess the duty leviable

on such imported goods. This is subject to verifcation and

examination by the proper ofcer. If upon verifcation or

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examination etc. the proper ofcer fnds that the self

assessment is not done correctly, he may re-assess the duty

leviable on such goods. In a case where re-assessment is

contrary to self assessment and where the importer does

not confrm his acceptance of such re-assessment, the

proper ofcer shall pass a speaking order on the re-

assessment. Therefore, it is quite evident that though duty

is cast upon an importer to self assess the customs duty

leviable on the imported goods, a corresponding duty is

also cast upon the proper ofcer to verify and examine

such self assessment. Such verifcation and examination

has to be done in good faith and in the process of

verifcation or examination if the proper ofcer fnds that

there is misclassifcation of tarif head or wrong

classifcation of tarif head of the imported goods leading

to lesser levy of customs duty or excess levy of customs

duty, he has the power and authority under sub-section (4)

to make re-assessment and re-assess the duty leviable on

such goods.

17. Section 149 deals with amendment of documents.

It says that save as otherwise provided in sections 30 and 41

which deals with delivery of arrival manifest or import

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manifest or import report and delivery of departure manifest

or export manifest or export report, the proper ofcer may, in

his discretion, authorise any document, after it has been

presented in the customs house to be amended in such form

and manner and within such time, subject to such

restrictions and conditions, as may be prescribed. As per the

provisio, no amendment of a Bill of Entry or a shipping bill or

bill of export shall be so authorised to be amended after the

imported goods have been cleared for home consumption or

deposited in a warehouse, or the export goods have been

exported, except on the basis of documentary evidence which

was in existence at the time the goods were cleared,

deposited or exported as the case may be.

17.1. For ready reference, section 149 is extracted

hereunder :

"149. Save as otherwise provided in sections 30 and 41, the proper ofcer may, in his discretion, authorise any document, after it has been presented in the customs house to be amended [in such form and manner, within such time, subject to such restrictions and conditions, as may be prescribed]:

Provided that no amendment of a bill of entry or a shipping bill or bill of export shall be so authorised to be amended after the imported goods have been cleared for home consumption or deposited in a warehouse, or the export goods have been exported, except on the basis of documentary evidence which was in existence at the time the goods were cleared, deposited or exported, as the case may be."

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18. From a careful analysis of section 149, we fnd that

under the said provision a discretion is vested on the proper

ofcer to authorise amendment of any document after being

presented in the customs house. However, as per the

proviso, no such amendment shall be authorised after the

imported goods have been cleared for home consumption or

warehoused, etc. except on the basis of documentary

evidence which was in existence at the time the goods were

cleared, deposited or exported, etc. Thus, amendment of the

Bill of Entry is clearly permissible even in a situation where

the goods are cleared for home consumption. The only

condition is that in such a case, the amendment shall be

allowed only on the basis of the documentary evidence which

was in existence at the time of clearance of the goods.

19. This bring us to section 154 of the Customs Act

which deals with correction, clerical errors, etc. It says that

clerical or arithmetical mistakes in any decision or order

passed by the Central Government, the Board or any ofcer

of customs under the Customs Act or errors arising therein

from any accidental slip or omission may, at any time, be

corrected by the Central Government, the Board or such

ofcer of customs or the successor in ofce of such ofcer, as

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the case may be.

19.1. Section 154 of the Customs Act reads as under :

"154. Clerical or arithmetical mistakes in any decision or order passed by the Central Government, the Board or any ofcer of customs under this Act, or errors arising therein from any accidental slip or omission may, at any time, be corrected by the Central Government, the Board or such ofcer of customs or the successor in ofce of such ofcer, as the case may be.

20. Thus, section 154 permits correction of any clerical

or arithmetical mistakes in any decision or order or of errors

arising therein due to any incidental slip or omission. Such

correction may be made at any time.

21. From a conjoint reading of the aforesaid provisions

of the Customs Act, it is evident that customs authorities

have the power and jurisdiction to make corrections of any

clerical or arithmetical mistakes or errors arising in any

decision or order due to any accidental slip or omission at any

time which would include an order of self-assessment post

out of charge.

22. Having noticed and analysed the relevant legal

provisions, we may now turn to the decision of the Supreme

Court in ITC Ltd. Vs. Commissioner of Central Excise,

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Kolkata IV (supra). The question which arose before the

Supreme Court was whether in the absence of any challenge

to the order of assessment in appeal, any refund application

against the assessed duty could be entertained.

22.1 . From the question itself, it is clear that the issue

before the Supreme Court was not invocation of the power of

re-assessment under section 17(4) or amendment of

documents under section 149 or correction of clerical

mistakes or errors in the order of self-assessment made under

section 17(4) by exercising power under section 154 vis-a-vis

challenging an order of assessment in appeal. The issue

considered by the Supreme Court was whether in the absence

of any challenge to an order of assessment in appeal, any

refund application against the assessed duty could be

entertained. In that context Supreme Court observed in

paragraph 43 as extracted above that an order of self-

assessment is nonetheless an assessment order which is

appealable by "any person" aggrieved thereby. It was held

that the expression "any person" is an expression of wider

amplitude. Not only the revenue but also an assessee could

prefer an appeal under section 128. Having so held,

Supreme Court opined in response to the question framed

that the claim for refund cannot be entertained unless order

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of assessment or self-assessment is modifed in accordance

with law by taking recourse to appropriate proceedings. It

was in that context that Supreme Court held that in case any

person is aggrieved by any order which would include an

order of self-assessment, he has to get the order modifed

under section 128 or under other relevant provisions of the

Customs Act (emphasis ours).

22.2. Therefore, in the judgment itself Supreme Court

has clarifed that in case any person is aggrieved by an

order which would include an order of self-assessment, he

has to get the order modifed under section 128 or under

other relevant provisions of the Customs Act before he makes

a claim for refund. This is because as long as the order is

not modifed the order remains on record holding the feld

and on that basis no refund can be claimed but the moot

point is Supreme Court has not confned modifcation of

the order through the mechanism of section 128 only.

Supreme Court has clarifed that such modifcation can be

done under other relevant provisions of the Customs Act also

which would include section 149 and section 154 of the

Customs Act.

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23. In Maharashtra Cylinders Private Limited

(supra), a Division Bench of this court also reiterated the

proposition that unless an order of self-assessment is varied

or altered, question of refunding the duty paid on self-

assessment does not arise at all. Validity of an assessment

cannot be considered while dealing with a refund claim.

Therefore, this decision on the face of it is clearly

distinguishable and is not at all applicable to the facts of the

present case.

24. In the instant case, petitioner has not sought for

any refund on the basis of the self-assessment. It has sought

re-assessment upon amendment of the Bills of Entry by

correcting the customs tarif head of the goods which would

then facilitate the petitioner to seek a claim for refund. This

distinction though subtle is crucial to distinguish the case of

the petitioner from the one which was adjudicated by the

Supreme Court and by this Court.

25. Grievance of the petitioner is not on the merit of

the self-assessment as the petitioner is aggrieved by the

failure on the part of the respondents to carry out

amendment in the Bills of Entry by replacing the incorrect

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CTH by the correct one namely by replacing CTH '85176990'

with '85176930' which was declared inadvertently by the

petitioner at the time of fling the Bills of Entry. This request

of the petitioner, in our opinion, falls squarely within the

domain of section 149 read with section 154 of the Customs

Act. Upon amendment in the Bills of Entry by correcting the

CTH, consequential re-assessment order under section 17(4)

of the Customs Act would be in order.

26. Madras High Court in M/s.Hewlett Packard

Enterprise India Private Limited (supra) correctly held

that in a case of correction of inadvertent error, the

appropriate remedy would be seeking an amendment to the

Bills of Entry and not fling of appeal because there is no legal

faw in the order of self-assessment amenable to appeal but

only a factual mistake which can be rectifed by way of

amendment or correction. Such correction or amendment

has been sought for by the petitioner on the basis of

documents which were already in existence at the time of

release of the goods for home consumption.

27. The expression "mistake" appearing in section

154 of the Customs Act may be defned as something

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done unintendedly or through inadvertence. The section

itself says that the error in any decision or order should be

due to any accidental slip or omission. Moreover, it can be a

mistake of law or a mistake of fact. In all cases it need not

be an arithmetical error alone. It may connote errors which

can be discerned upon due verifcation. Having said so, we

may also indicate that power to amend documents available

under section 149 of the Customs Act read with correction of

clerical or arithmetical mistakes or errors in orders due to

accidental slip or omission under section 154 thereof is

diferent and distinct from the appellate power exercised

under section 128 of the Customs Act. The power of

amendment or correction, as the case may be, is vested on

the same ofcer who had passed the initial order or an

ofcer of equivalent rank. On the other hand, appellate

jurisdiction is directed to correct decisions or orders passed

by an inferior or lower authority. By its very nature an

appellate authority is superior to the authority which had

passed the order appealed against.

28. In the light of the above, we are of the view that

petitioner has made out a case for issuance of a direction to

the respondents for correction of the mistake or error in

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classifcation of the goods from CTH '85176990' to

'85176930' and thereby for amendment of the Bills of Entry.

Refusal of the respondents to look into the aforesaid

grievance of the respondents is therefore not justifed.

29. Accordingly, we direct respondent No.2 to consider

the prayer of the petitioner for amendment of the Bills of

Entry Nos. 2434172, 2436049, 2522910, 2805152 and

2968920 (annexed as Annexure B colly to the writ petition) by

exercising power under section 149 read with section 154 of

the Customs Act and thereafter pass an appropriate order

under section 17(4) of the Customs Act after giving due

opportunity of hearing to the petitioner.

30. The above exercise shall be carried out within a

period of six weeks from the date of receipt of a copy of this

judgment and order.

31. Writ petition is disposed of accordingly. However,

there shall be no order as to costs.

[ MILIND N. JADHAV, J. ] [ UJJAL BHUYAN, J. ]

Digitally signed by Ravindra Ravindra M.

           Amberkar
M.         Date:
Amberkar   2021.01.27
           16:16:33
           +0530
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