In search of the proper officer

EXPERT EYE

In Customs, the issue that is being agitated for sometime is about when an aggrieved assessee can file an appeal and when can he file a refund claim. Sometimes the Assistant Commissioner in-charge of appraising passes an assessment order, rather than just counter signing the bill of entry. This happens when the taxpayer wants the Assistant Collector to issue speaking order giving reasons for the assessment. Regarding these cases, there is no doubt that only appeal can be filed.

Doubt arises whether the routine counter signature of Assistant Commissioner on the bill of entry can be taken as an assessment order. If it is an assessment order, then one can only file an appeal. If not, only refund claim can be filed. The different Custom Houses followed either of the above two practices. Some of them treated counter signature of Assistant Commissioner as an order of assessment, whereas other Custom Houses treated them as routine assessment. The issue went to Tribunal and the Supreme Court also. There are two Supreme Court cases, one in the case of Collector of Central Excise, Kanpur vs. Flock (India) Pvt Ltd 2000(120)ELT285 (SC) and the other in the case of Priya Blue Industries Ltd vs. Commissioner of Customs (Preventive) 2004(172)ELT145 (SC). Both of them have upheld that an order of assessment passed by the Assistant Commissioner in-charge of appraisement or classification are appealable orders and no refund claim can be filed and only an appeal can be filed before the Commissioner (appeal). These judgments, however, did not consider that there are cases of routine signatures by Assistant Commissioners which cannot possibly be taken as 'order of assessment'. It was not pointed out to the Supreme Court that, if it is done, certain conceptual contradictions would arise as discussed below.

The proper officer, under Section 27 of the Customs Act, for assessment, is an Assistant Commissioner. If we take the position that his order of assessment cannot be changed by another Assistant Commissioner, then how can a demand be issued (changing the assessment) under Section 28 by an Assistant Commissioner? Or how can an amendment of bill of entry, even after assessment and clearance of goods, be permitted by an Assistant Commissioner under Section 149?

This contradiction can be removed if under Section 27(1)(i) of the Customs Act, the expression of 'order of assessment' is modified by adding an explanation that this order of assessment will only refer to regular adjudication order of assessment and not routine signature of bill of entry.

This will also solve the problem of having now reduced the refund Section into a redundant section. If no assessment cases go to the refund section, then it will only deal with short landing and pilferage cases, which are not really important issues. Under such a situation, the assessee misses an opportunity to go to the refund section and sort out preliminary problems of submitting documents which they could not do earlier. When we were assistant Collectors in-charge of refund, we used to deal with all assessment cases and the assessee would get substantial benefit at this stage only. After that, the main controversy would go to the Commissioner (appeal). If the Refund Section becomes a virtual redundancy, the Commissioner (appeal) will do the same preliminary work which the refund section used to do.

The conclusion is that Section 27(1)(i) of the Customs Act should be amended to include only the actual adjudication orders and exclude the routinely countersigned cases. This will revive the refund Section as it was for more than a century and also bring conceptual parity in regard to proper officer under Section 27, 28 & 149.

smukher2000@yahoo.com