Bombay High Court directs Customs Authority for Reassessing Customs Duty on Bills of Entry

Bombay High Court directs Customs Authority for Reassessing Customs Duty on Bills of Entry

The Bombay High Court (HC) coram consisting of Justices Ujjal Bhuyan and Milind N. Jadhav directed Commissioner of Customs & Arn. (respondents) to consider the prayer of M/s Dimension Data India Private Ltd.(petitioner) for amendment of the Bills of Entry The Bombay HC directed the respondents to exercise their power under Section 149 read with Section 154 of the Customs Act and to pass an appropriate order under Section 17(4) of the Customs Act by giving due opportunity of hearing the petitioner.

The factual matrix of the case is that the petitioner claimed to be engaged in imported goods (routers) classifying them under Customs Tariff Heading (CTH) 85176990 instead of 85176930 which is a specific tariff heading leading to excess payment of customs duty.

During an internal audit, the petitioner realized that it had made an inadvertent typographical error at the time of fling the Bills of Entry by incorrectly declaring the CTH as '85176990' instead of correct CTH '85176930'.

The petitioner stated that for goods under CTH 85176930, the rate of duty is NIL whereas, in respect of goods under CTH 85176990, the rate of duty is 20%. Because of such inadvertent error, the petitioner had to make excess payment of basic customs duty to the extent of Rs.14,50,01,413.

It was alleged by the petitioner that soon after being aware of the fact; they made a request with the jurisdictional Deputy Commissioner of Customs (Proper Officer) for amendment of Bill of Entries (BoE) in terms of Section 17(4) read with 149 and Section 154 of Customs Act. Since the request was not processed by the Deputy Commissioner, they filed a writ petition before the HC for invoking Article 226 of the Constitution of India.

The respondents had informed the petitioner that consequent upon amendment to section 17 of the Customs Act made in the year 2011, the concept of 'self-assessment' has been introduced in the Customs Act effective from 8 April 2011 which provides for self-assessment of duty on imported goods by the importer himself by fling Bill of Entry in the electronic form.

Hence, now the burden lies on the importer for ensuring that he declares the correct classification and applies the correct rate of customs duty.

Issue

- Whether the 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?

- Whether even in a case of this nature, petitioner is required to be relegated to the remedy of appeal?

After hearing the submissions of both the parties the HC stated, "From a careful analysis of Section 149, we find that under the said provision, adiscretion is vested on the proper officer to authorize amendment of any document after being presented in the customs house.

However, as per the proviso, no such amendment shall be authorized after the imported goods have been cleared for home consumption or warehoused, etc. except based on documentary evidence that was in existence at the time the goods were cleared, deposited or exported, etc."

The Court held, "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."

While referring to Section 154 the HC stated, "It permits correction of any clericalor 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."

The HC held, "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."