BRAKES INDIA LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THIS is an appeal filed by M/s. Brakes India Ltd. Padi, Chennai against the Order in Appeal No. C.Cus 376/06 dated 25/05/06, passed by the Commissioner of Customs (Appeal), Chennai. The facts of the case are that the appellants are engaged in the manufacture of brake assemblies using also raw materials imported under DEPB scheme. The assessee used to avail exemption under Notification No. 45/2002 Cus dated 22.04.2002 debiting the DEPB credit equal to the duty payable. The assessee used to discharge the duty liability as regards the basic customs duty using DEPB credit and pay the additional duty of customs in cash. They used to take credit of CVD paid in their cenvat account. The exim policy provisions had prohibited taking of cenvat credit of CVD paid using DEPB credit, in the mean time, in the year 2003, the Tribunal decided in the case of Polyhose India Pvt. Ltd. v. CCE and vide Final Order No. 1050/2003 dated 05/12/2003 of SZB, Chennai in the case of Spic Ltd. v. CCE, that importers paying CVD using DEPB credit could also take cenvat credit of the same. Following the above decisions, the appellants had paid CVD by debit in DEPB book and taken credit for several imports made from July 2003. As the inputs had not suffered CVD, the jurisdictional Central Excise officers initiated proceedings to recover such credit of CVD taken by the assessee. The credit involved in all such imports by the assessee was over Rs. 86.23 lakhs. The assessee approached the CBEC seeking clarification as to their eligibility to cenvat credit in respect of the impugned payments of CVD in view of the Tribunal orders and its re -credit in DEPB book if they paid the CVD already taken, in cash. The Board informed them that the department had not accepted the said orders of the Tribunal and that they may approach the jurisdictional Commissioner of Customs as regards the re -credit of the CVD paid in the DEPB book. When they pursued the matter with the Custom House, the Additional Commissioner of Customs informed them that the Custom House had not allowed any recredit in the recent past and rejected their request for recredit of the CVD (if paid in cash) in the DEPB book. The impugned order has been passed on appeal by the assessee against the above communication of the Additional Commissioner of Customs dated 17/06/04.

(2.) THE assessee's request in the appeal was for re -assessment of the imported goods whereby they would pay the CVD in cash so that the DEPB book could be recredited with equal amount. Before the lower appellate authority, the assessee had cited various case law in support of their plea that when alternative assessments were possible, the assessee could opt for any of them even after having chosen the benefit of a different assessment initially. The Commissioner observed that those decisions related to cases on the Central Excise side and availment of concession by an assessee who had initially availed the credit contrary to the condition of the relevant notification and was allowed the benefit of that notification on expunging the credit. Judgments cited were to the effect that when the benefit of two notifications were available, the assessee could choose the one more beneficial to it.

(3.) IN the impugned order, the Commissioner found that in the case before him, the assessee had sought relief of a different assessment after the goods had been assessed and cleared. The Commissioner observed that once an order of assessment had been passed, duty was payable based on that order unless it was revised under Section 28 of the Customs Act '62 (the Act) or modified in an order in appeal. A finally assessed bill of entry could not be reassessed in terms of Section 17(4) of the Act unless there was a good reason for the same or there was a valid order for the same from an appellate authority, as per the judgment of the Apex Court in the Priya Blue Industries Ltd. v. CC (Preventive) case. As per the said judgment, a request for re -assessment was not maintainable when the assessee had not challenged the order of assessment. The Commissioner also relied on the observation of the Apex Court inCCE, Kanpur v. Flock (India) Pvt. Ltd. to the effect that once an appealable order had been passed under the statute, unless the aggrieved party had chosen to exercise the statutory right of filing an appeal, it was not open to the party to question the correctness of the order of the adjudicating authority subsequently, by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing the order. Their lordships had observed that if that position was accepted then the provisions for adjudication in the Act and the Rules, would lose their relevance and the entire exercise would be rendered redundant. That would run counter to the scheme of the Act and would introduce uncertainty in the process of levy and collection of Excise duty. In the case of Priya Blue Industries Ltd. v. CC (Preventive) (supra) it was observed - -"Once an order of assessment is passed the duty would be payable as per that order, unless that order of assessment has been reviewed under Section 28 and/or modified in an appeal that order stands. So long as the order of assessment stands the duty would be payable as per that order of assessment". In the light of the above case law, the Commissioner examined whether the lower appellate authority could have re -assessed the subject Bills of Entry in terms of Section 17. The Commissioner found that Section 17(4) provided for re -assessment of goods offered for assessment when it was found on examination or testing or otherwise that any statement made in the entry or document or any information furnished was not true in respect of any matter relevant to their assessment. The re -assessment could be initiated by the department. The provision did not contemplate the appellant seeking re -assessment or change in the mode of payment of duty. The option for re -assessment was not available after the goods had been finally assessed. In the subject case, the Bills of Entry had been assessed as declared by the appellant. The lower authority was not competent to reopen the finalized assessment. The appellants could not also come up in appeal against the assessment as they had admittedly not been aggrieved by the completed assessment. The Commissioner also found that the assessee had not indicated its willingness to discharge the interest liability for the credit amount enjoyed since import of the impugned goods. Accordingly, he rejected the request of the assessee for re -assessment of the impugned goods to discharge the CVD in cash and to avail equal amount as credit in their DEPB book.