Bill of Entry is non-speaking order - not appealable under Section 128 of Customs Act, 1962

PJ/Case Laws/2011-12/1379

Case: HDFC BANK LIMITED Versus UNION OF INDIA

Citation: 2011 (271) E.L.T. 175 (Ker.)

Issue:- Bill of entry giving assessment order – not a speaking order contemplated under Section 128. For filing appeal under Section 128 the order can only be a speaking order under Section 17(5) of the Customs Act, 1926.

Brief Facts:- Petitioner-Company is engaged in carrying on banking business. They imported certain consignments of gold bars as per Exts. P1 and P2 Bills of Entry. However, contrary to their claims in the Bills of Entry the goods were assessed to a higher rate of duty. They cleared the goods by paying the higher duty assessed. In the bill of entry itself the petitioner registered their protest against such assessment, which was followed by Ext. P4 Letter of Protest also. Thereafter they requested for a speaking order to be passed by the Assessing Authority to enable them to challenge the assessment in appeal.

Since the Assessing Authority (3rd respondent herein) did not pass a speaking order, the petitioner filed Ext. P5 letter dated 30-1-2008 before the Assessing Authority requesting for a speaking order to enable them to file a meaningful appeal against the assessment made.

However, by letter dated 16-4-2008 the Assessing Authority informed them that since 1 years have lapsed since the clearance of goods covered by the Bills of Entry and no efforts have been made by the petitioner for preferring the appeal before the Commissioner (Appeals), the petitioner may approach the Commission (Appeals) for appellate remedies subject to eligibility, and the Bill of Entry itself could be considered as an appealable order of assessment. The petitioner submitted Ext. P8 letter before the Assessing Authority stating that the stand taken by him is not correct and as per law they are entitled to a speaking order against which they can file proper appeal under Section 128.

The Assessing Authority having not replied to Ext. P8, the appellant have filed this writ petition before the High Court seeking relief in the form of Mandamus to the Assessing Authority for passing a speaking order.

Respondent’s Contention:- Revenue contended that the petitioner had failed to approach the Appellate Authority within the period of limitation prescribed under the Act for filing an appeal. Once assessment has been made by the endorsement in the Bill of Entry, the bill of entry itself can be treated as an order against which the petitioner can file an appeal. Having not done so after more than two years, the appellant cannot come and claim for a speaking order to enable them to file an appeal overcoming the limitation. Revenue also relied on the decision of the Tribunal in Khemka Travels v. Collector of Customs [1992 (57) E.L.T. 458 (Tribunal)]. It would go to show that the appeals under the Customs Act unaccompanied by the assessment order by the Bill of Entry are maintainable under Section 128.

Reasoning of Judgment:- The High Court perused the procedure for assesseement prescribed under Section 17 of the Customs Act and noted that sub-section (5) of section 17 provides that when assessee objects to the assessment against their claim, the appropriate authority is duty bound to pass a speaking order. Admittedly the Assessing Authority has not done that. After not having performed their statutory duty, the Assessing Authority cannot be heard to contend that because the petitioner has not filed any appeal against the Bill of Entry itself, they cannot now claim for a speaking order for filing an appeal.

The High Court held that the decision of the Tribunal referred to by the Revenue is also of no use in this regard, in so far as it does not maintain that the petitioner shall file an appeal against the Bill of Entry despite the non-passing of speaking order. In fact that decision only says that even if without having for a speaking order, the petitioner files an appeal on the basis of Bill of Entry that would also be maintainable.

The High Court is of opinion that in view of the categorical provision under Section 17(5) it was mandatory on the part of the Assessing Authority to pass a speaking order, in so far as in the Bill of Entry itself the petitioner has registered against such assessment which was followed by Ext. P4. Therefore, the petitioner was perfectly justified in seeking for speaking order without which the petitioner cannot know the reasons for the assessment made by the 3rd respondent.

In fact the limitation for filing appeal under Section 128 would start only from the date of communication of the decision or order to the petitioner. Clearly Bill of Entry is not a decision or order contemplated under Section 128. It can only be an order under Section 17(5) which has to be a speaking order. When admittedly there is no speaking order passed by the 3rd respondent in this case, the petitioner is entitled to get a speaking order against which he can file an appeal within the period prescribed under Section 128 from the date of communication of that order to them.

Therefore, the Assessing Authority is directed to pass his speaking order in respect of the import in question and serve the same on the petitioner within a period of 15 days from the date of receipt of a copy of this judgment. Needless to say the petitioner would be entitled to file an appeal against that order within the period of limitation of purpose prescribed under Section 128 from the date of communication of that order.

Decision:- Writ petition allowed.

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PJ/Case Laws/2011-12/1379

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