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  • Rajesh Audithyan

OFRT declared 20% of FOB value by oversight - Amendment of bill of entry & refund of excess duty

While filing the Bill of Entry, the importer did not file any ocean freight bill and therefore, the value of freight was taken as 20% of the FOB value and the goods were assessed to duty accordingly.


The importer noticed the mistake and immediately furnished the freight bill for the transaction and sought amendment of the Bill of Entry under Section 149 of the Customs Act, 1962. They also filed a refund claim for the excess duty paid.


The refund claim was rejected on the ground that the importer did not challenge the assessment and, therefore, in view of the decision of the hon'ble apex Court in the case of Priya Blue Industries and Flock India Pvt. Ltd. the refund is not permissible. The importer preferred an appeal before the lower appellate authority who vide the impugned order dismissed their appeal and hence the importer appealed before CESTAT.


Hon’ble CESTAT observations as follows :


When the Bill of Entry was filed they had also submitted the freight bill to the Customs Broker but the CB committed an error and did not submit the freight bill and, therefore, the goods were assessed taking 20% of the FOB value towards freight and accordingly the appellant discharged duty liability.


But immediately thereafter, they noticed the error and submitted a letter to the Dy. Commissioner of Customs, Nhava Sheva enclosing therewith copy of the Bill of Entry, duty paid challans and the freight invoices received from the steamer agent and sought amendment of the Bill of Entry under Section 149 of the Customs Act, 1962. This matter was kept pending by the department without taking any decision thereon.


In the instant case, it is clear from the records that the importer committed an error in not declaring the freight amount at the time of filing of the Bill of Entry and did not submit the invoice for the freight paid. But within a period of two weeks from the date of filing of the Bill of Entry, the importer produced the commercial invoice indicating the payment of freight vide invoice dated 02/04/2009 issued by the shipping agent and sought amendment of the Bill of Entry under Section 149 of the Customs Act, 1962.


Section 149 of the Customs Act, 1962 provides that:

“Save as otherwise provided in sections 30 and 41, the proper officer may, in his discretion, authorise any document, after it has been presented in the custom house to be amended 1[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.


Thus the only condition required to be satisfied for availing the provisions of Section 149 is that the documentary evidence on the basis of which the amendment is sought, should be in existence when the goods were cleared. In the instant case the Bill of Entry was filed on 21/04/2009 and the freight invoice indicating the amount of freight is dated 02/04/2009.


In other words, the documentary evidence which the appellant submitted was in existence when the Bill of Entry was assessed and the goods were cleared. It was only an inadvertent error committed by the CB in not furnishing the freight invoice along with the Bill of Entry. Powers of discretion under Section 149 has been provided to the Customs Officers to allow amendments in genuine cases. From the facts available on record and the notings made by the various sections of the Customs department, it is evident that the appellant's case is a genuine one.


In the present case there is a genuine error committed by the importer in not filing the freight bill at the time of filing of the Bill of Entry. When the error was noticed, immediately thereafter, the importer took action to rectify the mistake by making an application under Section 149 along with documentary evidence in support of the claim for actual freight.


Thus there is enough justification for the proper officer to exercise the power under Section 149. Powers are given to the officers to sub-serve justice and not to deny them. In the present case, the department ought to have allowed the amendment of the Bill of Entry under Section 149 and give consequential relief to the appellant hence declared importer is eligible for amendment of BoE and refund.


GABRIEL INDIA LTD VERSUS COMMISSIONER OF CUSTOMS (IMPORT) , NHAVA SHEVA, MUMBAI-II, CESTAT MUMBAI, Pronounced on 03 April 2013


Author Remarks :

1. In the above case Judgement was given on 03.04.13. But later Hon'ble Supreme Court in the case of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV on 18.09.2019 held that assessed Bill of Entry is appealable. Hence If importer wants to apply for refund of customs duty u/s 27, he should appeal against assessed bill of Entry within one year. The current position is that the importer has to appeal against self assessed BoE and simultaneously apply for refund.

2. The claim for refund cannot be entertained unless the order of assessment or self-assessment is modified in accordance with law by taking recourse to the appropriate proceedings.

3. Ocean Freight has to be declared as per actual cost and invoice has to be produced. If assessed higher side @20% by oversight , it is possible for BoE amendment and apply for refund of excess paid duty within one year.

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