Bill Of Entry Amendment After Search Permissible Under Customs Act: Rajasthan High Court Upholds Relief To Ceramic Tableware

The Rajasthan High Court has recently observed that amendments in the Bill of Entry can be made even after a search is conducted, and such amendments cannot be refused merely because the error was detected by the department and not disclosed suo motu by the importer.

A division bench of Acting Chief Justice Sanjeev Prakash Sharma and Justice Sangeeta Sharma said that the purpose of Section 149 of the Customs Act, 1962 is to ensure proper assessment and that the power to allow amendment must be exercised reasonably.

“In our opinion, whether suo moto or on the basis of advice of the department may be through search or otherwise the amendments can always be made in the Bill of Entries and the purpose behind the provisions of Section 149 of the Act is to make proper assessment and the discretion which is left to the proper Officer to authorize any document to be amended has to be reasonable and for allowing smooth business to run.”

The court was hearing an appeal filed by the Commissioner of Customs against an order of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) which had allowed Ceramic Tableware Pvt. Ltd. to amend the Bill of Entry and correct the HSN Code.

The department had conducted a search in relation to goods imported by Ceramic Tableware Pvt. Ltd., which is engaged in the manufacture of tableware and crockery. One of the raw materials, Calcium Phosphate, had been shown in the Bill of Entry under Chapter 25 and the goods were cleared by the Customs authority.

During the search conducted on November 26, 2020, the company accepted that there had been a mis-declaration of the HSN Code due to a clerical error and agreed to pay the differential duty, which was deposited after applying the correct code.

The company thereafter filed an application under Section 149 of the Act seeking amendment of the relevant Bill of Entry. The adjudicating authority rejected the request on the ground that Section 149 would apply only where the mis-declaration had been disclosed suo motu, and not where it came to light after a search.

CESTAT set aside the rejection and held that the company was entitled to seek amendment of the Bill of Entry. The department challenged this order before the High Court.

Agreeing with CESTAT, the High Court observed:

“We find that the view taken by the CESTAT is in consonance with the provisions of the Act, it is apparent that if the Bills of Entries are based on a different Code, other than, what was required and clearance has also been given by the Customs Authority, then too corrections can be made. There is no embargo under Section 149 of the Act for not allowing the amendments merely because a search has been conducted.”

The court further noted that if the importer insists on the earlier declaration despite advice from the department, the preventive authorities may take action, but that would not justify refusing amendment where the law otherwise permits it.

Holding that no substantial question of law arose, the court confirmed the CESTAT order and dismissed the appeal.