2021 (3) TMI 1034 - HC - Customs

Supreme Court rules on customs duty dispute over coal classification, emphasizing proper authority for recovery.

The Supreme Court quashed an order by the Additional Director General of the Directorate of Revenue Intelligence, which levied duty and penalty on an ... Jurisdiction - proper officer to issue SCN - Additional Director General, Directorate of Revenue Intelligence - HELD THAT:- The issue is no longer res integra and that the Hon'ble Supreme Court in M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [2021 (3) TMI 384 - SUPREME COURT] had held that the expression “the proper officer” occurring in Section 28 of the Customs Act will only refer to the assessing officer who passes the original order making assessment. In the case also, the show cause notice was issued by the Additional Director General of DRI. The Hon'ble Supreme Court had held that he cannot be termed as “the proper officer”. Since the entire proceedings were initiated by an authority who lacked the jurisdiction, applying the aforesaid decision of the Hon'ble Supreme Court the order impugned in these writ petitions is quashed. Petition allowed - decided in favor of petitioner. Issues: Misrepresentation of imported goods as steam coal, Jurisdiction of the proper officer under Section 28 of the Customs ActThe judgment pertains to writ petitions filed by an importer/company and its Managing Director challenging an order passed by the Additional Director General, Directorate of Revenue Intelligence, levying duty and penalty for misrepresentation of Bituminous coal as steam coal. The petitioners imported steam coal during March to November 2012, with bills of entries filed for each consignment. The Customs authority accepted the classification as steam coal, allowing clearance. However, a show cause notice was issued under Section 28 of the Customs Act, alleging misrepresentation. The petitioners' reply was rejected, leading to the impugned order. The respondent sought to sustain the order, but the petitioner relied on a Supreme Court judgment (M/s.Canon India Private Limited v. Commissioner of Customs) interpreting 'the proper officer' in Section 28. The Supreme Court held that only the assessing officer who initially cleared the goods can exercise the power of recovery after assessment. As the show cause notice was issued by the Additional Director General, not the proper officer, the impugned order was quashed, following the Supreme Court's decision. The writ petitions were allowed, with no costs awarded, and connected miscellaneous petitions were closed.