Court overturns duty demand, confiscation, and penalties by DRI due to lack of jurisdiction

The court set aside the impugned order, ruling in favor of the appellants, as the demand of duty on the current shipping bill and past shipping bills, confiscation of goods, fines, and penalties imposed based on the SCN issued by the DRI were found to be unsustainable due to lack of jurisdiction. The court emphasized that the actions taken by the DRI were beyond its scope as the proper officer to issue such notices.

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Issues Involved:
1. Sustainability of the demand of duty on the current shipping bill based on the SCN issued by the DRI.
2. Sustainability of the confiscation of goods in the current shipping bill and imposition of fines.
3. Sustainability of the demand of duty on past shipping bills based on the SCN issued by the DRI.
4. Sustainability of the penalties imposed with respect to past shipping bills based on the SCN issued by the DRI.

Detailed Analysis:

1. Sustainability of the demand of duty on the current shipping bill based on the SCN issued by the DRI:
The judgment scrutinizes whether the demand of duty confirmed in the impugned order, based on the SCN issued by the DRI, is sustainable. It is highlighted that the SCN was issued without jurisdiction since ADG, DRI is not ‘the proper officer’ to issue an SCN demanding duty under Section 28(4) as affirmed by the Supreme Court in Cannon India Ltd. vs. Commissioner of Customs. The court concluded that the demand of duty on the current shipping bill confirmed in the impugned order is not sustainable as it was not proposed in the SCN and hence is beyond its scope.

2. Sustainability of the confiscation of goods in the current shipping bill and imposition of fines:
The confiscation of goods and the imposition of fines were based on the reclassification of goods under Customs Tariff Heading 2610090, which was not proposed in the SCN. Consequently, the court determined that the confiscation of goods in the current shipping bill and the imposition of fines in the impugned order must be set aside.

3. Sustainability of the demand of duty on past shipping bills based on the SCN issued by the DRI:
The SCN for past consignments was issued by ADG, DRI under Section 28, who is not the proper officer to issue such a notice as per the ruling in Cannon India. Therefore, the impugned order confirming the demand of duty on past shipping bills is not sustainable and must be set aside.

4. Sustainability of the penalties imposed with respect to past shipping bills based on the SCN issued by the DRI:
The penalties imposed were based on the confiscation of goods under Section 113 due to mis-declarations in the Shipping Bills, which resulted from determinations under Section 28 by DRI. Since the reassessment of the exported goods under Section 28, which forms the basis for the penalties, fails, the penalties imposed in the impugned order with respect to past shipping bills also need to be set aside.

Conclusion:
The court set aside the impugned order and allowed the appeals with consequential relief to the appellants, emphasizing that the SCN issued by DRI was without jurisdiction and the subsequent actions based on it were unsustainable.

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