Safeguard duty becomes enforceable only on Gazette publication, while short-levy recovery may proceed under customs notice

Section 28 of the Customs Act permits recovery of safeguard duty that was short levied or not levied without first setting aside the assessment, so the recovery notice was treated as valid. Section 8B of the Customs Tariff Act, read with the Safeguard Rules, applies the Customs Act framework to safeguard duty, including rate determination and related consequences under section 15. A safeguard notification operates from its publication in the Official Gazette: a bill of entry filed before publication was outside the levy, while a later bill of entry remained chargeable. The vessel's arrival in territorial waters was held irrelevant for this purpose.

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Issues: (i) whether safeguard duty not levied at the time of import could be recovered by issuance of notice under section 28 of the Customs Act, 1962 without first challenging the assessment; (ii) whether section 8B of the Customs Tariff Act, 1975 read with the Safeguard Rules makes the Customs Act, 1962 applicable for determining the rate and timing of safeguard duty; and (iii) whether the safeguard notification took effect from the date of its publication in the Official Gazette so as to apply to both consignments.

Issue (i): Whether safeguard duty not levied at the time of import could be recovered by issuance of notice under section 28 of the Customs Act, 1962 without first challenging the assessment.

Analysis: Where duty is short levied or not levied, section 28 permits recovery by issuance of show cause notice. The prior assessment need not first be set aside when the department seeks to recover duty that was omitted from levy. The principle of assessment finality applied only where an assessee seeks to undo a completed assessment to claim relief, not where the department proceeds for short levy. The notice was therefore held to be validly issued.

Conclusion: The recovery notice was valid and this issue was decided against the assessee.

Issue (ii): Whether section 8B of the Customs Tariff Act, 1975 read with the Safeguard Rules makes the Customs Act, 1962 applicable for determining the rate and timing of safeguard duty.

Analysis: Section 8B expressly provides that the provisions of the Customs Act, 1962 and the rules and regulations made thereunder apply, as far as may be, to safeguard duty, including provisions relating to date for determination of rate of duty, assessment, non-levy, short levy, refunds, interest, appeals, offences and penalties. The levy of safeguard duty was therefore governed by the Customs Act framework, including the rule for determining the relevant date under section 15.

Conclusion: The Customs Act, 1962 applies to safeguard duty for rate determination and allied consequences, and this issue was decided against the assessee.

Issue (iii): Whether the safeguard notification took effect from the date of its publication in the Official Gazette so as to apply to both consignments.

Analysis: Rule 14 provides that safeguard duty levied under the relevant rules takes effect from the date of publication of the notification in the Official Gazette. Accordingly, a bill of entry filed before publication could not attract the duty, even though the notification had been issued earlier. At the same time, a bill of entry filed after publication was chargeable because the notification was then in force. The date of entry of the vessel into territorial waters was held to be irrelevant for this purpose.

Conclusion: The notification did not apply to the first bill of entry filed before publication, but it applied to the second bill of entry filed after publication. This issue was partly in favour of the assessee and partly in favour of the Revenue.

Final Conclusion: The appeal succeeded only to the extent that safeguard duty was not leviable on the consignment covered by the bill of entry filed before publication of the notification, while the duty demand on the later consignment was sustained.

Ratio Decidendi: Where a statute expressly applies the Customs Act to safeguard duty, the department may invoke section 28 for short levy, but safeguard duty becomes enforceable only from the date the notification is published in the Official Gazette, and not merely from the date of issuance or from the date of the vessel's arrival in territorial waters.

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