TaxTMI 
TaxTMI 
TaxTMI 
2014 (10) TMI 836
X X X X Extracts X X X X
X X X X Extracts X X X X
....6. It was noticed by the Revenue that they had imported goods at concessional rate of duty under Notification No. 25/99, dated 28-2-1999 and used the same for manufacture of parts of connectors which are not specified in the list appended to the said notification. Thus, the assessee violated the provisions of the Customs Rules, 1996. Therefore, show cause notices came to be issued to the assessee by the Deputy Commissioner, Central Excise on 21-8-2001 requiring the assessee to show cause why differential duty for the period from 27-8-1996 to 30-4-2001 should not be recovered from them. The assessee on receipt of the said notice filed its objections contending that notice issued is one without jurisdiction and they substantiated their act on merits also. They also contended that the notice issued without prior approval of the Chief Commissioner of Customs is also without jurisdiction. Overruling the said objection, the original authority confirmed the demand made in the show cause notice. Aggrieved by the same, the assessee preferred an appeal to the Commissioner (Appeals) which also came to be dismissed. Aggrieved by the same, the assessee preferred an appeal to the CESTAT which al....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly held by the Tribunal. Therefore, he submits that no case for interference is made out. 5. In the light of the facts and rival contentions, the point that arises for consideration in this appeal is :- "Whether the Deputy Commissioner of Excise is the Proper Officer who has the jurisdiction to initiate proceedings under Rule 8 of the Customs Rules for recovery of duty which is not levied?" 6. The show cause notice is issued by the Deputy Commissioner of Central Excise by virtue of Rule 8 of the Customs Rules, 1996, which reads as under :- "Rule 8. Recovery of duty in certain case. - The (Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise) shall ensure that the goods imported are used by the manufacturer for the intended purpose and in case they are not so used take action to recover (the amount equal to the difference between the duty leviable on such goods but for the exemption and that already paid, if any, at the time of importation, along with interest, at the rate fixed by notification issued under Section 28AB of the Customs Act, 1962, for the period starting from the date of importation of the goods on which the exemption wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... recovery of duty is the proper officer. The proper officer is defined under Section 2(34) as under :- "proper officer", in relation to any functions to be performed under this Act, means the officer of Customs who is assigned those functions by the Board or the (Commissioner of Customs)" Therefore, from the definition of "proper officer", it is clear that proper officer is a person who is assigned the functions to be performed under the Customs Act by the Board or the Commissioner of Customs. The Supreme Court had an occasion to interpret this provision in the case of Commissioner of Customs v. Syed Ali [2011 (265) E.L.T. 17 (S.C.)] at Paragraphs 13 and 14, which reads thus :- 13. Section 2(34) of the Act defines a "proper officer", thus : "2. Definitions. - ................. (34) "proper officer", in relation to any functions to be performed under this Act, means the officer of Customs who is assigned those functions by the Board or the Commissioner of Customs". It is clear from a mere look at the provision that only such Officers of Customs who have been assigned specific functions would be "proper officers" in terms of Section 2(34) of the Act. Specific ent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct. Any other reading of Section 28 would render the provisions of Section 2(34) of the Act otiose. The Supreme Court in the case of Subhash Photographics v. Union of India [1993 (66) E.L.T. 3 (S.C.)] dealing with the power of making rules under Section 156 and Regulations under Section 157 of the Customs Act has held as follows :- "12. Section 156 confers upon the Central Government the power to make rules "consistent with this Act generally, to carry out the purposes of this Act". Sub-section (2) of Section 156 again specifies certain matters with respect to which rules can be made. The specification in sub-section (2) is without prejudice to the generality of the power conferred by sub-section (1). 13. The Parliament has appointed two authorities i.e., Central Government and the Board to make rules/regulations to carry out the purposes of the Act generally. The character of Rules and of the Regulations made under Sections 156 and 157 respectively is the same-both constitute delegated legislation. The Regulations are subject to an additional limitation viz., they should not be contrary to the Rules made under Section 156. The purpose of sub-section (2) in both the del....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er the scheme of the Act, the power of the Central Government, the power of the Board and the power of persons to whom the Board entrusts responsibilities are clearly defined and they are mutually exclusive. In this background, we may look at the Rules framed by the Central Government by virtue of the power conferred on them under Section 156. While framing the Rules for registration of assessees who claim benefits under notifications, the Rule for recovery of duty in certain cases, entrusts the power to recover to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise who are not the Customs Officers under the Act. When the power of recovery of duty is expressly conferred on the Customs Officers under Section 28, who is the "proper officer" who should be entrusted with the responsibility, is vested with the Board or Commissioner of Customs under Section 2(34). The Central Government had no power to entrust that responsibility to a person who is not even a Customs Officer. Therefore, the said Rule runs counter to Section 28 read with Section 2(34) of the Act and to that extent, it cannot be enforced. 9. When the Apex Court in the case of Sayed A....