TaxTMI 
TaxTMI 
2021 (8) TMI 906
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....-14/2019-20 Dated 12.04.2019 2. The factual matrix relevant for the disposal of these two appeals against the impugned order is as follows: 3. Directorate of Revenue Intelligence (DRI) got a specific information that the appellants, M/s. Two Step Trading Co. [1] imported shoes by mis-declaring them with an intent to evade customs duty. Based upon the said information, the container No. OOLU-8441988 covered by Bill of Entry No. 677535 dated 16.9.2014 was examined on 9 October, 2014 in presence of Customs Broker M/s. Evershine Customs (C&F) Pvt. Ltd. [2] On examination, it was found to be stuffed with cartons of different sizes wrapped with HDPE bags. Inventory of the goods was prepared in the form of Panchnama. It was observed that on most of the shoes, MRP was not affixed and they were bearing brand names as that of Adidas, Nike and Calidad, etc. In the Bill of Entry 435 cartons were declared but the actual number of cartons was short by 14 but the actual number of shoes was more than declared. The CB could not provide any details/ explanation for the said discrepancy. The goods were found to have been grossly mis- declared in terms of quantity, quality, descri....
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....o. 6773535 dated 16.09.2014 is rejected under Rule 12 o the CVR 2007 and the values of the impugned goods are re-determined under Rule 7 of the CVR-2007 and the value also determined in respect of goods seized at shop of the Importer as under:- a) Value of 8160 pairs of counterfeit shoes seized at ICD Tughlakabad, New Delhi is determined as Rs. 49,44,630/-; b) Value of 211 pairs of counterfeit shoes seized at shop of the Importer is determined as Rs. 1,04,902/-; c) Value of 2346 pairs of shoes seized at ICD Tughlakabad, New Delhi is re-determined as Rs. 5,81,738/-; d) Value of 733 pairs of shoes seized at shop of the Importer is determined as Rs. 2,31,505/-. ii) The seized 8160 pairs of counterfeit shoes at ICD Tughlakabad, New Delhi having determined value of Rs. 49,44,630/- are confiscated absolutely under Section 111(d) of the Customs Act, 1962; iii) The seized 211 pairs of counterfeit shoes seized at shop of the Importer having determined value of Rs. 1,04,902/- are confi....
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....eravarty and Shekhar Vyas, learned Counsel for the Appellants and Shri Rakesh Kumar and Shri Sunil Kumar, learned Authorised Representatives for the Department. 9. It is submitted on behalf of the appellants that order under challenge has violated the principles of natural justice as no opportunity of being heard was given to either of the appellants. It is submitted that none of the notices as mentioned in para 4.1 of the impugned order were ever received either by the appellant or by their Advocate despite that the communication address of their lawyer was also given to the department. The order is absolutely silent about the service of this notice upon the appellants. Order is impressed upon to be liable to be set aside on this score itself. 10. Further, it is submitted that show cause notice dated 07.04.2015 issued by the Additional Director, DRI, NOIDA is not valid in terms of judgement of Hon'ble Supreme Court in the case of Canon India Pvt. Ltd. vs. Commissioner of Customs in Civil Appeal No. 1827/2018 dated 9.3.2021 [6] wherein it was held that ADG of DRI is not the proper officer to issue the show cause notice and that DRI has no authority&nbs....
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.... arguments, learned Departmental Representatives submitted that it is a case of import where importer mis-declared the quantity as well as quality of shoes in the Bill of Entry No. 677535 dated 16.9.2014 filed by the CB on behalf of the importer. The declaration made thereunder was for unbranded shoes whereas on examination, branded shoes were found. There were 14 fewer cartons than declared but the number of shoes was much more than declared. Description and value of shoes was also found to be mis-declared. On being pointed out, the importer deposited the differential duty. Hence, the demand of duty and order of confiscating the goods, imposing penalties has rightly been passed against the importer. 14. It is submitted that the CB could not provide any valid explanation for the alleged mis-declaration which makes it abundantly clear that he has failed to discharge his liability under CBLR 2013. As no MRP was fixed on the goods seized, it was definitely due to his absence of due diligence. The CB has failed to properly examine the goods and has also failed to bring the matter to the notice of the Deputy Commissioner of Customs. He also had failed to advise his client to ac....
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.... Is the imposition of penalty under sections 114-A on the importer is valid? h) Is the imposition of penalty under section 112 (a) upon the CB valid? i) Have the principles of natural justice been violated? 17. On the first question identified, it is undisputed that on receiving specific information, the imported goods were examined and were found to be of a different quality and quantity than what was declared in the Bill of Entry. The Bill of Entry was prepared by the CB based on the papers given by the importer. The goods were examined in the presence of the CB under a panchnama and it is a matter of record that the goods were mis-declared in terms of quality as well as quantity. 18. When asked, the CB, who filed the Bill of Entry on the basis of papers given to him by the importer, could not explain the discrepancy. There is nothing on record to show that the CB had knowledge of the true nature of the goods or that the CB had any interest in the mis-declaration. The CB is expected to discharge his obligations under CBLR, 2013 which does not include having knowledge of what goods were actually imported or examining the imported goo....
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....such goods are to be cleared for home consumption or warehousing: Provided that the Board may, in such cases as it may deem fit, prescribe different time limits for presentation of the bill of entry, which shall not be later than the end of the day of such arrival: a bill of entry may be presented at any time not exceeding thirty days prior to] the expected arrival of the aircraft or vessel or vehicle by which the goods have been shipped for importation into India: Provided also that where the bill of entry is not presented within the time so specified and the proper officer is satisfied that there was no sufficient cause for such delay, the importer shall pay such charges for late presentation of the bill of entry as may be prescribed. (4) The importer while presenting a bill of entry shall make and subscribe to a declaration as to the truth of the contents of such bill of entry and shall, in support of such declaration, produce to the proper officer the invoice, if any, and such other documents relating to the imported goods as may be prescribed. (4A) The importer who presents a bill of entry shall ensure the....
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....uty on such goods. (2) The owner of any imported goods may, at any time before an order for clearance of goods for home consumption under section 47 or an order for permitting the deposit of goods in a warehouse under section 60 has been made, relinquish his title to the goods and thereupon he shall not be liable to pay the duty thereon; Provided that the owner of any such imported goods shall not be allowed to relinquish his title to such goods regarding which an offence appears to have been committed under this Act or any other law for the time being in force. 21. Thus, the importer cannot escape his responsibility of making a true and accurate and complete declaration of the imported goods in the Bill of Entry. If the importer has any doubts about the goods, there are sufficient safeguards which enable him to examine the goods before filing the Bill of Entry, request for the goods to be deposited in the warehouse or even relinquish his title to t....
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...., the importer will have to pay the duty. If the duty as assessed is paid and if the goods are not prohibited goods, an order permitting clearance of goods for home consumption is issued under section 47 by the proper officer who is usually called as 'out of charge' officer. 24. Once the order permitting clearance of goods for home consumption is issued under section 47, it results in the following: a) The goods cease to be imported goods [Section 2(25) "imported goods" means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption]; b) The person who imported them ceases to be the importer [Section 2 (26) "importer", in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner, beneficial owner or any person holding himself out to be the importer;] c) The imported goods cease to be dutiable goods [Section 2 (14) "dutiable goods" means any goods which are chargeable to duty and on which duty has not been paid;] d) Thereafter, there is no need for a Bill of Entry to be....
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....s, the import manifest and the bill of entry having been filed before the Collectorate of Customs (Imports) Mumbai, the same having been assessed and clearance for home consumption having been allowed by the proper officer on importers executing bond, undertaking the obligation of export, in our opinion, the Collector of Customs (Preventive), not being a "proper officer" within the meaning of Section 2(34) of the Act, was not competent to issue show cause notice for re-assessment under Section 28 of the Act. 29. It was further explained by the Hon'ble Supreme Court in Canon India Ltd. that the nature of the power to recover the duty, not paid or short paid after the goods have been assessed and cleared for import, is broadly a power to review the earlier decision of assessment. Such a power is not inherent in any authority. Indeed, it has been conferred by Section 28 and other related provisions. The power has been so conferred specifically on "the proper officer" which must necessarily mean the proper officer who, in the first instance, assessed and cleared the goods i.e. the Deputy Commissioner Appraisal Group. Relevant extract of this judgment is as follows: 9.....
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....the very officer who cleared the goods but may be his successor in office or any other officer authorised to exercise the powers within the same office. In this case, anyone authorised from the Appraisal Group. Assessment is a term which includes determination of the dutiability of any goods and the amount of duty payable with reference to, inter alia, exemption or concession of customs duty vide Section 2 (2) (c) of the Customs Act, 19624 . 12. The nature of the power to recover the duty, not paid or short paid after the goods have been assessed and cleared for import, is broadly a power to review the earlier decision of assessment. Such a power is not inherent in any authority. Indeed, it has been conferred by Section 28 and other related provisions. The power has been so conferred specifically on "the proper officer" which must necessarily mean the proper officer who, in the first instance, assessed and cleared the goods i.e. the Deputy Commissioner Appraisal Group. Indeed, this must be so because no fiscal statute has been shown to us where the power to re-open assessment or recover duties which have escaped assessment has been conferred on an officer other than ....
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....r has to be passed by the proper officer. If the officer of DRI is also the proper officer [under Section 28(11) or otherwise] and has done the reassessment, he must pass a speaking order. Any SCN under Section 28 can only arise after the goods have been cleared for Home Consumption and not before. This is because a demand under section 28 is in the nature of review of the assessment already done under section 17 by the proper officer. Without the assessment under section 17 being completed, there cannot be review under section 28 and the relevant date under section 28 for reckoning the time limit has not yet arisen. For this reason, the demand under section 28 in respect of the goods which have not yet been cleared for home consumption cannot be sustained and the answer to the question (c) which we raised is 'No demand under section 28 can be issued unless the goods have been cleared for home consumption and hence the demand does not sustain'. 33. The question (d) raised by us is regarding whether a demand under section 28 can be raised in respect of goods seized from the shop of the importer. These goods have evidently been cleared for home consumption and hence a demand....
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....3 (2001) 3 SCC 609 6 clearance. It must be clarified that the proper officer need not be the very officer who cleared the goods but may be his successor in office or any other officer authorised to exercise the powers within the same office. In this case, anyone authorised from the Appraisal Group. Assessment is a term which includes determination of the dutiability of any goods and the amount of duty payable with reference to, inter alia, exemption or concession of customs duty vide Section 2 (2) (c) of the Customs Act, 19624 ." 35. It is further observed that in Canon India Ltd. case Hon'ble Supreme Court has held as follows: "14. It is well known that when a statute directs that the things be done in a certain way, it must be done in that way alone. As in this case, when the statute directs that "the proper officer" can determine duty not levied/not paid, it does not mean any proper officer but that proper officer alone. We find it completely impermissible to allow an officer, who has not passed the original order of assessment, to re-open the assessment on the grounds that the duty was not paid/not levied, by the original officer who had decided to clear the g....
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....entive) Mumbai were not proper officers under section 17 and hence no demand under section 28 can be issued by them. It is noteworthy that the power of issuing the SCN under Section 28 has not been extended to officers other than to proper officers under section 17. The amendment only notified several other officers (including officers of DRI) as proper officers under section 17. Thus, now there are several 'proper officers' having jurisdiction over the same type of goods in the same area. Firstly, there is the AC/DC of the Appraising Group of the Custom House. Then there are officers of DRI, Customs Preventive, etc. who usually have a large territorial jurisdiction which overlaps with that of the Custom Houses. The validity of this amendment was under challenge in the case of Mangli Impex Ltd. vs. Union of India reported in [2016 (335) ELT 605 (Del) before the Hon'ble High Court of Delhi and it has been held that the retrospective application of this sub-section is ultra vires. The judgment and order of the Hon'ble High Court of Delhi was stayed by the Hon'ble Supreme Court in Union of India vs. Mangali Impex Ltd. reported in [2016 (339) ELT A 49 (SC)]. Thus, as on dat....
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.... This section does not require the proper officer under section 17 to issue a notice. This is in the nature of anti-smuggling function of the department and notices can be issued by officers of DRI and so far, we are not aware of any judicial decisions holding otherwise. Needless to say that the SCN must be accompanied by the Relied Upon Documents(RUDs) as it did in this case. These RUDs included several statements recorded by the officers during the course of investigation. Such statements are relevant for either prosecutions or for other proceedings (such as quasi-judicial proceedings) under the Act subject to some conditions under section 138B which reads as follows: SECTION 138B. Relevancy of statements under certain circumstances. - (1) A statement made and signed by a person before any gazetted officer of customs during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains, (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by th....