TaxTMI 
TaxTMI 
2021 (8) TMI 906
X X X X Extracts X X X X
X X X X Extracts X X X X
....se 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, description and value and were accordingly detained on 9.10.2014 itself by Customs officers at Inland C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....etermined 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 confiscated absolutely under section 111(d) of the Customs Act, 1962. iv) The seized 2346 pairs of shoes seized at ICD, Tughlakabad and having re-determined value of Rs. 5,81,738/- are confiscated under Section 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ciples 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 to issue the same under section 28(4) of Customs Act for recovery of duty as this would amount review the earlier decision of assessment. It is submitted that findings are liable to be set aside on this score as well. 11. On merits, it is submitted by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....under 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 act ethically in terms of law. Hence, there is no infirmity in the order under challenge when penalty on the CB has been imposed. The order is accordingly, prayed to be upheld and both the appeals are prayed to be dismissed. 15. Learned Departmental Representative....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 goods before filing the Bill of Entry. On the other hand, the importer is expected to know what he has imported. Saying that my overseas supplier sent me wrong goods cannot be an excuse. If such an argument is accepted, anything including prohibited goods such as drugs, explosives can be imported into India by anyone as long as they don't show the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f 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 following, namely:- (a) the accuracy and completeness of the information given therein; (b) the authenticity and validity of any document supporting it; and (c) compliance with the restriction or prohibition, if any, relating to the goods under this Act or under any other law for the time being in force. (5) If the proper officer is satisfied that the interests of reven....
X X X X Extracts X X X X
X X X X Extracts X X X X
....p; 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 the goods and thereby escape his liability to pay Customs duties. Merely saying that I have a purchase order which says X but my supplier sent me Y cannot be an excuse as the only person in India who has knowledge about the imported consignment is the importer. If he has doubts, there are sufficient safeguards in the Act itself. 22. This answers to questions (b) and (h) above are therefore, that the importer's assertion that the overseas supplier has sent different go....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 filed nor any assessment of duty under section 17 because assessment under section is for duty on imported goods and if they are no longer imported goods, no duty can be assessed. 25. The proper officer who assessed the duty on the imported goods becomes functus officio and he cannot change his assessment order which is a quasi-judicial order and if aggrieved by it, either the importer or the Revenue can be assail it before the Commissioner (Appeals). However, in taxation, it sometimes happens that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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. The question that arises is whether the Directorate of Revenue Intelligence had authority in law to issue a show cause notice under Section 28(4) of the Act for recovery of duties allegedly not levied or paid when the goods have been cleared for import by a Deputy Commissioner of Customs who decided that the goods are exempted. It is necessary that the answer must flow from the power conferred by the statute i.e. under Section 28(4) of the Act. This Section empowers the recovery of duty not paid, part paid or erroneously re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 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 the officer of the rank of the officer who initially took the decision to assess the goods. 13. Where the statute confers the same power to perform an act on different officers, as in this case, the two officers, especially when they belong to different departments, cannot exercise their powers in the same case. Where one officer has exercised his powers of assessment, the power to order re-assessment must also be exercised by the same officer or his successor and not by another officer of another department though he is designated to be an officer of the same ran....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or 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 can be raised under section 28. This, however, leads to the related question as to whether DRI can issue a SCN under Section 28. 34. The decision of Hon'ble Apex Court in the case of Canon India Ltd. vs. Commissioner of Customs in Civil Appeal No. 1827/2018 as decided on 09.03.2021 has been brought to our notice. Perusal of the order shows that the question that has been considered by the Hon'ble Apex Court is whether the Directorate of Revenue Intelligence had authority in law to issue a show cause notice under Section 28(4) of the Act for recovery of duties allegedly not levied or paid when the goods have been ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 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 goods and who was competent and authorised to make the assessment. The nature of the power conferred by Section 28 (4) to recover duties which have escaped assessment is in the nature of an administrative review of an act. The section must therefore be construed as conferring the power of such review on the same officer or his successor or any other officer who has been assigned the function of assessment. In other words, an officer who did the assessment, could only undertake re- assessment [which is involved in Section 28 (4)]." 36. It was held that Additional Director General of Revenue Intelligence was not the 'proper officer' to examine the power conferre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f 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 date, the Section 28(11) is still on the statute book and is valid. This sub-section was not brought to the attention of the Hon'ble Supreme Court in the case of M/s. Canon India (supra). However, even if it is considered that the officers of DRI are 'proper officers' under Section 17, an SCN under Section 28 can be issued only by the proper officer and not a proper officer, i.e., the officer who has done the assessment under section 17 or his successor in office. 39. Accordingly, even if section 28(11) is considered, the SCN demanding duty under section 28 issued by the officer of DRI is invalid as per the decision of Hon'ble Apex Court in the case of M/s. Canon India Pvt Ltd. (supra) be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cumstances. - (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 the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the court and the court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this Act, other than a proceeding before a court, as they apply in relation to a proceeding before a court. 42. As far as the penalty under section 112(a) on the CB is concerned, the allegation is that he has....