TaxTMI 
TaxTMI 
2021 (11) TMI 622
X X X X Extracts X X X X
X X X X Extracts X X X X
....e exporter. The factual matrix which led to the issue of the impugned order is as follows. 2. M/s. R C Metal Industries Ltd., the exporter, filed Shipping Bill No. 849680 dated 18.11.2013 to export 'Nozzle filling compound'. DRI received information that the exporter has misdeclared the nature of the export goods and that the export consignment was, in fact, 'Chromium Concentrate' chargeable to export duty. DRI investigated the matter, recorded statements, collected prints of emails correspondence between the exporter and its overseas buyers and seized the export goods. The seized goods were subsequently provisionally released on bond and a bank guarantee and exported. DRI also found that same exporter had, in fact, exported similar consignments through 15 shipping bills through Kolkata port and three shipping bills through Inland Container Depot (ICD) Durgapur falling under the jurisdiction of Commissioner of Customs, Central Excise and Service Tax, Bolpur. After investigation, DRI issued the SCN dated 17th November, 2014 answerable to Commissioner of Customs (Port) Kolkata and to the Commissioner, Bolpur with respect to the consignments exported/ attempted to be exported throu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... No. 8496980 dated 18.11.2013 liable for confiscation under Section 113(d) and 113(i) of the Customs Act, 1962. (vii) I impose penalty of Rs. 10,00,000/- (Rupees Ten Lakh only) on Shri Mahendra Kumar Sutar, Proprietor of M/s R.C. Metal Industries under Section 114AA of the Customs Act, 1962 for the mis-declared consignment under Shipping Bill No. 8496980 dated 18.11.2013. (viii) I impose penalty of Rs. 10,00,000/- (Rupees Ten lakh only) on Shri Ashok Sawhny, Proprietor of M/s Monarch International under Section 114AA of the Customs Act, 1962 for the mis-declared consignment under Shipping Bill No. 8496980 dated 18.11.2013. (ix) The bank guarantee amounting to Rs. 25,00,000/- (Rupees Twenty Five Lakhs) submitted as security for the provisional release is ordered to be encashed towards realization of Redemption Fine and Penalty. (x) 5151.25 MT of export goods valued at Rs. 13,60,32,008/- (FOB) (Rupees Thirteen Crore Sixty Lakhs Thirty Two Thousand and Eight only) exported under 18 Shipping Bills as mentioned in Annexure - B and Annexure - C of the subject SCN are confiscable under Section 113(d) and 113(i) of the Customs Act, 1962. However, as they....
X X X X Extracts X X X X
X X X X Extracts X X X X
....toms reported in 2021 (3) SCALE 748. These appeals must fail as the show cause notice(s) in the present cases was also issued by Additional Director General (ADG), Directorate of Revenue Intelligence (DRI), who is not a proper officer within the meaning of Section 28 (4) read with Section 2(34) of the Customs Act, 1962. Hence, these appeals stand dismissed." In the present case also, the SCN was issued by DRI demanding duty under section 28(4) which is without authority and hence the impugned order adjudicating the SCN needs to be set aside. As far as the notice under section 124 proposing confiscation of goods and imposition of penalties is concerned, he submits that the confiscation under section 113 of the Act was only on the ground that there was mis-declaration in the Shipping Bill, i.e., modifying the assessment under section 28(4) and as this basis is not sustainable, the confiscation under section 113 which is based on such re-assessment of duty must fail too. Therefore, he prays that both appeals may be allowed and the impugned order may be set aside. As far as the current shipping bill is concerned, learned Counsel submits that the learned commissioner confirm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pping Bill. In the Shipping Bill, the exporter has to self-assess the duty under Section 17(1) and this assessment can be verified and the duty can be re-assessed by the proper officer under Section 17(4) and if such re-assessment is contrary to the self-assessment by the exporter, unless the exporter accepts in writing the re-assessment, the proper officer has to issue a speaking order. If 'the proper officer' is satisfied that the export of the goods is not prohibited and the duty as assessed has been paid, he will issue an order under section 51 permitting clearance of the goods. Section 2(34) defines that '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 Principal Commissioner of Customs or Commissioner of Customs. 9. The process of making an entry under section 50 and self assessment of duty under section 17(1) happen simultaneously because the data required for assessing duty such as the nature of the goods, their classification under the Customs Tariff, rate of duty, exemption notification, quantity and value are in the Shipping Bill and once these data is fed int....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t that during the relevant period, all assessments under section 17 had to be done by the 'proper officer'. Later, in 2011, section 17 has been amended and 'self assessment' by the importer/exporter was introduced. The importer or his customs broker files the Bill of Entry under section 46 and in the process also self assesses the duty payable under section 17. In many cases, the goods are cleared on the basis of self assessment and in some cases, the self assessment is examined by the proper officer and if necessary, it is re-assessed. The RMS of the Customs EDI system decides which cases should pass through the officer for examination and reassessment. In this changed legal system, if the Bill of Entry or Shipping Bill is only self-assessed and it is done wrongly (say, by not claiming an eligible exemption notification), can a refund be sanctioned under section 27 by the officer dealing with refunds? The Hon'ble High Court of Delhi held in Micromax India [Union of India & Ors. vs. Micromax Informatics Ltd. (2016) 335 ELT 446 (Del)] that where there is no assessment by the proper officer, there is nothing to be appealed against to the Commissioner (Appeals) and hence refund can be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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." 16. Thus, assessment is a quasi-judicial function and the assessed Bill of Entry/Shipping Bill is an appealable order. Once the assessment is completed, it cannot be modified to grant refund under section 27; it has to be appealed against first. However, a special power to review, reopen and reassess has been provided to the proper officer, i.e., the officer who has done the assessment in the first place or his successor in office under Section 28. This power, as can be seen from its text, is subject to three limitations: a) Who- only 'the proper officer' can issue an SCN; b) When- within the period of one year (or six months as applicable during the relev....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sofar as this case is concerned, with respect to the current shipping bill, it was assessed provisionally after provisional release of the goods. However, the finalization of the Shipping Bill by reclassifying the goods in the impugned order is not proposed in the SCN and the order has gone beyond the scope of the SCN and hence it needs to be set aside. Consequently, the confiscation of the goods and imposition of penalties based on such finalization of assessment must fail. 20. As far as the past consignments are concerned, the SCN was issued by ADG, DRI under section 28 and he is not the proper officer to issue such as notice as per Canon India and hence the impugned order confirming such a demand needs to be set aside and we do so. The confiscation of goods and imposition of penalties, require a notice under Section 124 to be issued which need not be issued by 'the proper officer'. Hence, it was within DRI's power to issue such an SCN. However, the basis for imposition of penalty is the confiscation of the goods under Section 113 on the ground that there were mis-declarations in the Shipping Bills which resulted from a determination under section 28 on the notice issued by DR....