TaxTMI 
TaxTMI 
2021 (11) TMI 665
X X X X Extracts X X X X
X X X X Extracts X X X X
....and a penalty of Rs. 1 crore under section 114AA of the Customs Act. It also appropriates an amount of Rs. 6 crores paid by the appellant during investigation towards the duty liability under section 28 of the Customs Act. 2. Customs Appeal No. 51571 of 2019 has been filed by Neeraj Goel, Regional Marketing and Sales Manager of the Appellant, to assail the imposition of penalty of Rs. 50 lakhs under section 112(a)(b) of the Customs Act and penalty of Rs. 50 lakhs under section 114AA of the Customs Act. 3. It has been submitted by Shri B.L. Narasimhan, learned counsel appearing for the appellants that the Additional Director General, Directorate of Revenue Intelligence [DRI] did not have the jurisdiction to issue the show cause notice as he was not the proper officer under section 28 of the Customs Act to issue the notice and in support of this contention learned counsel placed reliance upon decisions of the Supreme Court in Canon India Pvt. Ltd. vs. Commissioner of Customs [2021 (376) E.L.T. 3 (S.C.)] and Commissioner of Customs, Kandla vs. M/s. Agarwal Metals and Alloys [2021 (9) TMI 316- Supreme Court]. 4. Shri Sunil Kumar, learned authorised representative appearing for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on 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 rank. In our view, this would result into an anarchical and unruly operation of a statute which is not contemplated by any canon of construction of statute. 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 dec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ons as proper officer under the Customs Act has been issued by the Central Board of Excise and Customs in exercise of non-existing power under Section 2 (34) of the Customs Act. The notification is obviously invalid having been issued by an authority which had no power to do so in purported exercise of powers under a section which does not confer any such power. xxxxxxxx 23. We, therefore, hold that the entire proceeding in the present case initiated by the Additional Director General of the DRI by issuing show cause notices in all the matters before us are invalid without any authority of law and liable to be set-aside and the ensuing demands are also set- aside." (emphasis supplied) 7. It would thus be seen that the Supreme Court in Canon India held that the entire proceedings initiated by the Additional Director General, DRI by issuance of a show cause notice was without any authority of law and was, therefore, liable to be set aside. 8. The aforesaid decision of the Supreme Court in Canon India was subsequently followed by the Supreme Court in Agarwal Metals and Alloys and the judgment is reproduced below: "Delay condoned. In view of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndia Private Limited V. Commissioner of Customs (2021-VIL-34-SC-CU) had held that the expression "the proper officer" occurring in Section 28 of the Customs Act will only refer to the assessing officer who passes the original order making assessment. xxxxxxxx 7. In the case also, the show cause notice was issued by the Additional Director General of DRI. The Hon'ble Supreme Court had held that he cannot be termed as "the proper officer". Since the entire proceedings were initiated by an authority who lacked the jurisdiction, applying the aforesaid decision of the Hon'ble Supreme Court the order impugned in these writ petitions is quashed." 12. The Karnataka High Court in Shri Mohan C. Suvarna Director (Finance and Admin) M/s Givaudan India Pvt. Ltd. vs. The Principal Commissioner of Customs, Additional Director General Directorate of Revenue Intelligence, Bangalore [2021 (8) TMI 178- Karnataka High Court] did not accept the plea of the Department that since the review petition had been filed by the Department in Canon India, the hearing should be adjourned and in view of the decision of the Supreme Court in Canon India, set aside the order for the reaso....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Tribunal in Bakeman's Home Products Pvt. Ltd. vs. Collector of Cus., Bombay [1997 (95) E.L.T. 278 (Tribunal)] and contended that the proposal for confiscation of goods and imposition of penalty cannot be segregated from the duty demand and, therefore, if the duty demand fails as the show cause notice was not issued by the proper officer, the proceedings for confiscation and penalty cannot survive. 19. This submission advanced by learned counsel for the appellant deserves acceptance. In Bakeman's Home Products, the Tribunal held that the proposal for confiscation and penalty cannot be segregated from duty demand and, therefore, the proceedings for confiscation and imposition of penalty cannot be sustained. The relevant portion of the decision is reproduced below: "13. Only four of the decisions cited before us are relevant in the context of the dispute before us. In Northern India Woollen Mills v. COC - 1991 (53) E.L.T. 81 (Tribunal), it was held that duty demand cannot be segregated from confiscation and penalty. In COC v. Poona Roller - 1997 (89) E.L.T. 604 (Tribunal) while purporting to recognize the theoretical possibility of notice under Section 124 survivin....