TaxTMI 
TaxTMI 
2021 (12) TMI 198
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.... Directorate of Revenue Intelligence from Nagpur, namely, the third and fourth respondents have intervened and have stalled the further assessment and clearance of the imported consignments covered by these three Bills of Entries. 4. It is the case of the petitioner that the petitioner is incurring Demurrage and Container Detention Charges for the containers to the liners as the imported consignments are not being allowed to be cleared as the assessment has not been completed by the jurisdictional "proper officers" under the jurisdiction of the second and the third respondent at the instance of the third and the fourth respondents. 5. It is therefore prayed for a further direction to be issued for the issuance of "Detention Certificate" for the waiver of demurrage and detention charges to be paid to the Consignment Freight Station of Balmer & Lawrie, where the imported goods are lying since their import on 22.9.2021 and 29.9.2021. 6. It is the case of the petitioner that the petitioner is a well known importer and dealer of spices and condiments such as Black Pepper, Cassia, Star Aniseeds etc. and Arecanuts (Betelnuts) and is in the said business for over a period of more ....
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....re goods are still lying after their initial import and are pending assessment and clearance. 15. It is further submitted that though the bills of entry were filed on 22.09.2021 and 29.09.2021, the respondents are refusing to release the consignment and are thus inflicting immense financial loss on the petitioner apart from making the import consignments to deteriorate as the imported goods are natural product and are prone to perish due to efflux of time. That apart, it is submitted that the petitioner is incurring detention charges for the container. 16. The Learned Senior Counsel for the petitioner further submits that the Central Board of Excise and Customs, Ministry of Finance (Department of Revenue) has also issued clarification in Circular No.22/2004 - Cus - dated 03.03.2004, wherein it has been clarified that in the case of classification disputes, option to clear the imported goods has to be given for provisional assessment, if the inquiries are going to take time. 17. The learned Senior Counsel for the petitioner further submits that a clearance of the consignments should not be held as the imports are prohibited or banned under law for the timing in force. It is....
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....mitted that the imported Arecanuts viz., unflavoured supari (Betelnut products) are perishable in nature and therefore no useful purpose will be served by allowing the respondents to detain the imported consignment at the container Freight Station of Balmer Lawrie CFS, Chennai from 22nd and 29th September 2021 after their import. 25. The learned Senior Counsel for the petitioner further submits that the imported consignments are attracting detention charges for the containers in which they were imported due to the delay. 26. The Learned Senior Counsel for the petitioner further has drawn attention to the decision of the Hon'ble Supreme Court in recently rendered in the case of Canon India Private Limited Vs. Commissioner of Customs 2021 (376) ELT 3 (SC) where the decision of the Commissioner of Customs Vs. Sayed Ali and another [2011 3 SCC 537 = 2011 (265) E.L.T. 17 (S.C.) has been followed. 27. The Learned Senior Counsel for the petitioner has also drawn attention to Para:18 to 31 of the aforesaid judgment. He submits that the appeals filed by the department in the case of Commissioner of Customs, Kandla Vs. M/s Agarwal Metals and Alloys in Civil Appeal No.3411 of 202....
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....rfere with the assessment of the imported goods. 33. It is further submitted that the third and fourth respondents have sent the samples to Ashwamedh Engineers & Consultants, a Testing laboratory in Maharashtra to ascertain whether the imported goods namely Arecanuts (Betelnuts) satisfied the requirements of Food Safety and Standards Authority of India (FASAI) to deliberately get an adverse remark to stall the clearance of the imported consignment though there are Testing Laboratories in Chennai and third and fourth respondents have their counter parts in Chennai. 34. Though the copies of these test reports have not been submitted to the petitioner, it is submitted that a report mentioned in the Counter Affidavit of the third and fourth respondents indicate that they were obtained by the third and fourth respondent to frustrate the import. 35. The learned Senior counsel for the petitioner also submits that in one of the report dated 11.11.2021 filed by the respondent indicates that an earlier test report given on 08.11.2021 was modified at the request of the third and fourth respondents to insert remarks[physical appearance and sample] receipt indicating that these reports....
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....irements of Chapter 21 of Customs Tariff Act, 1975 in particular heading 2106 and Sub-heading 2106 90 30 nor meets the standard prescribed under the Food Safety and standard Act, 2006. 42. It is submitted that the import value of the consignment in question has been declared to be Rs. 100.44 per kilogram and thus the petitioner is prohibited from importing the imported consignment within meaning of Section 2 [33] of the Customs Act 1962. 43. It is further submitted that the Customs Duty on Areca Nuts under Chapter Heading - 08 is 100%. This measure had been taken by the Government of India in order to safe guard the interests of Indian farmers who grow Areca Nuts. 44. It is submitted that the petitioner has imported consignments of Areca Nuts (Betel nut) under Chapter Heading 0802 of the Customs Tariff Act, 1975 Customs Tariff Act but has deliberately classified under CTH 2106 90 30 to circumvent the prohibition under the Commerce Ministry's notification referred to supra. 45. That apart it is submitted that the petitioner has also undervalued the value of the imported consignments falling under Sub Heading 080280 by adopting a wrong classification under CTH 2106 90 30 ....
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....leased forthwith by the Respondent Customs Department as undertaken by the Officials of Department present in Court. The Petitioner undertakes that before selling the goods in question in Indian market, they will again seek a fresh "No Objection Certificate" or clearance from the Food Safety and Standards Authority of India (FSSAI). The Affidavit of Petitioner to this effect may be filed in this Court, within a period of one week; ii. On the other hand, to the extent the Petitioner intends to re-export the goods, as according to the Petitioner, such goods had failed to clear the Food Safety and Standards even initially at the time of import itself, the learned Additional Solicitor General Mr.G.Rajagopalan, undertakes to permit the Petitioner to re-export those goods back to the Sri Lankan dealers, subject to the condition that the Petitioner gives a fresh Bond, so that in case any penalty is imposed on the Petitioner, in respect of those re-exported goods, then on the basis of that Bond, the Department may recover the same from the Petitioner. iii. The learned counsel for the Respondent, Additional Solicitor General, on further instructions from Mr.R.Vasudevan, I.....
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.... Revenue Intelligence who are officers of Central Government should be entrusted with functions of the Customs officers, it was imperative that the Central Government should have done so in exercise of its power under Section 6 of the Act. The reason why such a power is conferred on the Central Government is obvious and that is because the Central Government is the authority which appoints both the officers of the Directorate of Revenue Intelligence which is set up under the Notification dated 04.12.1957 issued by the Ministry of Finance and Customs officers who, till 11.5.2002, were appointed by the Central Government. The notification which purports to entrust functions 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 22.In the above context, it would be useful to refer to the decision of this Court in the case of Commissioner of Customs v.Sayed Ali wherein the prope....
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....ords 'five years' were substituted." 18. It is plain from the provision that the 'proper officer' being subjectively satisfied on the basis of the material that may be with him that customs duty has not been levied or short levied or erroneously refunded on an import made by any individual for his personal use or by the Government or by any educational, research or charitable institution or hospital, within one year and in all other cases within six months from the relevant date, may cause service of notice on the person chargeable, requiring him to show cause why he should not pay the amount specified in the notice. It is evident that the notice under the said provision has to be issued by the 'proper officer'. 19. Section 2(34) of the Act defines a 'proper officer', thus: 'Definitions.- 2. (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 Sect....
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....rd more than 29 minutes when it had sufficient free space (which depends on the capacity of the card providing extended memory) the maximum time for which it could record a single sequence was 29 minutes. 27. In other words, the camera could record more than one single sequence but not 30 minutes and more in a single sequence. It is obvious that the Deputy Commissioner took the view that the camera complied with the requirement of exemption i.e. it could only record up to less than 30 minutes in a single sequence. At this juncture, it is not relevant to see whether the Deputy Commissioner was right or not in taking this decision to clear the goods as exempted goods. What is important is to see whether the importers made any wilful mis-statement or suppression of facts and induced the delivery of goods. 28. It is pertinent to note that the importer had asked for a first check and had shown the cameras and the cameras were offered on 20.3.2012 along with Bill of Entry and literature detailing specifications of models. The camera could have been operated to see the length of time of the single sequence and whether recording of the single sequence exhausts the total m....
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....he first and the second respondents and/or the Appraiser of Customs who are competent authority albeit the "Proper Officer" to determine the correct classification. 60. This is evident from a reading of Sl.Nos.3 & 5 to the Notification No.40/2012-Cus, (N.T) dated 02.05.2012 , which read as under:- Sl.No. Designation of the Officers Functions under Section of the Customs Act, 1962 3 Deputy Commissioner or Assistant Commissioner of Customs and Central Excise i) Sub-section (5) of Section 17; ii) Section 18; iii) Section 21; iv) Section 22; v) Section 26A; vi) Section 28; vii) Section 28B; viii) Section 28BA; ix) Section 30; x) Sub-Section (2) of Section 31; xi) Section 32; xii) Proviso to Section 34; xiiii) Section 35; xiv) Section 42; xv) Sub-section (3) of Section 45; xvi) Second Proviso to subsection (1) of section and su....
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....ce and Directorate General of Central Excise Intelligence. i)Section 28B; and ii) Section 72 6 Intelligence Officer in the Directorate General of Revenue Intelligence and Directorate General of Central Excise Intelligence. i)Section 37 ; ii)Section 100; iii)Section 103; iv)Section 106; v)Section 106A; vi)Sub-sections (1) and (3) of Section 110; vii) Section 144; and viii) Section 145 62. Technically, even these powers cannot be exercised if one were to strictly apply the decision of the Hon'ble Supreme Court in Cannon India Private Limited vs. Commissioner of Customs 2021 (376) ELT 3 (SC) to the facts of the present case. The Hon'ble Supreme Court has held that, if it was intended that officers of the Directorate of Revenue Intelligence who are officers of Central Government should be entrusted with functions of the Customs officers, it was imperative that the Central Government should have done so in exercise of its power under Section 6 of the Act. The Court further observed that the ....
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....called upon, in the wake of independence, to shoulder the responsibility of guarding the tariff wall along the country's vast coastline and land frontiers. Many handicaps such as want of trained manpower and adequate resources in the form of equipments and absence of precise intelligence made our frontiers more vulnerable to economic exploitation. Added to it was the temptation to evade taxes and controls which was fuelled on account of growing demand for foreign articles which otherwise were subject to high taxation rates and non-tariff barriers on account of the need to foster indigenous industry and to conserve the country's fast dwindling foreign exchange reserves. A need was felt to have a centralized agency in India to deal with cases of violations of Customs laws, having ramifications beyond the geographical jurisdiction of localized field formations and for collection, coordination and correlation of intelligence with respect to violation of these laws and also to furnish specialized know-how. A beginning was made in 1953, when a nucleus cell, christened 'C.R.I.B.' (Central Revenue Intelligence Bureau), charged with the responsibility of dealing wit....
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....through Attari and the un-earthing of the smuggling racket at Jamnagar headed by Talab Haji Hussain and seizure of gold valued at at over Rs. 30 Lakhs, currency of 8 lakhs of rupees and about 25 vehicles including motor cars, auto rikshaws etc. and the current investigation into the seizure of Rs. 1.5 Crores worth of diamonds from Shri Zainal Ali Raza of Bombay.In particular, the mopping up of the smugglers on such a large scale at Jamnagar has virtually broken up a powerful and organized gang, whose activities introduced about six to eight crores of rupees worth of gold every year into the country and export of currency or other goods and services of equivalent value out of it." The Finance Secretary noted as below: - "The essential features of the proposed organization are: It is designed to collect and collate information and to strike swiftly; It is officer-intensive and the ministerial staff has been kept at a minimum; Although small, it is a high-powered organization so that it can issue instructions to Collectors and can command the confidence and respect of the other State and Central organizations with which it has necessarily t....
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....the prevention of surplus of any agricultural product or the product of fisheries; ( h) the maintenance of standards for the classification, grading or marketing of goods in international trade; (i)the establishment of any industry; (j)the prevention of serious injury to domestic production of goods of any description; (k)the protection of human, animal or plant life or health; (l)the protection of national treasures of artistic, historic or archaeological value; (m)the conservation of exhaustible natural resources; (n)the protection of patents, trade marks and copyrights; (o)the prevention of deceptive practices; (p)the carrying on of foreign trade in any goods by the State, or by a Corporation owned or controlled by the State to the exclusion, complete or partial, or citizens of India; (q)the fulfilment of obligations under the Charter of the United Nations for the maintenance of international peace and security; (r)the implementation of any treaty, agreements or convention with any country; (s)the compliance of imported goods with any laws which are applicable to similar g....
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....rts and ex-ports. Sub-section (2) states that the Central Government can, by an order in the Official Gazette, make a provision for prohibiting or restricting or otherwise regulating, in all or specified cases and subject to such exceptions, if any, the import or export of goods and after the amendment vide Act 25 of 2010, services or technology. Sub-section (2) to Section 3, therefore, authorises the Central Government to, by an order published in the Official Gazette, make provisions restricting the imports or exports. Imposition of quantitative restrictions on imports or exports would clearly fall within sub-section (2) to Section 3 of the FTDR Act. We are not concerned with the proviso to sub-section(2) in the present case. Sub-section (3) to Section 3 states that where an order is passed under sub-section (2) whereby the import or export of goods is prohibited, restricted or otherwise regulated, the goods in question would be deemed to be prohibited goods under Section 11 of the Customs Act, 1962 and accordingly the provisions of the latter Act would apply." 75. There is a prohibition of goods falling under Heading 0802 of Customs Tariff Act, 1975, if the value is below vid....
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....ade between 'prohibited goods' and 'other goods'. As has rightly been pointed out, the latter part of Section 125 obligates the release of confiscated goods (i.e., other than prohibited goods) against redemption fine but, the earlier part of this provision makes no such compulsion as regards the prohibited goods; and it is left to the discretion of the Adjudicating Authority that it may give an option for payment of fine in lieu of confiscation. It is innate in this provision that if the Adjudicating Authority does not choose to give such an option, the result would be of absolute confiscation. The Adjudicating Authority in the present matters had given such an option of payment of fine in lieu of confiscation with imposition of penalty whereas the Appellate Authority has found faults in such exercise of discretion and has ordered absolute confiscation with enhancement of the amount of penalty. This takes us to the principles to be applied for exercise of the discretion so available in the first part of Section 125(1) of the Customs Act. 159. The principles relating to the exercise of discretion by an authority are expounded in various decisions cited by the parties. We ma....
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....also initiate proceeding under Section 111(d) read with Section 124 of the Customs Act, 1962 to confiscate the consignment and impose penalty under Section 112 of the Custom Act, 1962. 85. It is for the first and the second respondents or the Appraiser of Customs or the Appraiser of Customs or Superintendent of Central Excise and Customs to assess the imported consignments and come to an independent conclusion, as to whether the imported goods i.e. Areca nuts merits to be classified under Chapter 0802 or under Sub Heading 2106 of the Customs Tariff Act, 1975 or is whether the import is prohibited. 86. As far as the third and the fourth respondents are concerned, they have no jurisdiction to impede in the imports. If any attempt is noticed on the part of the petitioner to wrongly import the goods into the country, contrary to the notifications of the of the Commerce Ministry prohibiting the import, it is for the third and the fourth respondents or their Counterparts in Chennai to pass on the intelligence to the "Proper Officer" who are the proper officer for the assessment of the Bills of Entry. 87. It is only the jurisdictional proper officer's namely, the first and second....