TaxTMI 
TaxTMI 
2022 (3) TMI 120
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....cise and Customs [CBEC] issued order dated 20.12.2013 from file No. 437/94/2013-Cus IV appointing Commissioner of Customs, Seaport- Import, Kolkata as the common adjudicating authority in the case. Therefore, the learned Commissioner has decided the case with respect to all the imports made through the three ports. 2. The appellant imported LDPE re-processed granules through Chennai and Kolkata ports and ICD Tughlakabad which were assessed by the proper officers and cleared for home consumption. DRI received information that the appellant had been resorting to undervaluation of the LDPE granules which resulted in short levy of duty and conducted searches, recorded statements and after completing investigation, came to the conclusion that the appellant had undervalued the imported goods. Additional Director General [ADG], DRI issued the SCN proposing recovery of differential duty under section 28 along with interest, confiscation of the impugned goods and imposition of penalties. Adjudicating upon the SCN, the learned Commissioner has, by the impugned order, confirmed a demand of differential duty of Rs. 96,42,062 and imposed a penalty of equal amount under section 112. 3. The....
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....the power of assessment under section 17 and shall be deemed to have been and always had been the proper officers for the purposes of this section. 6. He submits that while as per Section 2(34), an officer has to be notified to be a proper officer, section 28(11), itself defines that all persons appointed as officers of Customs under sub-section (1) of Section 4 before 6th July 2011, as proper officers and are deemed to have always had the power of assessment under section 17 and shall be deemed to have been and always had been the proper officers under section 28. Thus, no notification is required in respect of the officers covered under section 28(11). Officers of DRI were appointed as Customs officers under sub-section (1) of Section 4 by Notification No.17/2002 - Customs (NT) dated 7.3.2002 as has been noted in Canon India. The relevant extract of the judgment is as follows: 16. At this stage, we must also examine whether the Additional Director General of the DRI who issued the recovery notice under Section 28(4) was even a proper officer. The Additional Director General can be considered to be a proper officer only if it is shown that he was a Customs officer unde....
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....pression "proper officer" in relation to the functions under the said Act to mean the officer of customs who is assigned those functions by the Central Board of Excise and Customs or the Commissioner of Customs. Recently, a question has arisen as to whether the Commissioner of Customs (Preventive) is competent to exercise and discharge the powers of a proper officer for issue of a notice for the demand of duty. The Hon'ble Supreme Court of India in Commissioner of Customs versus Sayed Ali and Anr. (Civil Appeal Nos. 4294-4295 of 2002) held that only a customs officer who has been specifically assigned the duties of assessment and reassessment in the jurisdiction area is competent to issue a notice for the demand of duty as a proper officer. As such the Commissioner of Customs (Preventive) who has not been assigned the function of a "proper officer" for the purposes of assessment or re-assessment of duty and issue of show cause Notice to demand Customs duty under Section 17 read with Section 28 of the Act in respect of goods entered for home consumption is not competent to function as a proper officer which has not been the legislative intent. 2. In view of the above the Sh....
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.... 2(34) in respect of such officers assigning functions under section 17 or section 28 is redundant because the section itself designates them as proper officers. 10. He, therefore, submits that DRI officers, being proper officers both under section 17 and under section 28, the SCN issued in this case is valid and cannot be struck down. 11. We have considered the submissions made and case laws relied upon by both sides. Learned counsel for the appellant was correct in his assertion that DRI officers were held to be NOT proper officers under in Canon India and hence the order issued in pursuance of an SCN issued by DRI demanding duty was set aside. The ratio of Canon India was followed in the following cases and the orders confirming demands in pursuance of SCN issued by DRI were set aside. Supreme Court 1. Commissioner of Customs vs Agarwal Metals and Alloys [2021(9) TMI316- Supreme Court] Madras High Court- Madurai bench 2. Quantum Coal Energy Pvt. Ltd vs Commissioner of Customs [2021 (3) TMI 1034- Madras High Court] Karnataka High Court 3. Givaudan India Pvt. Ltd. vs Commissioner of Customs [2021(8) TMI 178- Karnataka Hig....
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....elf but they were appointed through a notification under section 4. The Customs Act also does not mention DRI or Revenue Intelligence anywhere nor does it confer any powers on such officers. Thus, officers of DRI and Customs officers were treated as distinct and separate by the legislature under the Customs Act. 15. A perusal of some other enactments also shows that DRI and Customs officers were treated as separate by legislature. As per the Narcotic Drugs and Psychotropic Substances Act, 1985 [NDPS Act] the government can empower officers of various departments to conduct search, seizures and make arrests. It clearly mentions Customs officers and officers of Revenue Intelligence separately. Section 42 of this Act reads as follows: 42. Power of entry, search, seizure and arrest without warrant or authorisation.-(l) Any such officer (being an officer superior in rank to a peon, sepoy or constable) of the departments of central excise, narcotics, customs, revenue intelligence or any other department of the Central Government including para-military forces or armed forces as is empowered in this behalf by general or special order by the Central Government, .......... may b....
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....olice. 18. It is evident from the RTI Act that DRI was treated by the legislature as an intelligence and security organization created by the Government and hence was granted immunity under section 24. Such immunity was not given to the Customs officers. Like Customs Act and NDPS Act, RTI Act also treats officers of DRI as separate and distinct from the Customs officers. The nature of DRI also becomes clearer from its functions which, according to the website of DRI are as follows [https://dri.nic.in/main/charter accessed on 15 February 2022]: • Collection of intelligence about smuggling of contrab and goods, narcotics, under-invoicing etc. through sources of India and abroad, including secret sources. • Analysis and dissemination of such intelligence to the field formations for action and working on such intelligence, where necessary. • Keeping watch over important seizures and investigation cases. Associating or taking over the investigations which warrant specialized handling by the Directorate. • Guiding important investigation/prosecution cases. Keeping liaison with foreign countries, Indian Missions and Enforcement agenci....
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....al 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. 21. After we had concluded hearing in this case, learned counsel for the appellant submitted another case law which removes any doubt about the law laid down in Canon India. It was held by the Hon'ble Supreme Court in Commissioner of Customs Ahmedabad vs M/s. Suncity Strips and Tubes Pvt Ltd. [ Dy. No. 7802/2020] that in the absence of entrustment of functions under section 6 by the Government, officers of DRI will not have jurisdiction to exer....
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....vs. Jayaswals Neco Ltd.3 [3 (2001) 3 SCC 609] has held:- "9. ...'The' is the word used before nouns, with a specifying or particularising effect as opposed to the indefinite or generalizing force of 'a' or 'an'. It determines what particular thing is meant; that is, what particular thing we are to assume to be meant. 'The' is always mentioned to denote a particular thing or a person." 10. There are only two articles 'a (or an)' and 'the'. `A (or an)' is known as the Indefinite Article because it does not specifically refer to a particular person or thing. On the other hand, 'the' is called the Definite Article because it points out and refers to a particular person or thing. There is no doubt that, if Parliament intended that any proper officer could have exercised power under Section 28 (4), it could have used the word 'any'. 11. Parliament has employed the article "the" not accidently but with the intention to designate the proper officer who had assessed the goods at the time of 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....
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....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)] [ emphasis supplied] 23. Thus, the law laid down in Canon India is that: a) DRI is an organisation created by a notification by the Government of India 4 December 1957. Both officers of DRI and Customs officers are appointed by the Government of India. b) The officers of DRI have been appointed as Customs officers under Section 4(1). c) The notification dated 7th May 2012 issued by the Board under section 2(34) is not valid. d) Officers of DRI can only exercise the functions of Customs officers under various provisions of the Customs Act only if they are entrusted with such functions by the Government under section 6. In the absence of such ent....
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....sferred to the officer who had taken the original decision in the matter. Retrospective application is proposed by clause 96. These clauses in the Finance Bill 2022 are as follows: 85. In the Customs Act, 1962 (hereinafter referred to as the Customs Act), in section 2, in clause (34), after the words "Principal Commissioner of Customs or Commissioner of Customs", the words and figure "under section 5" shall be inserted. 86. For section 3 of the Customs Act, the following section shall be substituted, namely:-- "3. There shall be the following classes of officers of customs, namely:-- (a) Principal Chief Commissioner of Customs or Principal Chief Commissioner of Customs (Preventive) or Principal Director General of Revenue Intelligence; (b) Chief Commissioner of Customs or Chief Commissioner of Customs (Preventive) or Director General of Revenue Intelligence; (c) Principal Commissioner of Customs or Principal Commissioner of Customs (Preventive) or Principal Additional Director General of Revenue Intelligence or Principal Commissioner of Customs (Audit); (d) Commissioner of Customs or Commissioner of Customs (Preventive)....
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....te, require two or more officers of customs (whether or not of the same class) to have concurrent powers and functions to be performed under this Act.". 93. After section 110A of the Customs Act, the following section shall be inserted, namely:-- Action subsequent to inquiry, investigation or audit or any other specified purpose. "110AA. Where in pursuance of any proceeding, in accordance with Chapter XIIA or this Chapter, if an officer of customs has reasons to believe that-- (a) any duty has been short-levied, not levied, short paid or not paid in a case where assessment has already been made; (b) any duty has been erroneously refunded; (c) any drawback has been erroneously allowed; or (d) any interest has been short-levied, not levied, short-paid or not paid, or erroneously refunded, then such officer of customs shall, after causing inquiry, investigation, or as the case may be, audit, transfer the relevant documents, along with a report in writing- (a) to the proper officer having jurisdiction, as assigned under section 5 in respect of assessment of such duty, or to the officer who allowed such refund or dr....
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....eaffirmed by insertion of section 110AA in the Act. It would not be out of place to mention that the nature of powers under section 11A of the Central Excise Act and Section 73 of the Finance Act, 1994 are similar to the power under Section 28 of the Customs Act. However, this power has been conferred on 'the proper officer' under the Customs Act and on 'the Central Excise officer' in the other two Acts and this dissimilarity implies that the Central Excise officer need not be 'proper officer' but the similarity lies in the use of the definite article 'the' instead of 'a' or 'any' or 'any of the', etc. The meaning of the definite article 'the' when used in any law was explained by the Supreme Court in Consolidated Coffee Ltd. and others vs Coffee Board, Bangalore [(1980) 3 SCC 358] and it was held as follows: "14. Secondly, and more importantly, the use of the definite article 'the' before the word 'agreement' is, in our view, very significant. Parliament has not said 'an agreement' or 'any agreement' for or in relation to such export and in the context the expression 'the agreement' would refer to that agreement which is implicit in the sale occasioning the export." ....