TaxTMI 
TaxTMI 
2022 (3) TMI 334
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....8(8) of the Customs Act, 1962 (in short, "the Act"), along with interest under Section 28AA of the Act. Penalty of Rs. 2,85,35,575/- has also been imposed under Section 114A of the Act upon TSL. (ii) Appeal Nos. C/76699/2019 & C/76701/2019 By the Order-in-Original dated April 16, 2019 the Commissioner of Customs (Airport & Administration), Kolkata, inter alia, confirmed differential customs duty of a sum of Rs. 1,97,41,951/- against TSL under the Proviso to Section 28(1) of the Act, along with interest under Section 28AA and imposed penalty of Rs. 1,97,41,951/- upon TSL under Section 114A of the Act. Penalty of Rs. 10 lakhs was imposed upon T.M. International Logistics Ltd. ("TMILL") under Section 112(a)(ii) of the Act. Besides the Commissioner also rejected the declared value of the goods imported by TSL under 4 Bills of Entry and redetermined the respective transaction values thereof under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007/ Customs Valuation (Determination of Value of Imported Goods) Rules, 1988 respectively. It has also been held that the goods imported were liable to confiscation under Sections 111(m) and 111(o) of the....
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....s not the proper officer under Section 2(34) and Section 28(4) of the Act and therefore the proceedings initiated by the show cause notices issued by DRI in each case demanding duty under Section 28 are invalid, without authority of law and liable to be set aside and therefore appeals filed are to be allowed on this jurisdictional ground alone. 2.1 It has been further submitted that the above decisions of the Hon'ble Supreme Court have been followed and applied in a large number of decisions by the Hon'ble High Courts and this Tribunal, e.g.: (i) Quantum Coal Energy Pvt. Ltd. Vs. Commissioner, 2021-(3) TMI 1034 - MADRAS HIGH COURT (ii) Mohan C. Suvarna Vs. Principal Commissioner of Customs, 2021 (8) TMI - 178 - KARNATAKA HIGH COURT (iii) Kitchen Essentials & Ors. Vs. Union of India & Ors., 2021 (10) TMI 1267 - BOMBAY HIGH COURT (iv) Commissioner of Customs (Export), Raigad Vs. Reliance Industries Ltd., 2021 (12) TMI 859 - BOMBAY HIGH COURT (v) Sterling Meta Plast India Pvt. Ltd. Vs. Commissioner of Customs (Airport & Administration), Kolkata, 2021 (11) TMI 560 - CESTAT KOLKATA (vi) Evershine Customs (C&F) Pvt. Ltd. & Another ....
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....ications have not been considered by Hon'ble Supreme Court in the case of Canon India Pvt Ltd. ● The provisions of Section 28(11) of Customs Act 1962 expressly state that all persons appointed as officers of Customs under the Customs Act 1962 "shall be deemed to have and always had the powers of assessment and always had been the proper officers‟. This was upheld by the Hon'ble Bombay High Court vide its Order dated 03.11.2014 in the case of Sunil Gupta vs. Union of India (2014-TIOL-1949-HCMUM- CUS). Further, by staying the order of Hon'ble Delhi High Court in Mangli Impex case, Hon'ble Supreme Court has also supported the said provision. Thus Section 28(11) is a valid piece of legislation. There is not even a whisper about this valid legal provision in Canon judgement and if Hon'ble Court / Tribunal does not agree to keep the matter pending, it may pass order taking into account Section 28(11). ● If an officer is specified in section 3 by designation or is appointed as officer of Customs under section 4, entrustment of functions of Customs officer on him under section 6 is a completely redundant exercise. By considering DRI as a separate departm....
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....t 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 reassessment 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 ....
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....ficers 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. ........................... 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 setaside and the ensuing demands are also set- aside." 6. 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 ....
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....corin (supra) observed as follows: "6. When the matter was taken up for hearing, the learned counsel appearing for the petitioner submitted that the issue is no longer res integra and that the Hon'ble Supreme Court in M/s. Canon India 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. .................. 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." (c) The Karnataka High Court in Shri Mohan C. Suvarna Director (Finance and Admin) vs. The Principal Commissioner of Customs, Additional Director General Directorate of Revenue Intelligence, Bangalore (supra) did not accept the plea of the Department that since the revi....
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....dgment has been filed or is pending before the Apex Court. 12. It has been further contended by Shri Toppo that the constitutional validity of Section 28(11) with retrospective effect has been upheld by the Hon'ble Bombay High Court in Sunil Gupta Vs. Union of India (supra). The Hon'ble Delhi High Court also has upheld the constitutional validity of this provision, but however with prospective effect in the case of Mangali Impex Ltd. Vs. Union of India and that the appeal of the Revenue against the judgment of the Hon'ble Delhi High Court has been admitted by the Hon'ble Supreme Court and the said judgment, to the extent it has held that Section 28(11) cannot be given retrospective effect, has been stayed. It has been further contended that in as much as the Hon'ble Supreme Court has not considered the aforesaid and also the Circular No. 44/11-Cus dated September 23, 2011 issued by the Central Board of Excise & Customs on the issue after the amendment of Section 28 in the manner abovestated, the said judgment of the Hon'ble Supreme Court is inapplicable. This issue has been considered by the Hon'ble Bombay High Court in the case of Commissioner of Customs (Export) Vs. Reliance I....
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....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 A49 (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, a 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) becaus....
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....are relevant in the context of the dispute before us. In northern India Woollen Mills Vs. COC, 1991 (53) ELT 81 (Tribunal), it was held that duty demand cannot be segregated from confiscation and penalty. In COC Vs. Poona Roller, 1997 (89) ELT 604 (Tribunal) while purporting to recognise the theoretical possibility of notice under Section 124 surviving even after failure of demand of duty, it was observed that both aspects are so interlinked that segregating the issues may be neither feasible nor desirable. In Manohar Bros. (Capacitors), 1996 (15) RLT 581, it was held that when demand of differential duty fails, the proceeding cannot survive. The decision of the Supreme Court in COCE Vs. H.M.M. Ltd., 1995 (76) ELT 497 (SC) that the question of penalty would arise only if the Department is able to sustain the demand of duty has to be taken into consideration. In the cases at hand, demand was raised under the proviso to Section 28(1) of the Act on the allegation of misdeclaration of value and the demand is found to be without jurisdiction. Proposals for confiscation and imposition of penalty are also based on the framework of alleged misdeclaration of value. The demand of duty on all....
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.... quite distinguishable from the case before the Supreme Court. 3. This Court, however, is not willing to accept such submission advanced on behalf of the Customs authorities for the simple reason that until and unless the judgment and order dated 26th March 2015, rendered by the Supreme Court in the two civil appeals referred above, stands recalled or modified or varied in Review, the said judgment and order dated 26th March 2015 has reached its finality and is binding in nature." 14.2 In the case of Dabur India Ltd. Vs. Union of India, 2016 (335) ELT 392 (Pat.), the Hon'ble Patna High Court also dealing with this issue observed and held as under: "7. Respondent No. 3, namely, Commissioner of Customs (Appeals), Patna has, however, taking into account the fact that the Union of India has filed a petition, seeking review of the decision of the Supreme Court, in M/s. SRF Ltd. Vs. Commissioner of Customs, Chennai passed in Civil Appeal No. 9440 of 2003, dismissed the appeals by the impugned order, dated 23.11.2015, on the ground that since the review petition is pending and the matter is sub judice, it would be premature to decide the appeals without a final decisi....