TaxTMI 
TaxTMI 
2024 (11) TMI 142
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...., private telecommunication network (PTN) products and modules, session border controller and modules, soft switch and modules, media gateway (modules) and voice-over Internet protocol (VoIP) equipment and modules as well as spare parts relating thereto. These goods were imported by self-classification under Customs Tariff Heading (CTH) 8517 and 8471. In respect of these imported goods, the petitioner filed bills of entry for home consumption and paid the appropriate customs duty based on the aforesaid classification under the Customs Act, 1962 (the Customs Act). The Customs Department did not challenge the classification of the petitioner in the relevant bills of entry upon verification and prior to clearance or by way of appeal thereafter. 3. While importing the above mentioned goods, the petitioner availed of Exemption Notifications, namely, Sl.No.427 of Notification No.50/2017-Cus-dated 30.06.2017, Sl.Nos 5, 8, 20 and 22 of Notification No.57/2017-Cus. dated 30.06.2017 and Sl.Nos.8, 10, and 13 of Notification No.24/2005-Customs, dated 01.03.2005. As a consequence, basic customs duty was paid at the rate of 0% or 10%, as applicable, at the time of clearance of the goods. 4....
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....ficer may re-assess the duty leviable on such goods. Therefore, he contended that the Customs Act contains sufficient safeguards to enable the proper officer to verify and reject the classification made on self-assessment basis. In this case, he submits that such verification was not carried out. 7. By referring to Section 47, learned senior counsel submitted that the said provision enables clearance of goods for home consumption upon the proper officer being satisfied that goods intended for home consumption are not prohibited goods. He also pointed out that permission for such clearance is required to be granted after being satisfied that the importer had paid the import duty assessed thereon. According to learned senior counsel, the proper officer could and should have resorted to the procedure prescribed under sections 17 and 47 if such officer entertained any doubts with regard to the self-classification by the petitioner. 8. In the alternative, learned senior counsel submitted that subsection (1) of Section 128 enables the customs authorities to file an appeal against the self-assessment of the petitioner. He pointed out that such appeal[s] were not filed by the customs....
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....11. His next contention was that the bills of entry did not contain any misstatement. By referring to the show cause notice, he pointed out that such show cause notice is based on inferences drawn from facts set out in the bills of entry, and is not based on misstatements made by the petitioner. According to him, it cannot be concluded that there was a misstatement by the petitioner on the basis of such inferences by the respondent. By referring to the judgment of the Hon'ble Supreme Court in Calcutta Discount Co. Ltd. v. Income Tax Officer, Companies District 1, Calcutta and another 1960 SCC Online SC 10, especially paragraphs 10 and 25 thereof, he submitted that inferences of fact and law may be drawn by the assessing officer, but such inferences cannot form the basis of a conclusion of misstatement. He also relied upon paragraph 10 of the judgment of the Hon'ble Supreme Court in Parashuram Pottery Works Co. Ltd. v. ITO (1977) 1 SCC 408, and that of the Customs, Excise and Gold Control Appellate Tribunal (CEGAT) in Asian Paints (India) Ltd. v. Collector of Central Excise, Bombay, 1994 (73) ELT 433 (Tribunal) (Asian Paints), to contend that the extended period of limitatio....
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....to a single product. He also pointed out that such decision was made after inquiry and not at the show cause notice stage. As regards the judgment in Collector of Central Excise, Baroda v. Cotspun, 1999 taxmann.com 667 (SC), he submitted that the classification list was expressly approved by the Central Excise Department in that case. 15. By way of rejoinder, Mr.Tarun Gulati, learned senior counsel, submitted that queries were raised in respect of the relevant imports and such queries were responded to by the petitioner before clearance. By way of substantiation, he referred to the documents at pages 14 to 16, 21, 23, 24 to 41 of volume III of the compilation of documents and case law. On this basis, he submitted that it is incorrect to state that verification under Section 17 was not possible. He denied the contention that the petitioner had changed the classification earlier after the exemption was withdrawn. 16. As regards the power under Section 28, by referring to the judgment in Priya Blue, he pointed out that the factual context in that case was the filing of a refund application in the teeth of an assessment order. As per the judgment in Canon India, he pointed out th....
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....n, whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained and thereupon, the importer, exporter or such other person shall produce such document or furnish such information.] (4) Where it is found on verification, examination or testing of the goods or otherwise that the self-assessment is not done correctly, the proper officer may, without prejudice to any other action which may be taken under this Act, reassess the duty leviable on such goods. (5) Where any assessment done under subsection (4) is contrary to the self-assessment done by the importer or exporter and in cases other than those where the importer or exporter, as the case may be, confirms his acceptance of the said re-assessment in writing, the proper officer shall pass a speaking order on the re-assessment, within fifteen days from the date of re-assessment of the bill of entry or the shipping bill, as the case may be." 19. As is evident from the above, sub-section (1) of Section 17 enables an importer to self-assess the duty, if any, leviable on the imported goods. It is common ground between the parties that the petitioner self-assessed the duty i....
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.... (b) the person chargeable with the duty or interest, may pay, before service of notice under clause(a) on the basis of,- (i) his own ascertainment of such duty, or (ii) the duty ascertained by the proper officer, the amount of duty along with the interest payable thereon under section 28AA or the amount of interest which has not been so paid or part-paid: [PROVIDED that the proper officer shall not serve such show cause notice, where the amount involved is less than rupees one hundred.) (2) The person who has paid the duty along with interest or amount of interest under clause (b) of sub-section (1) shall inform the proper officer of such payment in writing, who, on receipt of such information shall not serve any notice under clause (a) of that sub-section in respect of the duty or interest so paid or any penalty leviable under the provisions of this Act or the rules made thereunder in respect of such duty or interest: [PROVIDED that where notice under clause (a) of sub-section(1) has been served and the proper officer is of the opinion that the amount of duty along with interest payable thereon under section 28AA or the amount of interest, as the cas....
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.... invoked in the same circumstances as those listed above except that non-levy, nonpayment, short levy, short payment, erroneous refund, etc., should be by reason of collusion or any wilful misstatement or suppression of facts. The other difference between sub-sections (1) and (4) is that the period of limitation under sub-section (1) is two years from the relevant date, whereas it is five years from the relevant date as regards sub-section (4). 22. The relevant date is defined as under in Explanation 1 to Section 28: "Explanation 1: For the purposes of this section, "relevant date' means,- (a) in a case where duty is (not levied or not paid or short-levied or short-paid] or interest is not charged, the date on which the proper officer makes an order of the clearance of goods; (b) in a case where duty is provisionally assessed under section 18, the date of adjustment of duty after the final assessment thereof or reassessment, as the case may be; (c) in a case where duty or interest has been erroneously refunded, the date of refund; (d) in any other case, the date of payment of duty or interest." Under sub-section (5) of Section ....
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....t payable as customs duty, including interest liability, under this provision. It is significant to notice that there is nothing in the text of Section 28 which indicates that the exercise of power under Section 28 is subject to the assessment being reopened by appellate proceedings or otherwise. Indeed, conspicuous by its absence from the text of Section 28 is any reference to Section 17 or to assessment under the said provision. 25. Keeping in mind the above statutory context, it is relevant to consider the judgments relied upon by the petitioner. In ITC, the question that arose for consideration was whether the refund application could be entertained in the absence of a challenge to the order of assessment. In that context, the Hon'ble Supreme Court examined Sections 17, 27 and 28. Thereafter, the Court recorded the following conclusions in paragraphs 41 to 43 thereof: "41. It is apparent from provisions of refund that it is more or less in the nature of execution proceedings. It is not open to the authority which processes the refund to make a fresh assessment on merits and to correct assessment on the basis of mistake or otherwise. 42. It was contended....
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....tion 128 has not provided for an appeal against a speaking order but against "any order" which is of wide amplitude. The reasoning employed by the High Court is that since there is no lis, no speaking order is passed, as such an appeal would not lie, is not sustainable in law, is contrary to what has been held by this Court in Escorts (supra)." 26. The basis of the Hon'ble Supreme Court's judgment is evident from paragraph 41 wherein it is recorded that proceedings for refund are more or less in the nature of execution proceedings and that it is not open to the authority which processes the refund claim to make a fresh assessment on merits and correct the assessment on the basis of mistake or otherwise. As discussed earlier, by contrast, the power under Section 28 clearly takes within its fold the power to determine duty or interest. In that respect, the power under Section 28 cannot be equated with or compared to the power under Section 27. The judgment in Escorts also arose in the factual context of an application for refund. After noticing the period of limitation under Section 27 of the Customs Act, the Hon'ble Supreme Court affirmed the rejection of the refund a....
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....nclude that the power under Section 28 is a power to determine duty and interest. Such power is not subject to or conditional upon the assessment being reopened or set aside. Consequently, it cannot be concluded that the respondent does not have the jurisdiction to invoke Section 28 either on account of not having verified the self-assessment in terms of Section 17 of the Customs Act or not appealing against such self-assessment. 30. The next question that falls for consideration is whether the respondent had jurisdiction to invoke the enlarged period of limitation under sub-section (4) of Section 28. As is noticeable from the language of sub-section (4), such power may only be exercised if the non-levy, non-payment, short levy, short payment, erroneous refund, etc., was by reason of collusion or wilful misstatement or suppression of facts. The contention of the petitioner was that the relevant goods were cleared by classifying such goods under CTH 8517 over a period of about four years, i.e. between 15.11.2018 and 16.12.2022, and that the enlarged period of limitation cannot be invoked in those circumstances. From paragraph 6 of the petitioner's affidavit, it appears that m....