TaxTMI 
TaxTMI 
1986 (12) TMI 44
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.... The said vessel arrived at Calcutta Port on 27th March, 1986 and the petitioner filed the Bill of Entry through the clearing agent M/s. Barua and Choudhuri. The said goods were declared in the Bill of Entry as secondary G.P. Coils of Japanese origin. 3. On 1st April, 1985 the Shed Appraiser passed an order for examination of the subject consignment. It was countersigned by the Assistant Collector of Customs, Appraising Group III on the original Bill of Entry. 4. On 11th April, 1985, the goods were examined by the Examining Officer, Shed Appraiser, Metal Export and Assistant Collector of Customs, K.P. Docks. 5. On 18th May, 1985. The Deputy Collector of Customs, Special Investigation Branch, held that the value of the goods declared i.e. 185 U.S. Dollar per Metric Tonne was low and accordingly the value was enhanced to 200 U.S. Dollar per Metric Tonne for the purpose of assessment. He passed an order levying the duty at 200 U.S. Dollar per Metric Tonne. It was, however, provided that such enhanced value would not be debited against the import licence. Thereafter, on the aforesaid basis the bill of entry was classified and upon payment of the assessed cust....
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....pearing for the petitioner has canvassed before me that the extension of three months allegedly granted by the Collector of Customs under the proviso to Section 110(2) was bad as the order was made without hearing the petitioner and without giving him an opportunity of showing cause as to why such an order of extension should not be made. It was contended that in exercising power of extension under proviso to Section 110(2) of the Act, the Collector was acting quasi-judicially and he was therefore bound to hear the objections of the petitioner to such an order of extension, before granting extension. 15. This contention has to be considered in the light of the relevant provisions of the Act. 16. The goods were cleared and removed from the Customs on 5th June, 1985. Admittedly the goods were seized under Section 110(1) of the Act when the goods were in the custody and possession of the petitioner. Section 110(2) provides as follows :- "Where any goods are seized under sub-section (1) and no notice in respect thereof is given under Clause (a) of Section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possess....
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....ner's objection to such an order. The Supreme Court in the case of The Assistant Collector of Customs and Superintendent, Preventive Service Customs, Calcutta and others v. Charan Das Malhotra reported in [A.I.R. 1972 S.C. 689] held thus : "There can be no doubt that the proviso to the second subsection of Section 110 contemplates some sort of inquiry. The Collector, obviously, is expected not to pass extension orders mechanically or as a matter of routine but only on being satisfied that there exists facts which indicate that the investigation could not be completed for bona fide reasons within the time laid down in Section 110(2), and that therefore, extension of that period has become necessary. He cannot therefore, extend the time unless he is satisfied on facts placed before him that there is a sufficient cause necessitating extension. The burden of proof in such an inquiry is clearly on the Customs Officer applying for extension and not on the person from whom the goods are seized." 19. The Supreme Court then proceeded to hold as follows : "In our view, equating the power, the exercise of which depends on a mere reasonable belief, with the power, the exercise o....
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....ge has relied principally on the Supreme Court's decision in Assistant Collector of Customs v. Charan Das Malhotra [AIR 1972 S.C. 689]. In this judgment the Supreme Court considered the scope of Section 110(2) and of Section 124(a) of the Customs Act, 1962. The Supreme Court has said that the power under the proviso to sub-section (2) of Section 110 is quasi-judicial or at any one requiring a judicial approach. Consequently, says the Supreme Court an opportunity of being heard ought to have been given to the respondent before orders for extension were made." 21. This Court at page 364 also held as follows : "The next attack was on the show cause notice. It is stated on behalf of the appellants that if the original seizure was bad and the extension order was also bad, the show cause notice would be bad. We have held that the extension order should be set aside but we do not think that the seizure was bad. Mr. Justice Sabyasachi Mukharji has held that in spite of the order of extension being set aside it would be open to the Customs authorities to issue a show cause notice. The learned Judge has relied on a judgment of this Court in Appeal No. 122 of 1969 as well as on th....
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....uance of the notice under Section 124 of the Act, there cannot be any retrospective extension after the period has already expired. My attention has not been drawn to any provision in the Act which permits extension of the period by consent of the party to be affected by such extension. The question arises as to whether the extension of the period of issuance of the show cause notice under the proviso to Section 110(2), can be made by consent. I shall deal with this aspect of the matter later. 25. It is not the case of the respondents that the said letter was sent by the petitioner on 20th March, 1986 expressing his consent for extension of time for issue of the show cause notice. It is not necessary to go into the question whether the consent was obtained by coercion or otherwise. But the fact remains that the said letter although dated 20th March, 1986 was written on 4th April, 1986 and accordingly it cannot be construed as consent to the extension of the time by a period of another 3 months, such consent having not been given prior to the expiry of the time prescribed. Their consent be retrospective consent. 26. It is necessary to refer to the order of the Coll....
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....ith or disposing of the goods seized. There was no extension as envisaged by the proviso to Section 110(2). If the case of the respondents is correct that the petitioner consented to the extension in that event in the said note itself the Officers concerned would have mentioned that the importer does not object to the extension being made, although that might or might not have been a relevant factor for extending the period. From the records which have been produced it appears that on 19th March, 1986 a note was put up before the Assistant Collector, SIB suggesting an extension of 4 months. The Assistant Collector in turn put up a note before the DC, SIB recommending the extension without mentioning any specific ground. The DC, SIB submitted a note before the Collector which has already been set out hereinbefore. The records do not show investigations have been made between the date of the seizure and the date when extension was sought for by the Officers. 29. The aforesaid facts would amply demonstrate that there was no consent at all before the expiry of the period prescribed by the Act and accordingly such consent cannot confer any jurisdiction on the authorities to ext....
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....dly, there was no consent by the petitioner to the extension being made for the issuance of the show cause notice under Section 124 of the Act. Even if there was any consent such consent cannot confer any jurisdiction to extend, as such consent was given after the expiry of the period prescribed for such extension. There was no order of extension at all passed by the Collector extending the period of show cause notice. Even if it is accepted that the Collector by putting his initial on the proposal of the Deputy Collector for extension of the period for further three months, approved the proposal and impliedly passed an order of extension, even then such order of extension is bad as it was made ex-parte. 33. For the reasons aforesaid, the purported order of extension allegedly made on 20th March 1986 is bad and the respondents have an obligation to release the goods from the seizure and detention. 34. It is then contended that on 5th June 1985 the clearing agent had acknowledged the receipt of the said show cause notice issued under Section 124 of the Act and the service on the clearing agent tantamounts to the service on the owner or the importer. I have held tha....
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....bsp;In this case the goods have been cleared on 5th June, 1985 and the seizure took place on 24th September, 1985 while the goods were lying in the petitioner's godown. On the date of seizure, the Clearing Agent was not and could not have been the agent of the importer in respect of the said consignment already cleared. Thus the service on the Clearing Agent cannot be treated as service on the petitioner after the goods have been released. 37. The other contention is that the goods have been finally assessed and released and such order has not been set aside or reviewed in accordance with the provisions of the Act. So long as it remains unaffected by any order of revision or appeal the authorities concerned cannot reopen the assessment. Reliance has been placed in the case of Mangla Brothers v. Collector of Customs reported in AIR 1985 Cal. 122 where I have held that when an assessment had been made by the authorised officer this order cannot be set aside or reviewed except in accordance with the provisions of the Act. In this case the Deputy Collector directed the assessment to be made on a particular basis and to release the goods thereafter. This was done. Under Section....
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....inner portion of coils could be visually examined. Coils being heavy (above 5 ton) and there being no decoiling arrangement in the docks the same could not be decoiled, only some inner folds could be taken out and examined. The goods are G.P. coils. The outermost and innermost surfaces are found to have some white spots and dents. Small portion of edges are damaged. Coil No. 76 could be seen having its outermost folds torn. No visible defects except small scratches were found on the portion of the goods examined. Amount of white spots, dents, damages, holes as mentioned above do not appear to be manufacturing defects. No categorical opinion regarding quality of goods can be offered at this stage. However, party may be asked to make arrangement for decoiling at least 25 per cent of the individual coils and also to submit manufacturers' Mill Test Certificate regarding quality of the goods". 41. The Deputy Collector on 18th May 1985, inter-alia, passed the following order : "The 3rd B/E relates to Vishva Yash, Rot No. 143/85, dated 21-3-1985. The goods are defective galvanised sheet. Here again the declared value is U.S. $283 C&F Calcutta per M.T. Here the value may be acc....
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.... u/s 49 of C&F. Out of the 3 consignments, the consignment relating to S.S. Vishva Yash Rot No. 143/85, L. No. 86 had been stored u/s. 49 on payment of Duty on Du/B/E. 'In respect of all the three (3) consignments per S/B Vishva Yash Rot No. 143/85 and S/S Vishva Madhuri, DC(N) has passed order to accept the invoice value and to accept the declaration regarding the defective nature of the goods. (Enphasis supplied) "Therefore all the consignments have been allowed to be released. Accordingly the Bills of Entry have been suitably endorsed regarding release of the goods as per DC(N)'s Order." "DCN's order is very specific Section 49 Register is to be properly endorsed." "Kind attention is invited to DC(N)'s order at N.S. IV 21/5 relating to 4 consignment for which Sri Chandrakanta Seth appeared before him out of the 4 consignments, the three bills of entry are noted below : The particulars of 3 bills of entry are as follows : (1) ..... (2) ..... (3) S.S. Vishva Yash Rot No. 143/85 Imp. M/s. D. Sengupta C/A. M/s. Baroa & Chowdhury Goods: 236.010 M/T Secondary. G.P. Sheets in coils Invoice No. S 912, dated 7-3-1985 issued by M/s. Macpherson Exp....
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.... is not required when Mills Test certificates are produced. (Emphasis supplied) In view of the above order of DC(N), the goods may be allowed to be released from S. 49 storage as these are covered by Mills Test Certificates indicating Secondary quality. Submitted for orders Sd./- Illegible. 23-3-1985 A.G/Gr. III Let us wait DC(N)'s order in file S. 49-P-34/85A(III) of M/s. S.M. Casting, 24/5/ Appr. It appears from the orders passed by DC(N) in F.No. S.49-P-34/85A (III) that where this goods are good quality and the importer could not produce any documentary evidence to prove that the goods are second grade, the assessable value of goods declared as defective/Secondary should be Rs. 3000/- per Mt. Coming from non-preferential area and Rs. 3500/- per M/T for goods coming to an preferential area. Accordingly, it appears the except the case of S/S Jolagopal Rot No. 123/85 L. No. 17 which had been produced by Shri Chandrakant, the remaining three (3) cases noted at N.S. VII may be allowed release after loading the assessable value @ U.S. $ C&F but debiting the invoice value in the licence. In anticipation of approval, the three (3) bills of entry of note....