TMI Blog1994 (6) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... , dated 2-8-1976. It is not in dispute between the parties that aforesaid goods were imported by the Assessee at Bangalore Air Port. It appears that Assistant Collector (IAD) Madras while auditing the working of Customs Office at Bangalore allegedly detected that the custom duty paid by the Assessee was short-levied as the Custom Tariff Heading 84.66 would not apply to the goods in question which were imported by the Assessee under the aforesaid two bills. The two notices in terms of Section 28(1) of the Customs Act were, therefore, issued by the Assistant Collector (IAD) Madras. In the notice dated 10-2-1984 it was alleged that the customs duty amounting to Rs. 3,06,468/- was short-levied or not levied while in the notice dated 28-5-1984 it was alleged that the customs duty of Rs. 6 lakhs was not levied or short-levied. Both these notices were based on the following reasons :- (1) Goods are not covered by any Project Contract; (2) No stamp found in the Bill of Entry for collection of duty amount. Before the importer could show cause to these notices, he was served with two more notices both dated 27-9-1984 issued by the Superintendent of Central Excise (ICD) Bangalore. They ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal by holding that the order originally appealed against was one legally not sustainable and, therefore, quashed the notices and allowed the appeal. In view of the allowing of the appeal on the question of legality of the notices, he did not go into the merits of the case. The department carried the matter before the Tribunal. The Tribunal by its order dated 21st November, 1986 remanded the case to the Collector (Appeals) after holding that the notices were valid and, therefore, the further questions, viz., (i) If the demand notices were valid, whether there is any definite finding that the imports made are not covered by the Heading 84.66 of the Customs Tariff Act; and (ii) whether passing of the interim order by the Assistant Collector confirming a sum of Rs. 4,50,000/- could be held to be legally sound, are to be decided by the Assistant Collector of Customs, Bangalore. It is, thereafter, that a reference application was moved by the Assessee under Section 130 of the Customs Act requesting the Tribunal to refer the two questions of law for opinion of this court. That application was earlier rejected by the Tribunal but the Assessee's application under Section 130(3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adras office and, therefore, that officer would be certainly a proper officer for issuing such notices and in the notice itself it was clearly mentioned that the assessee had to show cause to the Assistant Controller of Customs, I.C.D., Bangalore as to why the amounts specified in the notice should not be paid by him. Therefore, there was nothing wrong in the notice issued under Section 28 calling upon the Assessee to show cause to the proper officer namely the adjudicating officer. Once it is so held, he submitted, the order of remand as passed by the Tribunal cannot be found fault with from any angle. On the second issue regarding the period of limitation under Section 28(1) of the Act, learned Standing Counsel for the Revenue contended that the proviso to sub-section (1) of Section 28 provides for extension of the period of limitation to five years for the purpose of issuing notice under Section 28 in certain cases and such extension would depend upon the facts established during the course of the adjudication proceedings and sub-section (1) of Section 28 nowhere requires that in the notices so issued it must be expressly mentioned that any duty has not been levied or has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have effect as if for the words `one year' and `six months' the words `five years' were submitted." A mere look at the said provision goes to show that the `proper officer' being subjectively satisfied, on whatever material that may be with him at that stage, that a custom duty has not been levied or short-levied or erroneously refunded on an import made by any individual for his personal use or by 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, cause service of notice on the person chargeable requiring him to show cause why he should not pay the amount specified in the notice. Therefore, in the first place, the notices issued on 10-2-1984 and 28-5-1984 from the office of Assistant Controller of Customs, I.A.D., Madras has to be shown to have been issued by `proper officer'. Now it is true as the learned Standing Counsel for the revenue has contended that the proper officer would get the meaning assigned to it by Section 2(34) of the Act. Sub-section 34 of Section 2 defines `proper officer' as :- " `proper officer' in relation to any functions to be performed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned officer must be in a position to find out whether there was non-levy, short-levy or erroneous refund. While issuing such notice the proper officer must be in a position to compute the extent of short-levy, non-levy or erroneous refund and that amount has to be specified in the notice. Therefore, he must be an officer who must have jurisdiction to compute the amount because the moment the amount is mentioned in the notice in the ultimate adjudication proceedings the concerned Collector should determine the amount due from such person but it should not be in excess of the amount specified in the notice meaning thereby the amount so mentioned in the notice acts as a ceiling beyond which even the adjudicating officer cannot (sic) while fixing the liability. It, therefore, stands to reason that proper officer must be an officer who must be functioning within the jurisdictional Collectorate where the import in question has been effected. Otherwise an anomalous situation would follow. The submission of learned counsel for the department is that any officer upto the rank of Principal Appraiser stationed anywhere in India can issue notice under Section 28(1) of the Act to any imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 28(1) of the Act. This argument of learned Standing Counsel would have required closer scrutiny and perhaps could have withstood the test for the purposes of issuing a valid notice under Section 28(1) if we were apprised of the fact as to whether the Board of Revenue while issuing the parent notification of 1st February, 1963 had clearly earmarked the jurisdiction of audit wing working at Madras as `proper officers' for the purposes of issuing a valid notice under Section 28(1) so far as the imports at Bangalore are concerned. As that type of evidence is not brought before us, we are left guessing on this point. If the Madras audit wing while auditing the accounts of the Bangalore office had found anything calling for its interference under Section 28(1), the proper officer working in the jurisdictional collectorate at Bangalore should have been instructed to issue the notice under Section 28(1). But that has not been done in this case and the audit department at Madras had taken upon itself the job of issuing the notice. It is true that the man who issued the notice is the Assistant Collector of Customs. But, still, the moot question remains whether he could have issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petent the words, `in continuation of the notice' would only mean that the contents of those notices are relied upon for the purposes of notice under Section 28(1) issued admittedly by the proper officer. However, the point for consideration is whether the notices issued by the Assistant Collector of Customs, Bangalore were time-barred. Admittedly, the notices have been issued six months after the relevant date viz. the date of payment of customs duty at Bangalore. The Assessee had paid duty on 20-8-1983 and 3-12-1983 for the concerned two consignments. Ex-facie they are issued six months after the payment of duty by the Assessee. The moot question, however, remains whether the larger period of 5 years would be available to the revenue as provided for in the proviso to Section 28(1) of the Act. Learned counsel for the Assessee submitted that the larger period under the proviso would be available only if it is alleged in the notices or atleast whispered that there has been short-levy or no-levy or any erroneous refund by reason of collusion or any wilful mis-statement or suppression of facts by the importer while the goods were cleared for home consumption at Bangalore. It is no dou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for Assessee invited our attention. 12. The learned counsel drew our attention to the decision of the Bombay High Court reported in Tata Engineering Locomotive Company Ltd. v. Union of India, 1991 (52) E.L.T. 500. In paragraph 6 of the said judgment it has been in terms held :- "It is not the claim of the department and none of the show cause notices even whisper about short-levied duty by reason of fraud, collusion or any wilful mis-statement or suppression of facts by the company. It is, therefore, obvious that five show cause notices which are in respect of period covered from January 1, 1980 and ending with March 31, 1981 are barred by limitation. These five notices are issued between February 28, 1985 and March 31, 1985 i.e. long after the period of six months from the relevant date had expired. Consequently, the same are required to be struck down." He also invited our attention to the decision of Supreme Court in C.I.T. v. Kurban Hussain Ibrahim Ji Mithiborwala, I.T.R. Vol. 82, 1971 at page 821. The said decision dealt with the Income-tax Officer's jurisdiction to reopen an assessment under Section 34. In the aforesaid decision, Supreme Court held that unless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeding under in proviso to Section 28(1) of the Act. It is not as if the larger period could be invoked by the revenue even without any basis. In view of the settled position, therefore, we have to see whether the notice in the present case contained the germ or basis for such action or it is devoid of the same. Learned counsel for the Assessee was right in saying that in the absence of any such basis the notice would become invalid but on the contrary if there was some basis for such allegation then the notice could be said to have whispered about the same as held by the Bombay High Court. 13. If we turn to the notices issued on 27-9-1984 we find that mention is made therein that the items were cleared under 84.66 stating that the imported goods were to be utilised for setting-up of a plant while in fact it was found that they were utilised in assembling a plain paper copier and subsequently sold as such. Therefore, the representation made by the Assessee at the time of clearing the goods was found to be a wrong representation or a mis-statement which was obviously made to evade payment of 100% duty payable on such goods. In this connection it is necessary to refer to Entry ..... X X X X Extracts X X X X X X X X Extracts X X X X
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