TMI Blog1994 (12) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... by Harmonised Commodity Description and Coding System (Explanatory Notes). A show cause notice was issued to the appellants on 30-7-1992 under the instructions of the Assistant Collector, as is evident from the case records produced by the departmental representative. This show cause notice was also received by the Customs Agent on 30-7-1992 namely, M/s. Jeena Co., Madras, said to be on behalf of the appellant, as can be seen from the records produced for inspection during the hearing by the ld. SDR. The ld. Consultant denied the appellant or the Agent having received the notice within the 6 months from the date of issue. However, the Managing Partner of the appellant s company by his affidavit dated 4-11-1993 filed before the Assistant Collector has admitted having received the show cause notice on 10-8-1992 at Indore in his office. In the affidavit he has stated : Date of receipt of the said notice based on the memory and which is to be taken as correct. The appellant had not produced any supporting evidence with regard to the receipt of the show cause notice on 10-8-1992 except this affidavit and in which the Managing Director is basing the date on his memory. The posta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t event, the ld. Collector held that the demand notice had been served on the importer within the time limit envisaged under the Act. On merits the ld. Collector has confirmed the order of the Assistant Collector in terms of the reading of the Explanatory Notes. 3. The Learned Consultant argued on the grounds taken up before the lower appellate authority and placed before us several citations in support of his contentions. He submitted that the demand notice not having been signed by the proper officer is not sustainable. In this context, he has relied on the rulings rendered in the case of Gujarat State Fertiliser Co. Ltd. and Another v. Union of India and Others as reported in 1988 (34) E.L.T. 442 and that of Alcobex Metals Pvt Ltd. v. Collector of Central Excise as reported in 1992 (58) E.L.T. 108. As regards the service on CHA being not a service on the importer, he has relied on the rulings rendered in the case of Collector of Customs v. Trivandrum Rubber Works Ltd. as reported in 1992 (62) E.L.T. 360 (Tribunal) and that of Collector of Customs v. Hubs Thermometers India Ltd. as reported in 1989 (42) E.L.T. 55 (Tribunal). On his plea that the unauthorised officer, who has si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorised. He submitted that this is a case of short levy and hence, the issue of show cause notice for recovery of short levy is proper in law and it is not a case, wherein the Bill of Entry had been finalised and that the Section 28 is inapplicable, as contended by the consultant. He further submitted that the appellants had not questioned the order passed on merits and hence, the question of rendering any decision on classification does not arise. The ld. SDR relied on the following rulings in his support :- i. Almelo Laboratories Pvt. Ltd. v. Collector of Customs - 1989 (41) E.L.T. 319 ii. Chandrakant Seth v. Collector of Customs - 1993 (68) E.L.T. 289 5. We have carefully considered the submissions made by both the sides and have perused the records. The following questions have been raised by the ld. Consultant :- i. that the CHA had not been authorised to receive the show cause notice and the service on the said CHA is not a service on the appellants, ii. that the show cause notice has been received by the appellants after the expiry of the 6 months and hence, the demands are time-barred, iii. that the show cause notice had not been signed by the proper officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E.L.T. (J 683) to the effect that the primary liability to pay the duty is on the importer under Section 28 but that liability can be sustained on the clearing agent CHA as a result of special provisions contained in Section 147. It also noted further observations of the High Court that in the first instance, the department should put [in] efforts to recover the amount due from the importer and only on their failure to recover from them, the customs department can proceed for recovery from clearing agent under Section 147(3) proviso. The Tribunal has, further, held that from the beginning the notice for recovery, as well as [actual order] confirming the short levy of differential levy had not [sic] been above on the importers, but on the other hand the Customs House had confirmed the demand on the Customs House Agent and they had drawn his attention to the bar for recovery of sums due to Government in terms of Section 142 of the Customs Act, on the importer s failure to pay the same. The Tribunal has also noted the obligation of the Customs House Agent (CHA) as laid down in the regulation 14D of CHA Licensing Regulations, 1984 as being relevant. According to which, CHA shall advise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter before us, there is no record of such a finding by the Assistant Collector. The majority of the decisions cited by both the sides support the view that, in this case, the importer, to whom the notice was issued beyond the period of six months, cannot be made to pay the duty under Customs Law merely because a copy of the notice was sent to the clearing agent in time. As can be seen from the above paragraph the Tribunal proceeded on the footing that the service of notice had not been established before them and further held that CHA had not been authorised or empowered to receive the notice on behalf of the importer. Therefore, in that event of the matter, the Tribunal held that the notice issued to the CHA is not a proper service on the importer. 11. As can be noticed from the case of K.M. Mohamed Ghouse, the Hon ble Madras High Court was dealing with the short recovery from the clearing agent and the High Court has made an observation that the liability can be fastened on the clearing agent, as a result of the Special provision contained in Section 147 and has further held that unless the condition of Section 147 is specified, the clearing agent will not be liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bber Works is clearly distinguishable. 12. This matter can also be viewed from another angle. The Section 147 reads as follows :- 147. Liability of Principal and agent. - (1) Where this Act requires anything to be done by the owner, importer or exporter of any goods, it may be done on this behalf by his agent. (2) Any such thing done by an agent of the owner, importer or exporter of any goods shall, unless the contrary is proved, be deemed to have been done with the knowledge and consent of such owner, importer or exporter, so that in any proceedings under this Act, the owner, importer or exporter of the goods shall also be liable as if the thing had been done by himself. (3) When any person is expressly or impliedly authorized by the owner, importer or exporter of any goods to be his agent in respect of such goods for all or any of the purposes of this Act, such person shall, without prejudice to the liability of the owner, importer or exporter, be deemed to be the owner, importer or exporter of such goods for such purposes : Provided that where any duty is not levied or is short-levied or erroneously refunded on account of any reason other than any wilful act, negligen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot sent to them, and also to show that the agent had been retained only upto the clearance of the goods. Thus,. they have not discharged their burden as required under Section 147(2). Therefore, we have to presume that the notice must have been received by them well within the date of expiry. 13. As regards the third question raised by the ld. Consultant before us, we have perused the case records and notice that the Assistant Collector has authorised his immediate officer for issuing the show cause notice on 17-6-1992 with the following grounds :- Demand notice may be issued to the amount for the differential duty between 100% + 50% + 40% + 5% and 60% + 50% + 5% + 5%. The amount of duty short collected is Rs. 5,76,049.40 and D/N may be issued to that amount. A reply to IAD-CRA will be given later. Working sheet placed on RHS for reference. On 30-7-1992 the approved notice was put up for signature to the Assistant Collector. The same has been perused by the Assistant Collector and he has initialled the same. This show cause notice has been issued only after the draft was perused and signed by the Assistant Collector. Therefore, there is no infirmity in the issue of this sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed these pleas made by both the sides and we are not impressed with the arguments raised by the ld. Consultant on this ground. As submitted by the ld. SDR, this issue is settled by a number of judgments rendered by the Hon ble Supreme Court as noted above. It is also clear that the Section 28 of Customs Act is analogous and pari materia to Section 11 of Central Excises and Salt Act, 1944. Therefore, taking note of these rulings, we reject the contentions raised by the ld. Consultant. 18. In view of the findings given in all the issues in the negative there is no merit in this appeal and same is rejected. 19. [Assent per : S.K. Bhatnagar, Vice President]. - I find that a show cause notice was issued in this case with the approval of the A.C. as detailed by the Hon ble Member (J) in paragraph 13 and therefore I agree with him that the notice had been duly issued under orders of the proper officer and was therefore a valid notice. 20. It is also important to note in this connection that the matter was subsequently adjudicated by A.C. and the demand was confirmed accordingly. Since a demand becomes realisable only after such confirmation and the same has been done by a competent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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