TMI Blog1981 (5) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... ebruary 28, 1957, issued by the Central Board of Revenue. According to the first petitioner the practice it followed from 1969 onwards with regard to the machines and the components and parts thereof was that after the components were off loaded from the vessels, if the same were not immediately required for home consumption in the petitioner s factory, the same were warehoused in the petitioner s bonded warehouse at Pune. Thereafter, as and when the said components were required for being fitted into the machine being manufactured by the petitioner, with the permission of the Assistant Collector of Customs, the said components were transferred in Bond under Section 67 of the Customs Act, 1962 to be warehoused at petitioner s factory at Pune. As and when each consignment was permitted to be transferred in Bond, the Assistant Collector of Customs, Bond Department, sent instructions to the Excise Authorities stipulating the classification and duty liability in respect of the goods covered by each bond keeping in view the classifications I.T.C. No. 72(B) and 72(3). When the components were actually required to be ex-bonded, the petitioner filed ex-bond Bills of Entry for home consumpt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... replied to the said demand notice by the letter dated July 20, 1973. A personal hearing was given to the petitioner on August 22, 1973. At the hearing, it is said, the petitioner pointed out that any demand arising out of a subsequent change in the classification could not be enforced as the provisions of Section 28 were not attracted, particularly, where goods had already been cleared for home consumption. In other words, the submission was, that Tariff Ruling could not be applied retrospectively, once duty had been paid on the basis of a proper order of assessment. The petitioner s contention did not find favour with the third respondent, the Assistant Collector of Central Excise, Pune. A communication was received from the second respondent conveying an order dated 10/12th September, 1973 upholding the demand notice dated December 5, 1972. It is submitted that the said order does not deal with any of the contentions raised in the communication dated July 20, 1973 addressed by the petitioner or what was submitted at the time of the personal hearing. The said order dated 10/12th September, 1973 in fact states that the petitioners were aware of the revised classification inasmuch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22, 1972. The problem for the petitioners really commenced from the demand notice dated December 5, 1972 issued to them irrespective of whether it was based on advice or not. Therefore, we will proceed to examine the validity of this notice. 5. Exhibit `E is a copy of the impugned demand notice. It reads as Office of the Bond Officer (Inspector of Central Excise) = In charge International Computers Indian Manufactures Ltd. Poona-14 Notice of Demand for Duty under Section 28 of the Customs Act, 1962. * * * * Take notice that on behalf of the Central Government, I hereby demand payment by you of the sum of ₹ 3,74,144.18 (Rupees three lac, seventy four thousand, one hundred forty four and paise eighteen only) towards Customs duty within Ten days hereof. Particulars of Demand. - After the issue of the Public Notice No. 12 dated 22-2-1972 issued by the Collector of Customs Bombay, you have filed Green Bills of Entry for Home Consumption for clearance of As Is Machines, Components and Parts thereof under I.C.T. No. 72(B)/72(3) and have paid customs duties accordingly during the period from 23-2-1972 to 20-4-1972 under Bill of Ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of duty due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. (3) For the purposes of sub-Section (1), the expression relevant date means- (a) in a case where duty is not levied, the date on which the proper officer makes an order for the clearance of the goods; (b) in a case where duty is provisionally assessed under Section 18, the date of adjustment of duty after the final assessment thereof; (c) in a case where duty has been erroneously refunded, the date of refund; (d) in any other case, the date of payment of duty. 7. The three objections raised with regard to the impugned notice, demand are : (a) that no show cause notice has preceded the demand; (b) that it is barred by time and (c) being based on a Tariff Advice/Ruling it has to be construed prospectively as no Tariff Ruling can have retrospective operation. 8. Sub-Section (1) of Section 18 postulates that when any duty has not been levied or has been short-levied or erroneously refunded, a show cause notice must first be issued to the person chargeable with the duty requiring him to show cause why h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have prospective operation. Thirdly, Section 28 is not attracted in case of provisional assessments, which is the case of the respondents, but only in case of completed assessments in which duty has not been levied or has been short-levied or refund found due and payable. The petitioners are entitled to succeed on this short ground alone. 10. It is not anybody s case that the alleged short-levy in the present case is by reason of collusion or any wilful mis-statement or suppression of facts by the petitioners or their exporters or their respective agents or employees. Therefore, the limitation for issue of a show cause notice as contemplated by sub-Section (1) of Section 28 of the Act, has to be held to be within six months of the relevant date . Therefore, whether the impugned notice, assuming it is not a demand, is within time or not will depend upon whether the clearances made by the petitioners between February, 1972 and April, 1972 were after provisional assessment, as contended by the respondents or after final assessment. 11. Section 2(2) defines assessment as including provisional assessment, Section 2(4) defines Bill of Entry as the one referred to in Section 46 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-Section (1) of Section 18 reads as under :- Notwithstanding anything contained in this Act, but without prejudice to the provisions contained in Section 46 (a) where the proper officer is satisfied that an importer or exporter is unable to produce any document or furnish any information necessary for the assessment of duty on the imported goods or the export goods, as the case may be; or (b) where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test for the purpose of assessment of duty thereon; or (c) where the importer or the exporter has produced all the necessary documents and furnished full information for the assessment of duty but the proper officer deems it necessary to make further enquiry for assessing the duty. The proper officer may direct that the duty leviable on such goods may pending the production of such documents or furnishing of such information or completion of such test or enquiry, be assessed provisionally if the importer or the exporter, as the case may be, furnishes such security as the proper officer deems fit for the payment of the deficiency, if any, between the duty finally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion necessary for assessment of duty or any of the goods required any chemical or other tests to be carried out on them for the purpose of assessment of duty thereon or that the proper officer deemed it necessary to make further enquiry for assessing the duty despite the petitioners having produced all the necessary documents and furnishing full information for the assessment of duty, when they cleared the goods after filing the Bills of Entries etc. postulated by Section 47 of the Act. Indeed, we have not even been shown any default on the part of the petitioners at the time of warehousing or permitting transit to Pune from one bonded warehouse to another. Therefore, to say that assessments were made provisionally at the time of the clearance of the goods for home consumption is untenable. The only reason why, we think, provisional assessment has been mentioned in the communication dated April 28, 1972 is to make the demand within time within the meaning of Section 2(2) of the Act. Adding the last paragraph in the communication dated April 28, 1972 bringing in the concept of provisional assessment has, in consequence, to be held to be an after thought. We, therefore, hold that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is unacceptable. Tariff classification is fixed when the Bill of Entry is given and bond executed at the time of warehousing the goods. When an importer wishes to warehouse goods, he has to file a Bill of Entry in the prescribed form. Form No. 2 of Bill of Entries under the relevant Rule s makes it clear, that valuation and classification are both to be given. 17. Having come to the conclusion that the impugned notice/demand dated December 5, 1972 is illegal, invalid, ultra vires and time barred, it is hardly necessary to comment upon the validity of the other impugned orders. All the same we may notice certain salient features of those orders and comment upon them. The other impugned orders are Exhibit `G , dated September 10/12th, 1973 of the Assistant Collector, order dated November 12, 1975 of the Appellate Collector of Customs and the order dated May 18, 1979 of the Central Government. 18. The order of the Assistant Collector makes out two points. First that despite issue of the Public Notice dated February 22, 1972, the clearance was still sought by invoking Tariff Entries I.C.T. No. 72(B)/72(3) and the clearance was allowed provisionally. Secondly, that the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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