TMI Blog2021 (8) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... ms duties. Merely saying that I have a purchase order which says X but my supplier sent me Y cannot be an excuse as the only person in India who has knowledge about the imported consignment is the importer. If he has doubts, there are sufficient safeguards in the Act itself. Can the importer s argument that they had placed an order for some other goods and the overseas supplier had sent the wrong goods and therefore, they have no liability, be accepted? - Is the imposition of penalty under section 112 (a) upon the CB valid? - HELD THAT:- The importer s assertion that the overseas supplier has sent different goods cannot be accepted. On the other hand, as far as the CB is concerned, he filed the Bill of Entry as per the documents provided by the importer. There is nothing on record to show that any act or omission on his part has rendered the goods liable for confiscation under section 111. In fact, the only allegation in the SCN is that he failed to discharge his obligations under the CBLR 2013 and such a failure, even if correct, does not attract penalty under section 112. CBLR 2013 is a self contained set of regulations which provides for penalties for not fulfilling the obl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority to complete the procedure under section 138B with respect to each of the statements which has been relied upon in the SCN and decide afresh on the confiscations and penalties. Petition disposed off. - CUSTOMS APPEAL NO. 51320 of 2019 and 51586 of 2019 - FINAL ORDER NO. 51748-51749 /2021 - Dated:- 16-8-2021 - MR. P V SUBBA RAO, MEMBER (TECHNICAL) AND MRS RACHNA GUPTA, MEMBER (JUDICIAL) Shri Arjit Chakeravarty and Shekhar Vyas, Advocates for the Appellant Shri Rakesh Kumar and Shri Sunil Kumar, Authorised Representatives for the Department ORDER Present order disposes off two appeals detailed as follows: Sl. No. Appeal No. Appellant Show cause notice Order-in - Original Order-in-Appeal 1 C/51320/2019 Evershine Cusoms (C F) Pvt Ltd DRI/LRU- NOIDA/CI/26/IN T-O/ENQ- 10/2014 dated 07.04.2015 20/2016/JC/RR /EXP/ICD TKD Dated 31/03/2016 CC(A)/CUS/D- II/ICD/IMP/TKD/13-14/2019-20 Dated 12.04.2019 2. C/51586/2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized in the shop of the importer under section 111(l) and 111(m) of the Act. Another Show Cause Notice dated 07.04.2015 was also issued proposing: c) Differential Customs duty amounting to ₹ 1,73,174/- involved on seized 2346 pairs in 81 cartons (valued at ₹ 5,81,738/- ) under section 28(4) along with interest under section 28AA of the Act and Customs duty already deposited to be appropriated against the demand. d) Confiscation of 211 pairs of counterfeit shoes (valued at ₹ 1,04,902/-) under section 111 (d) of the said Act; e) Confiscation of 733 shoes (valued at ₹ 2,31,505-) under section 111(I) and 111(m) of the said Act.; f) Customs duty demand amounting to ₹ 65,253/- involved on seizure of 733 pairs was demanded under section 28(4) along with interest under section 28AA of the Act. g) Penalty under section 114A/112 of the Act. This Show Cause Notice also proposed imposition of a penalty under section 112(a) upon the Customs Broker for failing to discharge their obligations under the Customs Brokers Licensing Regulations (CBLR). 5. The Ld. Adjudicating Authority passed the Order-in-Original No. 20/2016 dated 31.03.2016, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s demanded from the Importer under Section 28(8) of the Customs Act, 1962 along with interest payable under Section 28AA of the Customs Act, 1962 and the Customs duty already deposited is ordered to be appropriated against the demand; vii) Penalty of ₹ 65,253/- is imposed on the Importer under Section 114 A of the Customs Act, 1962 with reference to seizure of 733 pairs of shoes seized at shop of the importer; viii) Penalty of ₹ 10,00,000/- is imposed on the Importer under Section 112 (a) of the Customs Act, 1962 with reference to seizure of 2346 pairs of shoes seized at ICD, Tughlakabad, New Delhi having re-determined value of ₹ 5,81,738/- ; ix) Penalty of ₹ 25,000/- is imposed on M/s. Evershine Customs (C F) Pvt. Ltd. under section 112(a) of the Customs Act, 1962 for the various acts of omission and commission. 6. Aggrieved, the appellants filed an appeal before the Commissioner (Appeals) who passed the Order-in-Appeal dated 12.4.2019 [ 5 ] dismissing the appeals and upholding the order of the adjudicating authority. 7. Being aggrieved, the importer as well as CB filed the instant appeals. 8. We have heard Shri Arjit Chakeravarty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon that customs has adopted the highest price of ₹ 942/- per pair for all the shoes despite the fact that value of shoes was within the range of ₹ 426/- to ₹ 942/-. The allegation of under-valuation is also prayed to be set aside. It is submitted that penalty has also been imposed. 12. On behalf of CB, it was submitted that they cannot be held liable for mis-declaration, if any, committed by the importer as the CB was responsible only for the clearance of consignment. The CB was not the beneficiary of the imports. The CB is not required to examine the nature of goods before filing the Bill of Entry. There is nothing brought on record by the Department to prove involvement of the appellant CB. The penalty as also been imposed upon the CB only on the ground of failing to discharge obligations under CBLR 2013 which is an incorrect allegation. Even if there is a violation of the obligations, no penalty can be imposed under section 112 for the purpose. There are provisions in the CBLR itself for imposing penalty for not discharging the obligations. The penalty is accordingly prayed to be set aside. 13. Rebutting these arguments, learned Departmental Repres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serious acts of misconduct held established, was held justified. 16. After hearing the parties and examining the records of the case, we find that the following issues are to be decided: a) Was there a mis-declaration of the goods in the Bill of Entry filed by the CB on behalf of the importer in terms of nature of goods, quantity and value, etc.? b) Can the importer s argument that they had placed an order for some other goods and the overseas supplier had sent the wrong goods and therefore, they have no liability, be accepted? c) Can a differential duty can be demanded under section 28(4) on the goods even before the goods have been cleared for home consumption? d) Can differential duty be demanded on under section 28(4) on goods which were seized from the shop of the importer, i.e., those goods which had been imported in the past? e) Is DRI competent to issue the SCN in this case in the light of the judgment of the Hon ble Apex Court in the case of Cannon India? f) Is the confiscation of the seized goods valid? g) Is the imposition of penalty under sections 114-A on the importer is valid? h) Is the imposition of penalty under section 112 (a) u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat if the importer makes and subscribes to a declaration before the proper officer, to the effect that he is unable for want of full information to furnish all the particulars of the goods required under this sub-section, the proper officer may, pending the production of such information, permit him, previous to the entry thereof: (a) to examine the goods in the presence of an officer of customs, or (b) to deposit the goods in a public warehouse appointed under section 57 without warehousing the same. (2) Save as otherwise permitted by the proper officer, a bill of entry shall include all the goods mentioned in the bill of lading or other receipt given by the carrier to the consignor. (3) The importer shall present the bill of entry under sub-section (1) before the end of the day (including holidays) preceding the day on which the aircraft or vessel or vehicle carrying the goods arrives at a customs station at which such goods are to be cleared for home consumption or warehousing: Provided that the Board may, in such cases as it may deem fit, prescribe different time limits for presentation of the bill of entry, which shall not be later than the end of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the warehouse . It may also happen that after examining the goods before filing the Bill of Entry, the importer may find that what were sent by the overseas supplier were not as per his order. If so, the importer can relinquish his title to the goods and does not have to pay any duty on them as per sub-section (2) of section 23 which reads as follows: SECTION 23. Remission of duty on lost, destroyed or abandoned goods .- (1) Without prejudice to the provisions of section 13, where it is shown to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs that any imported goods have been lost (otherwise than as a result of pilferage) or destroyed, at any time before clearance for home consumption, the Assistant Commissioner of Customs or Deputy Commissioner of Customs shall remit the duty on such goods. (2) The owner of any imported goods may, at any time before an order for clearance of goods for home consumption under section 47 or an order for permitting the deposit of goods in a warehouse under section 60 has been made, relinquish his title to the goods and thereupon he shall not be liable to pay the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment. If the examining officer in the shed finds any discrepancy, he writes his examination report and sends it back to the proper officer doing the assessment and at times it may result in again re-assessing the duty (for instance, if the quantity of goods is more than what is declared). It is still a process of assessment/re-assessment under Section 17. Similarly, if it is found that the imported goods are prohibited and cannot be imported or can be imported only a licence or NOC, etc. and such documents are not available, the examining officer refers the matter back to the Assessing Officer. Once the assessment is complete, the importer will have to pay the duty. If the duty as assessed is paid and if the goods are not prohibited goods, an order permitting clearance of goods for home consumption is issued under section 47 by the proper officer who is usually called as out of charge officer. 24. Once the order permitting clearance of goods for home consumption is issued under section 47, it results in the following: a) The goods cease to be imported goods [Section 2(25) imported goods means any goods brought into India from a place outside India but does not inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suing a Show Cause Notice. There is no need to assail the original assessment order in this case. In other words, if there is excess payment due to assessment, the claimant of refund will have to first challenge the assessment but if there is short payment, short levy, etc., a demand can be raised without first challenging the assessment. 28. The nature of this power under section 28 has been explained by the Hon ble Supreme Court in the case of Commissioner of Customs vs. Sayed Ali reported in [2011 (265) ELT 17 (SC)] as follows: 16. In the present cases, the import manifest and the bill of entry having been filed before the Collectorate of Customs (Imports) Mumbai, the same having been assessed and clearance for home consumption having been allowed by the proper officer on importers executing bond, undertaking the obligation of export, in our opinion, the Collector of Customs (Preventive), not being a proper officer within the meaning of Section 2(34) of the Act, was not competent to issue show cause notice for re-assessment under Section 28 of the Act. 29. It was further explained by the Hon ble Supreme Court in Canon India Ltd. that the nature of the power to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person or thing. On the other hand, the is called the Definite Article because it points out and refers to a particular person or thing. There is no doubt that, if Parliament intended that any proper officer could have exercised power under Section 28 (4), it could have used the word any . 11. Parliament has employed the article the not accidently but with the intention to designate the proper officer who had assessed the goods at the time of clearance. It must be clarified that the proper officer need not be the very officer who cleared the goods but may be his successor in office or any other officer authorised to exercise the powers within the same office. In this case, anyone authorised from the Appraisal Group. Assessment is a term which includes determination of the dutiability of any goods and the amount of duty payable with reference to, inter alia, exemption or concession of customs duty vide Section 2 (2) (c) of the Customs Act, 19624 . 12. The nature of the power to recover the duty, not paid or short paid after the goods have been assessed and cleared for import, is broadly a power to review the earlier decision of assessment. Such a power is not inhere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the goods for home consumption was not issued, the assessment is still open and the goods are still imported goods assessable to duty under section 17. There cannot be any demand under section 28. In the present case, the goods were not yet cleared. The importer (or his CB) filed a Bill of Entry self assessing the duty which has been found to be erroneous. The duty has to be reassessed and a speaking order has to be passed by the proper officer. If the officer of DRI is also the proper officer [under Section 28(11) or otherwise] and has done the reassessment, he must pass a speaking order. Any SCN under Section 28 can only arise after the goods have been cleared for Home Consumption and not before. This is because a demand under section 28 is in the nature of review of the assessment already done under section 17 by the proper officer. Without the assessment under section 17 being completed, there cannot be review under section 28 and the relevant date under section 28 for reckoning the time limit has not yet arisen. For this reason, the demand under section 28 in respect of the goods which have not yet been cleared for home consumption cannot be sustained and the answer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a or an . It determines what particular thing is meant; that is, what particular thing we are to assume to be meant. The is always mentioned to denote a particular thing or a person. . 11. Parliament has employed the article the not accidently but with the intention to designate the proper officer who had assessed the goods at the time of 3 (2001) 3 SCC 609 6 clearance. It must be clarified that the proper officer need not be the very officer who cleared the goods but may be his successor in office or any other officer authorised to exercise the powers within the same office. In this case, anyone authorised from the Appraisal Group. Assessment is a term which includes determination of the dutiability of any goods and the amount of duty payable with reference to, inter alia, exemption or concession of customs duty vide Section 2 (2) (c) of the Customs Act, 19624 . 35. It is further observed that in Canon India Ltd. case Hon ble Supreme Court has held as follows: 14. It is well known that when a statute directs that the things be done in a certain way, it must be done in that way alone. As in this case, when the statute directs that the proper officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and shall be deemed to have been and always had been the proper officers for the purposes of this section. 38. Sub-section 11 was specifically brought in to overrule the decision of the Hon ble Apex Court in the case of Syed Ali (Supra) wherein it was held that officers of Commissioner of Customs (Preventive) Mumbai were not proper officers under section 17 and hence no demand under section 28 can be issued by them. It is noteworthy that the power of issuing the SCN under Section 28 has not been extended to officers other than to proper officers under section 17. The amendment only notified several other officers (including officers of DRI) as proper officers under section 17. Thus, now there are several proper officers having jurisdiction over the same type of goods in the same area. Firstly, there is the AC/DC of the Appraising Group of the Custom House. Then there are officers of DRI, Customs Preventive, etc. who usually have a large territorial jurisdiction which overlaps with that of the Custom Houses. The validity of this amendment was under challenge in the case of Mangli Impex Ltd. vs. Union of India reported in [2016 (335) ELT 605 (Del) before the Hon ble High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. Provided further that notwithstanding issue of notice under this section, the proper officer may issue a supplementary notice under such circumstances and in such manner as may be prescribed. 41. This section does not require the proper officer under section 17 to issue a notice. This is in the nature of anti-smuggling function of the department and notices can be issued by officers of DRI and so far, we are not aware of any judicial decisions holding otherwise. Needless to say that the SCN must be accompanied by the Relied Upon Documents(RUDs) as it did in this case. These RUDs included several statements recorded by the officers during the course of investigation. Such statements are relevant for either prosecutions or for other proceedings (such as quasi-judicial proceedings) under the Act subject to some conditions under section 138B which reads as follows: SECTION 138B. Relevancy of statements under certain circumstances . - (1) A statement made and signed by a person before any gazetted officer of customs during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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