TMI Blog2021 (11) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... the realm of quasi-judicial functions. Assessment of duty and processing of export goods - HELD THAT:- The process of making an entry under section 50 and self assessment of duty under section 17(1) happen simultaneously because the data required for assessing duty such as the nature of the goods, their classification under the Customs Tariff, rate of duty, exemption notification, quantity and value are in the Shipping Bill and once these data is fed into the Customs EDI system both self assessment of duty under Section 17(1) and filing of Shipping Bill under Section 50 are complete and the arithmetical process of calculating the duty is done by the system itself - the process of permitting clearance of export goods under Section 51 is commonly referred to as issuing of Let Export Order [ LEO ]. The proper officer who issues the LEO is different from the assessing officer and is usually posted in the Customs shed where he checks the documents and if required goods and issues the LEO. Assessments can also be appealed against by the Revenue. However, if duty is not levied, not paid, short levied, short paid or erroneously refunded, an SCN can be issued under section 28 by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order is not sustainable as it was not proposed in the SCN and hence is beyond its scope - appeal allowed - decided in favor of appellant. - C/75434 & 76104/2018 - Final Order Nos.75672-75673/2021 - Dated:- 9-11-2021 - MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) AND MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri Arijit Chakraborty, Advocate for the Appellant Shri M.P. Toppo, Authorized Representative for the Respondent ORDER These two appeals assail the same Order in Original [ Impugned Order ] dated 29 December 2017 passed by learned Commissioner adjudicating upon the Show Cause Notice [ SCN ] dated 17 November 2014 issued by the Directorate of Revenue Intelligence [ DRI ] under Sections 124 read with section 28(4) and erstwhile proviso to section 28 of the Customs Act, 1962 [ Act ] . Appeal No.C/75434/2018 is filed by M/s. Monarch International challenging the penalty of ₹ 10 lakhs imposed on it under Section 114(i) and ₹ 10 lakhs imposed on it under section 114AA. Appeal no. C/76104/2018 is filed by Shri Mahendra Kumar Sutar [ Sutar ] proprietor of M/s. RC Metal Industries Ltd. [ Exporter ], the exporter. The factual matrix which led to the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt duty amounting to ₹ 41,73,707/- (Rupees Forty One Lakhs Seventy Three Thousand Seven Hundred and Seven only) and cess amounting to ₹ 2,777/- (Two thousand Seven Hundred and Seventy Seven only) leviable on goods exported under Shipping Bill No. 8496980 dated 18.11.2013. (iv) I order for appropriation of the deposit amount of ₹ 50,00,000/- (Rupees Fifty Lakhs only) made by M/s R.C. Metal Industries to the Central Government account towards the Export Duty and Cess amounts payable for the goods exported under Shipping Bill No. 8496980 dated 18.11.2013. (v) I impose penalty of ₹ 10,00,000/- (Rupees Ten lakh only) on Shri Mahendra Kumar Sutar, Proprietor of M/s R.C. Metal Industries under Section 114(i) of the Customs Act, 1962 for rendering the export goods under Shipping Bill No. 8496980 dated 18.11.2013 liable for confiscation under Section 113(d) and 113(i) of the Customs Act, 1962. (vi) I impose penalty of ₹ 10,00,000/- (Rupees Ten Lakh only) on Shri Ashok Sawhny, Proprietor of M/s Monarch International under Section 114(i) of the Customs Act, 1962 for rendering the export goods under Shipping Bill No. 8496980 dated 18.11.2013 liable for co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants submits that the SCN itself has been issued without jurisdiction since ADG, DRI is not the proper officer to issue an SCN demanding duty under Section 28(4) as held by the Larger Bench of Hon ble Supreme Court in the case of Cannon India Ltd. vs. Commissioner of Customs [ 2021 (376) ELT 3 (SC) ] This judgment was followed by the Hon ble High Court of Madras in Quantum coal [ Quantum Coal Energy (P) Ltd. vs The Commissioner [Writ Petition (MD) 10186 10817/2014] ] and Hon ble High Court of Karnataka in the case of in the case of Guvidivan [ Givaudan India Pvt Ltd. vs Principal Commissioner of Customs, Bangalore (Writ Petition no. 10773/2018 and 4628/2018) ]. More recently, it was followed by another larger bench of Hon ble Apex Court in the matter of Agarwal Metals [ Commissioner of Customs Kandla vs. M/s. Agrawal Metals and Alloys [Civil Appeal No. 3411/2020] ] and while dismissing Revenue s appeals it held as follows: Delay condoned. In view of decision dated 09.03.2021 of three judge Bench of this Court in Civil Appeal No. 1827 of 2018 titled as M/s. Canon India Private Ltd. vs. Commissioner of Customs reported in 2021 (3) SCALE 748. These appeals must fail as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /duty paid where someone has filed a return or, in case of Customs, filed a Bill of Entry for import or a Shipping Bill for export which is the assessment function. It is a quasi-judicial function and assessment orders can be appealed against. The second function is to catch those who do not file declarations and pay taxes which are the preventive functions; these include collecting intelligence, investigating, searching, seizing, arresting, recording statements, etc. as well as supervising some activities such as stuffing and de-stuffing of containers or loading and unloading of ships. These are in the nature of executive functions and are not appealable. A panchnama drawn during the investigation, for instance, is not an appealable document. If the investigations lead to discovery of evasion of duty or prohibitions and an SCN is issued, thereafter, it moves to the realm of quasi-judicial functions. Assessment of duty and processing of export goods 8. One who wishes to export has to make an entry of the goods to be exported under Section 50 by presenting to the proper officer a Shipping Bill. In the Shipping Bill, the exporter has to self-assess the duty under Section 17(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court. 12. Sometimes excess duty may have been paid either because it was paid in excess of what was assessed or it could have been paid because it was wrongly assessed to a larger amount (say due to wrong classification or valuation or not applying an exemption notification, etc.). The question which arises is if the duty was paid in excess due to incorrect assessment, can the refund be sanctioned or will it amount to changing the assessment. It has been held by the Hon ble Supreme Court in the cases of Priya Blue [ Priya Blue Industries v. Commissioner of Customs 2004 (172) E.L.T. 145 (SC) ] and Flock India [ Collector of Central Excise, Kanpur v.Flock (India) Pvt. Ltd., 2000 (120) ELT 28 5 (SC) ] that the officer sanctioning the refund cannot sit in judgment over the assessment by the assessing officer. He can sanction refund only if it is due as per the assessment already done. If the assessment is found to be incorrect, then it can be appealed against before the Commissioner (Appeals) and only when the assessment is changed, can there be any consequential refund. It must be pointed out that during the relevant period, all assessments under section 17 had to be done by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power under section 28 is a re-assessment. The relevant extract is below: 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. 15. In Cannon India Ltd. the power under Section 28 has been held to be a power to review and reopen the assessment and reassess. The relevant paragraph is as follows: 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 inherent in any authority. Indeed, it has been conferred by Section 28 and other related provisions. The power has been so conferred specifically on the proper officer which must necessaril ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and section 73 of the Finance Act, 1994 empower the central excise officer to issue notices under those Acts. Even in the more recent law, the Central GST Act, 2017, demand under Section 73 can be raised by the proper officer . This section also applies to demands under the Inter-State GST Act, 2017. State GST Acts, likewise empower the proper officer to raise a demand. It is immaterial for this case as to who the proper officer or the Central Excise officer under these laws are. Suffice it to say that the Parliament has consistently ensured certainty by giving the power of raising a demand only to the officer and not officer or any officer . 18. Officers of DRI have been held to be NOT the proper officers to issue a notice under Section 28 both in Sayed Ali and in Canon India. In the Customs Act, the Shipping Bill has to be filed with the proper officer under Section 50 which can be re-assessed under Section 17 by the proper officer and finally the clearance of goods under Section 51 is also to be given by the proper officer . Current shipping bill 19. Insofar as this case is concerned, with respect to the current shipping bill, it was assessed p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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