TMI Blog2021 (12) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner or the Assistant Commissioner of Customs and Central Excise namely, the first and the second respondents and/or the Appraiser of Customs who are competent authority albeit the Proper Officer to determine the correct classification. The Hon ble Supreme Court in CANON INDIA PRIVATE LIMITED has held that, if it was intended that officers of the Directorate of Revenue Intelligence who are officers of Central Government should be entrusted with functions of the Customs officers, it was imperative that the Central Government should have done so in exercise of its power under Section 6 of the Act. The Court further observed that the reason why such a power is conferred on the Central Government is obvious and that is because the Central Government is the authority which appoints both the officers of the Directorate of Revenue Intelligence which is set up under the Notification dated 04.12.1957 issued by the Ministry of Finance and Customs officers who, till 11.5.2002, were appointed by the Central Government. The court held that the notification which purports to entrust functions to a proper officer under the Customs Act has been issued by the Central Board of Excise and C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the respective Bills of Entries under Heading 2106 of the Customs Tariff Act, 1975, a quick decision should be taken and proceed in accordance with law - A proper officer can also initiate proceeding under Section 111(d) read with Section 124 of the Customs Act, 1962 to confiscate the consignment and impose penalty under Section 112 of the Custom Act, 1962. Since the imported goods are natural products and are prone to deterioration due to exposure to elements and natural causes with efflux of time and humid inclement weather condition in Chennai and are lying at Balmer Lawrie CFS, Chennai since the end of September, 2021 the 1st and the 2nd respondents and/or such other officers vested with the powers to assess the Bills of Entries are directed to exercise their powers under the Customs Act, 1962 one way or the other - The initial exercise regarding the determination of classification may be completed within 15 days from the date of hosting of this Order in the website. In case, the proper officer is of the primafacie view that the goods are liable for confiscation, seizure order may be issued followed by confiscating the imported goods if they are found to be prohibite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd condiments such as Black Pepper, Cassia, Star Aniseeds etc. and Arecanuts (Betelnuts) and is in the said business for over a period of more than two decades. 7. It is further submitted that the petitioner has a valid Import and Export Code No.0791011917 issued by the office of the JDGFT, Bangalore, attached to the Ministry of Commerce, Government of India. 8. That apart, it is submitted that the petitioner has also registered with the Income Tax and is a Income Tax Assessee. It is further submitted that the petitioner has also registered with the Food Safety and Standards Authority of India and holds Registration No.10012043000374. 9. Appearing on behalf of the petitioner, the Learned Senior Counsel Mr.Vijay Narayan duly instructed by Dr.S,Krishnanandh, Advocate submits that the petitioner has imported Arecanuts viz., unflavoured supari (Betelnut products) in sixteen containers from a overseas supplier in Myanmar and had filed the above three mentioned Bill of Entries for assessment and for clearing the imported consignments. 10. It is submitted that the total value of the import consignment is ₹ 4,33,90,500/-. It is submitted that originally the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the petitioner further submits that a clearance of the consignments should not be held as the imports are prohibited or banned under law for the timing in force. It is submitted that no prosecution is also in contemplation against the petitioner. 18. It is submitted that none of the circumstances stipulated in Circular No.22/2004 Cus dated 03.03.2004 for detaining and delaying clearance are attracted in the present case. On the other hand, it is submitted that a circular mandates sample to be drawn and that the imported consignment should be allowed to be cleared on provisional assessment as a matter of course. 19. The learned Senior Counsel for the Petitioner further submits that the above Circular has been issued to prevent congestion at the ports and warehouses. He further submits that the petitioner is willing to execute additional security in the form of bank guarantee to safeguard the interest of the revenue including possible fine and penalty. 20. The learned Senior Counsel for the Petitioner submitted that the intrusion by the third and the fourth respondents from Maharashtra for consignment imported through Chennai Port is both surprising and un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra:18 to 31 of the aforesaid judgment. He submits that the appeals filed by the department in the case of Commissioner of Customs, Kandla Vs. M/s Agarwal Metals and Alloys in Civil Appeal No.3411 of 2020 under similar circumstances was also dismissed vide order dated 31.08.2021 by the Hon ble Supreme Court. 28. The Learned Senior Counsel also drew attention to the decision of this Court rendered in the case of Global Metro Vs. The Commissioner of Customs and others in W.P.No.12454 of 2021 on 14.07.2021, relating the import of Black Pepper from Sri Lanka. In this connection, a reference was made to Para:13 from the said order which reads asunder:- 13. The commodity in question is agricultural produce. The variety of black pepper imported is stated to be specific to the region of Srilanka, an important ingredient in the making of spices used in Indian cuisine, with a short shelf life. Assuming for the sake of argument that investigation is concluded in favour of the petitioner, if the provisional release is not granted, the entire consignments would have been compromised. The balance of convenience would thus require, in my considered view, that the consignments be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent indicates that an earlier test report given on 08.11.2021 was modified at the request of the third and fourth respondents to insert remarks[physical appearance and sample] receipt indicating that these reports were stage managed to give an impression that the imported consignment do not meet the standards to satisfy Food Safety and Standards Authority of India (FASAI). The Learned Senior Counsel for the petitioner therefore prayed for allowing the writ petition. 36. The first and the second respondents have not filed their Counter. The learned counsel for the first and the second submits that the import is under investigation by the third and the fourth respondent and therefore the imported consignment cannot be cleared pending further investigation and any decision to issue SCN. 37. The third and fourth respondents have filed a detailed counter. Appearing on behalf of the third and fourth respondents, the Learned Senior Standing Counsel for the respondents, Mr.Sundareswaran submits that the petitioner has made a wrong declaration for self assessment under the provisions of the Customs Act,1962 as if the imported consignment were un-flavoured supari beetle n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Ministry s notification referred to supra. 45. That apart it is submitted that the petitioner has also undervalued the value of the imported consignments falling under Sub Heading 080280 by adopting a wrong classification under CTH 2106 90 30 to overcome the prohibition under the above Notification. 46. It is submitted that the value declared in the three Bills of Entry declared is USD 1350, whereas during the period of import of Betel Nuts imported, as per Tariff Rate for Chapter amended time to time, the per metric ton of Betel Nuts stands at 5149 USD. 47. It is submitted that since the test under Food Safety and Standards Authority of India (FASAI) have confirmed that the imported consignment are not fit for human consumption, the writ petition filed for release of the import consignment may be be dismissed by allowing the 3rd and 4th respondents to complete the investigation. 48. The learned counsel for the respondent further submits that ten out of sixteen consignment have been found to be unfit for human consumption and therefore the respondents in any event are justified in detaining the imported goods. 49. The learned counsel for the respondents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of those re-exported goods, then on the basis of that Bond, the Department may recover the same from the Petitioner. iii. The learned counsel for the Respondent, Additional Solicitor General, on further instructions from Mr.R.Vasudevan, I.R.S., Assistant Commissioner of Customs, who is present in court, submitted that before release of the goods in favour of the petitioner, the re-export of the goods as indicated in Paragraphs (i) and (ii) above, the Departmental Authorities may be permitted to take samples, to the extent of One K.G. from each of the consignment in question, the learned Counsel for the Petitioner upon instructions submitted that the Petitioner has no objection to that and therefore, subject to the aforesaid taking of the samples, the aforesaid compliances may be made by both parties immediately and report to that effect may be furnished in this Court. iv. The Adjudication Proceedings in pursuance of the impugned Show Cause notice may continue and the same shall remain subject to the final decision of the present writ appeal . 52. Heard the learned Senior counsel for the petitioner and the learned Standing Counsel for the first and second r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer to do so in purported exercise of powers under a section which does not confer any such power 22.In the above context, it would be useful to refer to the decision of this Court in the case of Commissioner of Customs v.Sayed Ali wherein the proper officer in respect of the jurisdictional area was considered. The consideration made is as hereunder:- 16 . It was submitted that in the instant case, the import manifest and the bill of entry were filed before the Additional Collector of Customs (Imports), Mumbai; the bill of entry was duly assessed, and the benefit of the exemption was extended, subject to execution of a bond by the importer which was duly executed undertaking the obligation of export. The learned counsel argued that the function of the preventive staff is confined to goods which are not manifested as in respect of manifested goods, where the bills of entry are to be filed, the entire function of assessment, clearance, etc. is carried out by the appraising officers functioning under the Commissioner of Customs (Imports). 17.Before adverting to the rival submissions, it would be expedient to survey the relevant provisions of the Act. Section 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e functions by the Board or the Commissioner of Customs; It is clear from a mere look at the provision that only such officers of customs who have been assigned specific functions would be proper officers in terms of Section 2(34) the Act. Specific entrustment of function by either the Board or the Commissioner of Customs is therefore, the governing test to determine whether an officer of customs is the proper officer . 20. From a conjoint reading of Sections 2(34) and 28 of the Act, it is manifest that only such a Customs Officer who has been assigned the specific functions of assessment and reassessment of duty in the jurisdictional area where the import concerned has been affected, by either the Board or the Commissioner of Customs, in terms of Section 2(34) of the Act is competent to issue notice under section 28 of the Act. Any other reading of Section 28 would render the provisions of Section 2(34) of the Act otiose inasmuch as the test contemplated under Section 2(34) of the Act is that of specific conferment of such functions. 23. We, therefore, hold that the entire proceeding in the present case initiated by the Additional Director General of the DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Entry and literature detailing specifications of models. The camera could have been operated to see the length of time of the single sequence and whether recording of the single sequence exhausts the total memory of the camera (including extended memory) and whether the cameras were eligible for exemption. It is difficult in such circumstances to infer that there was any wilful mis-statement of facts. In these circumstances, it must, therefore, follow that the extended period of limitation of five years was not available to any authority to re-open under Section 28(4). 29. In this view of the matter, we consider it unnecessary to answer the issue whether the cameras that were cleared on the basis that they were exempted from customs duty under Exemption Notification No. 15/2012 were in fact eligible for the exemption or not. The goods must be taken to have been validly cleared by the Customs officer. 30. We might note that cameras with similar specifications have been treated as exempted under the Explanatory Note to the Combined Nomenclature of the European communities. It is important to add that the same cameras have been considered to be eligible for exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 28; vii) Section 28B; viii) Section 28BA; ix) Section 30; x) Sub-Section (2) of Section 31; xi) Section 32; xii) Proviso to Section 34; xiiii) Section 35; xiv) Section 42; xv) Sub-section (3) of Section 45; xvi) Second Proviso to subsection (1) of section and subsection (2) of section 46; xvii) Section 48; xviii) Sub-section (3) of Section 54; xix) Section 59; xx) S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xiiii) Section 62; xiv) Clause (a) to (e) of Section 64; xv) Section 68; xvi) Section 69; xvii) Section 79; xviii) Section 83; xix) Section 86; xx) Section 92; and xxi) Section 93; 61. As far as the third and the fourth respondents and/or their counterparts in Chennai for Tamil Nadu are concerned, they are not the Proper Officers for the purpose of the assessment. Their power to issue SCN is spelt out in Sl.Nos.4 6 to the above notification which is reproduced below:- Sl.No. Designation of the Officers Functions under Section of the Customs Act, 1962 4 Deputy Director or Assistant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urported exercise of powers under a section which does not confer any such power. 63. However, it should be noted that Section 6 of the Customs Act, 1962 deals with Entrustment of functions of Board and Customs Officers on certain other officers from other departments including the one from the State Governments. 64. Under Section 6 of the Customs Act, 1962 the Central Government may, by notification in the Official Gazette, may entrust either conditionally or unconditionally to any officer of the Central or the State Government or a local authority any functions of the Board or any officer of Customs under the Act. 65. At this however, I would refrain from giving any opinion on one way of the other for the present as to whether the officers of the DRI namely the third and fourth respondent can be divested of all the powers and function in terms of the Notification based on the above decision of the Hon ble Supreme Court in Canon India Pvt.Ltd. vs. Commissioner of Customs, 2021(376) E.L.T.3 (S.C.) as this is not the occasion. 66. It should also be underlined that the officer s of DRI represents an elite wing of the investigative officers from the Revenue Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts of the various Custom Houses and Central Excise Collectorates throughout India in a scientific manner for successfully meeting the menace of organized smuggling. Various studies were undertaken by C.R.I.B. and suggestions were submitted to the Government of India in the Ministry of Finance (Revenue Division) The proposals made by Chairman, Central Board of Revenue and Finance Secretary dealing with the re-organization of Central Revenue Intelligence Bureau and creation of the Directorate of Revenue Intelligence makes for an interesting reading as it provides an insight into the history of, rationale behind and expectations from DRI. The Chairman noted that Till about 1955, the officers of the CRIB undertook adhoc investigations or enquiries, at the instance of the Board, and these were mostly enquiries against senior officers accused of corruption. The Bureau could not devote its attention to anti-smuggling measures on any organized pattern until after the taking over of anticorruption work by the Vigilance wing, and the availability of its full complement of officers about a year ago. In this year, under the personal guidance of Member (Central Excise) the Burea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation officers of the Custom Houses and Central Excise Collectorates deployed on similar work. 69. Their false is limited to pass on intelligence to the field formations and stop leakage of the revenue. 70. If the Import or Export is to be prohibited under the Customs Act, 1962, there has to be a corresponding notification of the Central Government under Section 11 of the above Customs Act, 1962. The Central Government may by a Notification prohibit either absolutely or subject to such conditions (to be fulfilled before or after clearance) import of goods. Section 11 of the Customs Act, 1962 reads as under: 11. Power to prohibit importation or exportation of goods (1) If the Central Government is satisfied that it is necessary so to do for any of the purposes specified in sub-section (2), it may, by notification in the Official Gazette, prohibit either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification, the import or export of goods of any specified description. (2) The purposes referred to in sub-section (1) are the following:- (a) the maintenance of the security of India; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with; 72. However, under Section 3(2) of the Foreign Trade (Development And Regulation) Act, 1992, the Central Government has power to make provisions for prohibiting, restricting or otherwise regulating, in all cases or in specified classes of cases and subject to such exceptions, if any, as may be or under the Order, the [import or export of goods or services and technologies.]. 73. As per Section 3(3) of the same Act, all goods to which any Order under sub-section(20 ) to Section 3 applies shall be deemed to be goods the import or export of which has been prohibited under Section 11 of the Customs Act, 1962 (52 of 1962) and all the provisions of that Act shall have effect accordingly. 74. The view has also been expressed by the Hon'ble Supreme Court in the case of Union of India vs Agrocas Llp 2020 (373) E.L.T. 752 (S.C.), wherein paragraph 54 it was observed as under: Section 3 of the FTDR Act, as enacted, had undergone amendments by addition of proviso to sub-section (2) and by insertion of sub-section (4) vide Act 25 of 2010 with effect from 25th August 2010. Sub-section (1) of Section 3 states that the Central Government may, by an order publi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Supreme Court has reiterated that if the goods are prohibited, option to redeem the goods under Section 125 cannot be given. It will be useful to refer to para 157 ,158 and 159 from the said judgment of the Hon ble Supreme Court which reads as under :- 157. Once it is clear that the goods in question are improperly imported and fall in the category of prohibited goods , the provisions contained in Chapter XIV of the Customs Act, 1962 come into operation and the subject goods are liable to confiscation apart from other consequences. Having regard to the contentions urged and the background features of these appeals, the root question is as to how the goods in question are to be dealt with under Section 125 of the Customs Act? The relevant part of Section 125 of the Customs Act reads as under: - Section 125(1) of the Customs Act, 1962 125. Option to pay fine in lieu of confiscation.-( 1) Whenever confiscation of any goods is authorised by this Act, the officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssess Bill of Entry filed by an importer. Even if the jurisdictional officer of the DRI from Chennai i.e., the counter parts of the third and the fourth respondents felt that the import was without proper licence and that there was an attempt to import prohibited goods, it is their duty to merely inform the assessing officers namely The Additional Commissioner of Customs, The Assistant Commissioner of Customs, Superintendent of Central Excise and Customs or the appraiser of customs who are the assessing officer s to make proper assessment to safeguard the interest of the Revenue. 81. Thus, the exercise carried out hitherto, by the third and the fourth respondents at the stage of assessment of the Customs Duty is partly necessary, partly unnecessary and partly without the jurisdiction. It was their duty only to tip off the instructions to the jurisdictional proper officer who have to assess the Bills of Entry filed by the petitioner. 82. It is for the Proper Officer as defined in Section 2(34) of Section 2 of the Customs Act, 1962 r/w Notification No.40/2012- Cus,(N.T.) dated 02.5.2012 to determine the classification and assessee the imported goods. 83. If the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject to interpretation and judicial pronouncements to be made in the light of the decision of the Hon ble Supreme Court in Cannon India Ltd. case . 90. Suffice to state, at this stage, the proper officer who have been given the task to assess the Bill of Entry which involves both classification and valuation and determination as to whether the import of the goods is prohibited should be allowed to pass appropriate Order under the Custom Act, 1962. Such Officers can rely on the information which may be passed on by the third and fourth respondents or their counter parts in Chennai while assessing the goods. 91. Since the imported goods are natural products and are prone to deterioration due to exposure to elements and natural causes with efflux of time and humid inclement weather condition in Chennai and are lying at Balmer Lawrie CFS, Chennai since the end of September, 2021 the 1st and the 2nd respondents and/or such other officers vested with the powers to assess the Bills of Entries are directed to exercise their powers under the Customs Act, 1962 one way or the other. 92. The initial exercise regarding the determination of classification may be completed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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