TMI Blog2022 (3) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... iction and therefore all proceedings undertaken by the Department on the basis of or pursuant to the said show cause notices, including the impugned orders dated 31.01.2018, 16.07.2019 and 16.04.2019 respectively are without jurisdiction. Thus, Supreme Court in Canon India held that the entire proceedings initiated by the Additional Director General, DRI by issuance of a show cause notice was without any authority of law and was, therefore, liable to be set aside. The Punjab and Haryana High Court in M/S STEELMAN INDUSTRIES VERSUS UNION OF INDIA AND OTHERS, [ 2021 (8) TMI 1236 - PUNJAB AND HARYANA HIGH COURT ], in view of the decision of the Supreme Court in Canon India, allowed the Writ Petition and set aside the entire proceedings arising from the show cause notice, as the Additional Director General, DRI was not the proper officer. Therefore the proper officer to whom the power is conferred under Section 28 of the Act and other related provisions would necessarily mean the proper officer who in the first instance assessed and cleared the goods, i.e., Appraising Officer in the Customs port or Air Cargo Complex. Therefore the Additional Director General of DRI cannot be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Imported Goods) Rules, 2007/ Customs Valuation (Determination of Value of Imported Goods) Rules, 1988 respectively. It has also been held that the goods imported were liable to confiscation under Sections 111(m) and 111(o) of the Act, but since they have been cleared finally and not available for confiscation no redemption find is imposed. (iii) Appeal Nos. C/77236/2019 C/77237/2019 By the Order-in-Original dated July 16, 2019 the Commissioner of Customs (Airport Administration), Kolkata rejected the declared assessable value of consignments of designs and drawings imported by TSL under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, redetermined the transaction value thereof and confirmed differential customs duty demand of ₹ 124,20,65,809.53 against TSL under Section 28 of the Act, along with interest under Section 28AB of the Act. Penalties of ₹ 124,20,65,809.53 upon TSL under Section 114A of the Act and ₹ 1 crore upon TMILL under Section 112(a)(ii) of the Act were imposed. Consignment of imported goods seized on July 16, 2019 was also confiscated under Section 111(m) of the Act, but allowed redemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., 2021 (12) TMI 859 BOMBAY HIGH COURT (v) Sterling Meta Plast India Pvt. Ltd. Vs. Commissioner of Customs (Airport Administration), Kolkata, 2021 (11) TMI 560 CESTAT KOLKATA (vi) Evershine Customs (C F) Pvt. Ltd. Another Vs. Commissioner of Customs, 2021 (8) TMI 906 - CESTAT NEW DELHI (vii) Arun Kumar Agarwal and M/s Venus Industries Vs. The Principal Commissioner of Customs (Import), New Delhi, 2022 (1) TMI 135 CESTAT NEW DELHI. 2.2 It is further the contention of the learned Senior Counsel on behalf of the appellants that although a review petition has been filed by the Revenue against this decision before the Apex Court, as held in the following decisions, including that of the jurisdictional High Courts of Calcutta and Patna, this does not make the judgments of the Apex Court as non-binding; it has to be followed having reached finality until recalled or modified or varied: (i) Dabur India Limited Vs. Union of India, 2016 (335) ELT 392 (Pat.) (ii) Aditya International Ltd. Vs. Commissioner of Customs (Port), 2016 (332) ELT 95 (Cal) (iii) Yu Televentures Pvt. Ltd. Vs. Union of India, 2016 (340) ELT 88 (Del). 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 3 by designation or is appointed as officer of Customs under section 4, entrustment of functions of Customs officer on him under section 6 is a completely redundant exercise. By considering DRI as a separate department, the organisational structure of CBIC is misunderstood. ● Sections 3, 4, 5 and 2(34) are a complete scheme in themselves for purposes of appointment of officers of Customs and assigning powers to them under the Customs Act and hence Section 2(34) cannot be read in isolation. ● Section 28 is primarily in relation to recovery of duty and per se not in relation to assessment of duty. The proper officer for the purposes of section 28 should not necessarily be only an officer from the assessment group. In Canon India the Apex Court has misinterpreted Section 28 as power of review. The learned Authorised Representative therefore submitted that the hearing of these appeals may be deferred till the review petitions filed are disposed of by the Hon ble Supreme Court. 4. The submissions advanced by the learned Senior Counsel appearing on behalf of the appellants and the learned Authorised Representative of the Department have been considered an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne in a certain way, it must be done in that way alone. As in this case, when the statute directs that the proper officer can determine duty not levied/not paid, it does not mean any proper officer but that proper officer alone. We find it completely impermissible to allow an officer, who has not passed the original order of assessment, to re-open the assessment on the grounds that the duty was not paid/not levied, by the original officer who had decided to clear the goods and who was competent and authorised to make the assessment. The nature of the power conferred by Section 28 (4) to recover duties which have escaped assessment is in the nature of an administrative review of an Act. The section must therefore be construed as conferring the power of such review on the same officer or his successor or any other officer who has been assigned the function of assessment. In other words, an officer who did the assessment, could only undertake reassessment [which is involved in Section 28 (4)]. 15. It is obvious that the re-assessment and recovery of duties i.e. contemplated by Section 28(4) is by the same authority and not by any superior authority such as Appellate or Revisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the entire proceedings initiated by the Additional Director General, DRI by issuance of a show cause notice was without any authority of law and was, therefore, liable to be set aside. 7. The aforesaid decision of the Supreme Court in Canon India was subsequently followed by the Supreme Court in Agarwal Metals and Alloys (supra) and the judgment is reproduced below: Delay condoned. In view of decision dated 09.03.2021 of three Judges 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 show cause notice(s) in the present cases was also issued by Additional Director General (ADG), Directorate of Revenue Intelligence (DRI), who is not a proper officer within the meaning of Section 28(4) read with Section 2(34) of the Customs Act, 1962. Hence, these appeals stand dismissed. However, dismissal of these appeals will not come in the way of the competent authority to proceed in the matter in accordance with law. Pending application(s), if any, stand disposed of. 8. Apart from the aforesaid two decisions of the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elligence, Bangalore (supra) did not accept the plea of the Department that since the review petition had been filed by the Department in Canon India, the hearing should be adjourned and in view of the decision of the Supreme Court in Canon India, set aside the order for the reason that the show cause notice had not been issued by the proper officer. (d) The Punjab and Haryana High Court in M/s. Steelman Industries vs. Union of India, 2021 (8) TMI 1236 Punjab Haryana High Court also, in view of the decision of the Supreme Court in Canon India, allowed the Writ Petition and set aside the entire proceedings arising from the show cause notice, as the Additional Director General, DRI was not the proper officer. 9. Various Benches of the Tribunal, including this Bench, have also set aside the impugned orders for the reason that the show cause notices were not issued by the proper officer, since they were issued by DRI. Some of the said decisions are: (i) Sterling Meta Plast India Pvt. Ltd. Vs. Commissioner of Customs (Airport Administration), Kolkata, 2021 (11) TMI 560 CESTAT KOLKATA (ii) Evershine Customs (C F) Pvt. Ltd. Vs. Commissioner of Customs, New Delhi, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bay High Court in the case of Commissioner of Customs (Export) Vs. Reliance Industries Ltd., 2021 (12) TMI 859 BOMBAY HIGH COURT. It has been observed and held therein as under: 9. On the submissions of Ms. Cardozo that the Supreme Court has not considered all the circulars and provisions of subsection (11) in Section 28 of the said Act in Canon India Private Limited (supra) and we would agree with her still, even if the Supreme Court reviews the judgment of Canon India Private Limited (supra), the review petition having been filed, and holds the Additional Director General of DRI was also the proper officer conferred with powers of Section 28 of the said Act, in the facts and circumstances of this case, the Additional Director General of DRI not having, in the first instance, assessed and cleared the goods, he will not be the‟ proper officer for issuance of show cause notice under Section 28(1) of the said Act. The appeal has to fail because the show cause notice originally issued itself would be termed non-est. The entire proceeding in the present case initiated by the Additional Director General of DRI by issuing show cause notice is invalid without any authority o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apex Court in the case of M/s. Canon India Pvt Ltd. (supra) because there is nothing on record to show that the officer of DRI or his predecessor in office had done the assessment of the Bill of Entry in respect of the goods which were seized from the shop of the importer. (emphasis added) 12.2 In view of the above, this contention made on behalf of the Revenue also does not survive, particularly in view of the fact that in none of the instant appeals the original assessments were made by any DRI officer. They were all done by the jurisdictional Customs officers under the Customs Act, 1962. 13. The learned Authorised Representative appearing for the Department further submitted that the notices in the instant appeals were also issued under Section 124 of the Act for confiscation of the goods under Section 111 and imposition of penalties under Sections 112, 114 and 114A of the Act and therefore the impugned orders to this extent is not bad in law. Dealing with this contention a Coordinate Bench of the Tribunal in the case of Vinay Agarwal Vs. Commissioner of Customs (Adjn.), Mumbai, 2021 (11) TMI 369 CESTAT MUMBAI observed and held as under: 16. Learned authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... misdeclaration of value. The demand of duty on allegation of misdeclaration of value cannot be segregated from action of confiscation and penalty based also on misdeclaration of value. Consequently since the demand of duty fails, action for confiscation and penalty cannot survive. We hold so on the weight of authority referred to above. 13.1 In this regard reference may also be made to the decision of another Coordinate Bench of the Tribunal in the case of Arun Kumar Agarwal and M/s Venus Industries Vs. The Principal Commissioner of Customs (Import), New Delhi, 2022 (1) TMI 135 CESTAT NEW DELHI. In paragraph 8 of the order it has held as under: 8. We have also considered the fact that penalties were imposed under Section 114, 114A and 114AA in the impugned order and the SCN for confiscation of goods or imposition of penalties is issued under Section 124 of the Customs Act and not under Section 28. The SCN under Section 124 need not be issued by the proper officer. However, in the present case the basis for the proposed confiscation of goods and imposition of penalties in the SCN has been the reassessment of the goods and demand of the duty under Section 28(4). The basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cide the appeals without a final decision on the issues raised in the Supreme Court in M/s. SRF Ltd. Vs. Commissioner of Customs, Chennai, passed in Civil Appeal No. 9440 of 2003 [2015 (318) ELT 607 (SC)]. 8. We are constrained to observe that the impugned order, dated 23.11.2015, which the Respondent No. 3 has passed, is wholly misconceived inasmuch as mere fact of filing of the review petition, in the Supreme Court, seeking review of the Supreme Court decision, in M/s. SRF Ltd. Vs. Commissioner of Customs, Chennai, passed in Civil Appeal No. 9440 of 2003 (supra), could not have been a ground for dismissing the appeals. In fact, this legal position could not be disputed on behalf of the respondents. 14.3 In this regard it is also relevant to state that similar submissions advanced on behalf of the Revenue before the Hon ble Karnataka High Court has also been rejected by the said Hon ble Court in the case of Mohan C. Suvarna Vs. Principal Commissioner of Customs (supra). 15. In view of the aforesaid and respectfully following the decisions of the Apex Court, the Hon ble High Courts and the Coordinate Benches of the Tribunal, we hold that the show cause notices dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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