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2019 (4) TMI 1095 - AT - CustomsValidity of SCN - SCN issued under the provisions of Section 28 of the Customs Act without the assessment being finalised under Section 18(2) of the Customs Act - demand along with penalty - HELD THAT - The SCN was issued under the provisions of Section 28 of the Customs Act and also proposing the levy of interest, imposition of penalty under the various provisions of the Act. In the SCN, there is no whisper about the consignment having been assessed provisionally and proposed to be finalised by considering the test report obtained from the CRCL. The appropriate course would have been to consider the test report and apply the same to the imported consignment with a notice to finalise the same under the provisions of the Customs Act. It is completely against the provisions of the Custom Act to issue the Show Cause Notice under the provisions of Section 28 of the Customs Act without the assessment being finalised under Section 18(2) of the Customs Act. Revenue has not brought any other decision in support of the impugned order, that as to how without the final assessment, which at the first instance, has been made provisional the demand can be issued - This is act of respondent Commissioner under Section 28 of the Customs Act in contravention of the provisions of Section 18(2) of the Act, and is not sustainable. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Validity of the impugned order passed by the Commissioner, Customs (Port), Kolkata confirming demand and penalty against the appellants. 2. Finalization of provisional assessment under Section 18 of the Customs Act, 1962. 3. Allegation of mis-declaration of goods imported. 4. Legality of the issuance of Show Cause Notice under Section 28 of the Act without finalization of assessment. 5. Applicability of penalty and interest under the provisions of the Act. Analysis: Issue 1: Validity of the impugned order The appeal was filed against the order passed by the Commissioner confirming the demand and penalty against the appellants. The Commissioner also directed the finalization of the provisional assessment done under Section 18 of the Customs Act. The case involved the import of synthetic spinning waste, which was alleged to have been mis-declared as acrylic fiber. Issue 2: Finalization of provisional assessment The appellant imported the consignment and it was provisionally assessed under Section 18(1) of the Act. However, the finalization of the assessment was pending when a show cause notice was issued by the DRI. The appellant argued that the issuance of the show cause notice without finalizing the assessment was contrary to the provisions of the Act, citing relevant case laws. Issue 3: Allegation of mis-declaration The Customs authorities alleged that the appellant deliberately mis-declared the imported consignment as acrylic waste to pay less duty. Test reports confirmed that the goods were acrylic fiber, not waste. This mis-declaration led to the demand for payment of differential customs duty, interest, and imposition of penalties. Issue 4: Legality of Show Cause Notice issuance The appellant contended that the show cause notice issued under Section 28 of the Act was improper as the assessment had not been finalized. Citing legal precedents, the appellant argued that the notice was without jurisdiction and the confiscation of goods could not be based on provisional assessment. Issue 5: Applicability of penalty and interest The Tribunal considered the arguments presented by both sides and found that the provisional assessment had not been finalized before the issuance of the show cause notice. Consequently, the demand, penalty, and interest imposed on the appellant were deemed unsustainable. The impugned order was set aside, allowing the appeals, with a directive for the Revenue to finalize the provisional assessment after considering the investigation report. This comprehensive analysis highlights the key legal issues, arguments presented, relevant case laws cited, and the Tribunal's decision based on the facts and legal provisions involved in the case.
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