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Issues:
1. Validity of differential duty demand served on the petitioner. 2. Liability of clearing agents under Section 147 of the Customs Act. Analysis: Issue 1: Validity of the differential duty demand: The importer initially cleared the consignment of crude drugs under a valid import license, paying the import duty as assessed by customs officials. Subsequently, a demand notice was issued for a differential duty amount, which the importer contested. Despite no response from the importer to a show cause notice, the Assistant Collector confirmed the demand. However, a revision petition to the Government of India resulted in a remit order, requiring a fresh show cause notice. The final order holding the importer liable was passed after the importer failed to respond. The petitioner, acting as the clearing agent, was served with a demand for the unpaid amount in 1977. The petitioner challenged the demand, arguing that the recovery from them was time-barred and that liability could not be transferred without proper compliance under Section 147 of the Customs Act. Issue 2: Liability of clearing agents under Section 147: The respondent contended that the liability of the importer could be passed on to the clearing agent under Section 147 of the Customs Act. However, the proviso to Section 147(3) stipulates that the duty cannot be recovered from the agent unless it is deemed unrecoverable from the owner, importer, or exporter. The court noted that the primary liability lies with the importer under Section 28, and the agent can only be held liable if specific conditions in Section 147 are met. The court emphasized that the assistant collector must ascertain that all efforts to recover from the importer have been exhausted before transferring the liability to the agent. In this case, the court found that there was no evidence presented to show that the importer was unreachable or that all avenues for recovery had been pursued. Therefore, the demand issued against the clearing agent was quashed, as Section 147 could not be invoked without demonstrating the impossibility of recovering the amount from the importer. In conclusion, the court allowed the writ petition, quashing the demand against the clearing agent, and refrained from awarding costs.
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