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2021 (8) TMI 906 - AT - CustomsMis-declaration of the goods - Bill of Entry filed by the CB on behalf of the importer in terms of nature of goods, quantity and value, etc. - goods even before the goods have been cleared for home consumption - goods which were seized from the shop of the importer, i.e., those goods which had been imported in the past - Competence of DRI to issue the SCN - confiscation - penalty - Violation of principles of natural justice. Was there a mis-declaration of the goods in the Bill of Entry filed by the CB on behalf of the importer in terms of nature of goods, quantity and value, etc. ? - HELD THAT - The importer cannot escape his responsibility of making a true and accurate and complete declaration of the imported goods in the Bill of Entry. If the importer has any doubts about the goods, there are sufficient safeguards which enable him to examine the goods before filing the Bill of Entry, request for the goods to be deposited in the warehouse or even relinquish his title to the goods and thereby escape his liability to pay Customs duties. Merely saying that I have a purchase order which says X but my supplier sent me Y cannot be an excuse as the only person in India who has knowledge about the imported consignment is the importer. If he has doubts, there are sufficient safeguards in the Act itself. Can the importer s argument that they had placed an order for some other goods and the overseas supplier had sent the wrong goods and therefore, they have no liability, be accepted? - Is the imposition of penalty under section 112 (a) upon the CB valid? - HELD THAT - The importer s assertion that the overseas supplier has sent different goods cannot be accepted. On the other hand, as far as the CB is concerned, he filed the Bill of Entry as per the documents provided by the importer. There is nothing on record to show that any act or omission on his part has rendered the goods liable for confiscation under section 111. In fact, the only allegation in the SCN is that he failed to discharge his obligations under the CBLR 2013 and such a failure, even if correct, does not attract penalty under section 112. CBLR 2013 is a self contained set of regulations which provides for penalties for not fulfilling the obligations. Whether any demand can be made under section 28(4) even before the proper officer has made an order clearing the goods for home consumption? - HELD THAT - In the present case, the goods were not yet cleared. The importer (or his CB) filed a Bill of Entry self assessing the duty which has been found to be erroneous. The duty has to be reassessed and a speaking order has to be passed by the proper officer. If the officer of DRI is also the proper officer under Section 28(11) or otherwise and has done the reassessment, he must pass a speaking order. Any SCN under Section 28 can only arise after the goods have been cleared for Home Consumption and not before. This is because a demand under section 28 is in the nature of review of the assessment already done under section 17 by the proper officer. Without the assessment under section 17 being completed, there cannot be review under section 28 and the relevant date under section 28 for reckoning the time limit has not yet arisen. For this reason, the demand under section 28 in respect of the goods which have not yet been cleared for home consumption cannot be sustained. Whether a demand under section 28 can be raised in respect of goods seized from the shop of the importer? - HELD THAT - The Show cause notice was issued by an officer of Director of Revenue Intelligence and not by the assessing officer under section 17 who had the assessment of the Bill of Entry in respect of the goods seized from the shop fo the importer - even if section 28(11) is considered, the SCN demanding duty under section 28 issued by the officer of DRI is invalid, 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. Penalty u/s 112(a) of Customs Act - non-fulfilment of obligations under the CBLR 2013 - HELD THAT - No penalty can be imposed under section 112 for failure to fulfil obligations even if they are found to be true. Therefore, the penalty needs to be set aside. Confiscation of goods - HELD THAT - There is nothing in the impugned order or the order of the original authority to show that the procedure prescribed under section 138B has been followed with respect to the statements relied upon. It is found necessary to remand it to the original authority to complete the procedure under section 138B with respect to each of the statements which has been relied upon in the SCN and decide afresh on the confiscations and penalties. Petition disposed off.
Issues Involved:
1. Mis-declaration of goods in the Bill of Entry. 2. Importer’s liability for incorrect goods sent by the overseas supplier. 3. Demand of differential duty under Section 28(4) before goods are cleared for home consumption. 4. Demand of differential duty under Section 28(4) on goods seized from the importer’s shop. 5. Competence of DRI to issue Show Cause Notice (SCN) under Section 28. 6. Validity of confiscation of seized goods. 7. Validity of penalty imposition under Section 114A on the importer. 8. Validity of penalty imposition under Section 112(a) on the Customs Broker (CB). 9. Violation of principles of natural justice. Detailed Analysis: 1. Mis-declaration of Goods in the Bill of Entry: The examination of the imported goods revealed discrepancies in quality and quantity compared to the Bill of Entry. The CB filed the Bill of Entry based on documents provided by the importer. The goods were mis-declared, and the CB could not explain the discrepancy. The responsibility for accurate declaration rests with the importer under Section 46 of the Customs Act. 2. Importer’s Liability for Incorrect Goods Sent by the Overseas Supplier: The importer argued that the incorrect goods were sent by the supplier. However, the importer is responsible for the accuracy of the declaration. Section 46 and Section 23 provide safeguards for the importer to examine goods before filing the Bill of Entry or to relinquish title to the goods if they are not as ordered. The importer’s argument was rejected. 3. Demand of Differential Duty Under Section 28(4) Before Goods Are Cleared for Home Consumption: Customs duty is assessed under Section 17, and goods are cleared for home consumption under Section 47. A demand under Section 28(4) is a review of the assessment and can only be issued after goods are cleared for home consumption. Since the goods were not yet cleared, the demand under Section 28(4) was premature and not sustainable. 4. Demand of Differential Duty Under Section 28(4) on Goods Seized from the Importer’s Shop: Goods seized from the shop had already been cleared for home consumption, making them subject to a demand under Section 28. However, only the proper officer who assessed the goods under Section 17 or his successor can issue such a demand. The SCN issued by the DRI was invalid as per the Supreme Court’s decision in Canon India. 5. Competence of DRI to Issue SCN Under Section 28: The Supreme Court in Canon India held that only the proper officer who assessed the goods can issue a demand under Section 28. The DRI officer was not the proper officer who assessed the goods under Section 17, making the SCN invalid. 6. Validity of Confiscation of Seized Goods: Confiscation under Section 111 and penalties under Sections 112 and 114A require a notice under Section 124. The SCN must be accompanied by Relied Upon Documents (RUDs) and follow the procedure under Section 138B. The case was remanded to the original authority to complete the procedure under Section 138B for each statement relied upon. 7. Validity of Penalty Imposition Under Section 114A on the Importer: The penalty under Section 114A on the importer was remanded for reconsideration following the procedure under Section 138B. 8. Validity of Penalty Imposition Under Section 112(a) on the CB: The penalty on the CB for failing to fulfill obligations under CBLR 2013 cannot be imposed under Section 112. The penalty was set aside as CBLR 2013 has its own provisions for penalties. 9. Violation of Principles of Natural Justice: The appellants argued that they were not given an opportunity to be heard. The matter was remanded to ensure compliance with principles of natural justice and to follow the procedure under Section 138B. Conclusion: - Penalty on the CB under Section 112 was set aside. - Demand of duty under Section 28(4) for goods not cleared for home consumption was set aside. - Demand of duty under Section 28(4) for goods seized from the shop was set aside. - Confiscation and penalties on the importer were remanded for reconsideration following Section 138B procedures. Disposition: The appeals were disposed of with specific directions for remand and setting aside certain penalties and demands.
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