9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (11) TMI 622 - AT - CustomsJurisdiction - power of ADG, DRI toissue SCN - proper officer to issue SCN or not - Section 28(4) of Customs Act - demand of duty on the current shipping Bill confirmed in the impugned order based on the SCN issued by the DRI sustainable or not - confiscation of goods in the current shipping bill - imposition of fines - penalties with respect to past shipping bills based on the SCN issued by the DRI sustainable or not? Assessment and preventive functions of the customs Department - HELD THAT - Any tax department, including Customs has two broad functions- the first is to assess the tax/duty paid where someone has filed a return or, in case of Customs, filed a Bill of Entry for import or a Shipping Bill for export which is the assessment function. It is a quasi-judicial function and assessment orders can be appealed against - A panchnama drawn during the investigation, for instance, is not an appealable document. If the investigations lead to discovery of evasion of duty or prohibitions and an SCN is issued, thereafter, it moves to the realm of quasi-judicial functions. Assessment of duty and processing of export goods - HELD THAT - The process of making an entry under section 50 and self assessment of duty under section 17(1) happen simultaneously because the data required for assessing duty such as the nature of the goods, their classification under the Customs Tariff, rate of duty, exemption notification, quantity and value are in the Shipping Bill and once these data is fed into the Customs EDI system both self assessment of duty under Section 17(1) and filing of Shipping Bill under Section 50 are complete and the arithmetical process of calculating the duty is done by the system itself - the process of permitting clearance of export goods under Section 51 is commonly referred to as issuing of Let Export Order LEO . The proper officer who issues the LEO is different from the assessing officer and is usually posted in the Customs shed where he checks the documents and if required goods and issues the LEO. Assessments can also be appealed against by the Revenue. However, if duty is not levied, not paid, short levied, short paid or erroneously refunded, an SCN can be issued under section 28 by the proper officer demanding the duty - assessment is a quasi-judicial function and the assessed Bill of Entry/Shipping Bill is an appealable order. Once the assessment is completed, it cannot be modified to grant refund under section 27; it has to be appealed against first. However, a special power to review, reopen and reassess has been provided to the proper officer, i.e., the officer who has done the assessment in the first place or his successor in office under Section 28. Officers of DRI have been held to be NOT the proper officers to issue a notice under Section 28 both in Sayed Ali and in Canon India. In the Customs Act, the Shipping Bill has to be filed with the proper officer under Section 50 which can be re-assessed under Section 17 by the proper officer and finally the clearance of goods under Section 51 is also to be given by the proper officer . Current shipping bill - HELD THAT - With respect to the current shipping bill, it was assessed provisionally after provisional release of the goods. However, the finalization of the Shipping Bill by reclassifying the goods in the impugned order is not proposed in the SCN and the order has gone beyond the scope of the SCN and hence it needs to be set aside. Consequently, the confiscation of the goods and imposition of penalties based on such finalization of assessment must fail - As far as the past consignments are concerned, the SCN was issued by ADG, DRI under section 28 and he is not the proper officer to issue such as notice as per Canon India and hence the impugned order confirming such a demand needs to be set aside. The confiscation of goods and imposition of penalties, require a notice under Section 124 to be issued which need not be issued by the proper officer . Hence, it was within DRI s power to issue such an SCN. However, the basis for imposition of penalty is the confiscation of the goods under Section 113 on the ground that there were mis-declarations in the Shipping Bills which resulted from a determination under section 28 on the notice issued by DRI. As the goods were not available, the learned Commissioner has not ordered confiscation of the past goods - Penalties also cannot sustain once the reassessment of the exported goods under section 28 which forms the basis for the penalties fails. The demand of duty confirmed on the current shipping Bill confirmed in the impugned order is not sustainable as it was not proposed in the SCN and hence is beyond its scope - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Sustainability of the demand of duty on the current shipping bill based on the SCN issued by the DRI. 2. Sustainability of the confiscation of goods in the current shipping bill and imposition of fines. 3. Sustainability of the demand of duty on past shipping bills based on the SCN issued by the DRI. 4. Sustainability of the penalties imposed with respect to past shipping bills based on the SCN issued by the DRI. Detailed Analysis: 1. Sustainability of the demand of duty on the current shipping bill based on the SCN issued by the DRI: The judgment scrutinizes whether the demand of duty confirmed in the impugned order, based on the SCN issued by the DRI, is sustainable. It is highlighted that the SCN was issued without jurisdiction since ADG, DRI is not ‘the proper officer’ to issue an SCN demanding duty under Section 28(4) as affirmed by the Supreme Court in Cannon India Ltd. vs. Commissioner of Customs. The court concluded that the demand of duty on the current shipping bill confirmed in the impugned order is not sustainable as it was not proposed in the SCN and hence is beyond its scope. 2. Sustainability of the confiscation of goods in the current shipping bill and imposition of fines: The confiscation of goods and the imposition of fines were based on the reclassification of goods under Customs Tariff Heading 2610090, which was not proposed in the SCN. Consequently, the court determined that the confiscation of goods in the current shipping bill and the imposition of fines in the impugned order must be set aside. 3. Sustainability of the demand of duty on past shipping bills based on the SCN issued by the DRI: The SCN for past consignments was issued by ADG, DRI under Section 28, who is not the proper officer to issue such a notice as per the ruling in Cannon India. Therefore, the impugned order confirming the demand of duty on past shipping bills is not sustainable and must be set aside. 4. Sustainability of the penalties imposed with respect to past shipping bills based on the SCN issued by the DRI: The penalties imposed were based on the confiscation of goods under Section 113 due to mis-declarations in the Shipping Bills, which resulted from determinations under Section 28 by DRI. Since the reassessment of the exported goods under Section 28, which forms the basis for the penalties, fails, the penalties imposed in the impugned order with respect to past shipping bills also need to be set aside. Conclusion: The court set aside the impugned order and allowed the appeals with consequential relief to the appellants, emphasizing that the SCN issued by DRI was without jurisdiction and the subsequent actions based on it were unsustainable.
|
