2022 (10) TMI 749 - AT - Customs

Adjudication of SCN - Deemed conclusion of proceedings on deposit of duty with interest and penalty - whether the proceedings would have been concluded and as to whether the Adjudicating Authority have been right while not concluding the proceedings in that scenario? - sub-section (2) of Section 28 of the Customs Act, 1962. HELD THAT - On perusal of sub-section (2) of Section 28 of the Customs Act, 1962 makes it clear that the same is a beneficial provision of legislation with an intention to reduce the litigation proceedings where the assessee satisfies the condition of the said Section. The language makes it clear that the provisions provide for deemed conclusion of the proceedings against the assessees if the payment as regard the duty, interest and penalty thereof stands made by the assessee. It is further seen that the provision is applicable even in the cases of demand having been arisen on account of collusion, wilful mis-statement or suppression, if the same stands accepted by him and the respective duty along with interest and the required penalty stands paid. Now coming to the fact of the present case, it is admitted facts in present matter that the appellant herein has made the duty payment alongwith interest and penalty. The said acknowledgment is very much recorded in the impugned order itself. In the given circumstances, it is opined that the Adjudicating Authority has committed error for not concluding the proceedings in present matter. The impugned order under challenge is set aside by extending the benefit of deemed conclusion of the proceedings in view of Section 28 of the Customs Act to the appellants herein for the reason that they have complied with the conditions mentioned in the provision - appeal allowed.

Summary

Issues:
Classification of imported goods under Customs Tariff Headings, Confiscation of goods, Differential customs duty, Imposition of penalties, Deemed conclusion of proceedings under Section 28 of the Customs Act.

Classification of Imported Goods:
The appellant, engaged in manufacturing off-road tires, imported Shell Flavex Oil and classified it under Customs Tariff Heading 38122090. The authorities alleged misdeclaration, proposing reclassification under CTH 2707 with higher duty rates. Show cause notices were issued for reclassification, demanding differential duty and proposing confiscation and penalties under the Customs Act.

Confiscation of Goods and Penalties:
The Adjudicating authority ordered reclassification of the goods, confiscation of seized oil, confirmed differential duty, and imposed penalties under Sections 112(a) and 114A of the Customs Act. Redemption fine was imposed in lieu of confiscation. The authority also enforced the bond and bank guarantee for recovery of dues.

Deemed Conclusion of Proceedings under Section 28:
The appellant contended that they were eligible for deemed conclusion under Section 28(2) as duty, interest, and penalties were paid before the show cause notices. The appellant argued that the Adjudicating authority erred in not concluding the proceedings. The Tribunal agreed, citing the legislative intent to reduce litigation, and held that the appellant's compliance entitled them to deemed conclusion of proceedings.

Legal Interpretations and Precedents:
The Tribunal analyzed Section 28 of the Customs Act, emphasizing the provision's beneficial nature for assessees who fulfill payment obligations. It noted that the appellant's compliance with duty payment, interest, and penalties warranted deemed conclusion. The Tribunal rejected the Department's reliance on a circular, stating that circulars cannot override legislative provisions. Legal principles were cited to support the interpretation of statutes in a manner that upholds legislative intent.

Judgment:
The Tribunal set aside the impugned order, allowing the appeals and granting the appellants the benefit of deemed conclusion under Section 28 of the Customs Act. The Tribunal concluded that the appellant's compliance with payment conditions entitled them to the deemed conclusion of proceedings. The decision was pronounced on 18.10.2022.