1992 (5) TMI 109 - AT - Customs

Summary

Issues Involved:
1. Classification of imported goods.
2. Validity of service of the demand notice.
3. Limitation period under Section 28 of the Customs Act, 1962.
4. Authority of clearing agents post-clearance.

Detailed Analysis:

1. Classification of Imported Goods:
The respondents imported 1610 pieces of Latex Foam Sponge, which were initially assessed under Heading 4005.91/4605.00. The Internal Audit Department later pointed out that the goods should be classified under Heading 4008.11, resulting in a short collection of duty. Consequently, a Show Cause Notice was issued demanding additional duty.

2. Validity of Service of the Demand Notice:
The core issue revolves around whether the service of the demand notice on the clearing agent, M/s. Achuthan Pillai & Co., was valid. The respondents argued that the agent ceased to represent them after the clearance of goods on 9-4-1986, and therefore, any notice served on the agent on 9-10-1986 was not valid. The Assistant Collector initially upheld the service on the clearing agent as valid. However, the Collector (Appeals) and the Tribunal found no evidence that the agent was authorized to receive notices on behalf of the respondents after the clearance of goods.

3. Limitation Period under Section 28 of the Customs Act, 1962:
The respondents received the demand notice on 14-10-1986, beyond the six-month limitation period prescribed under Section 28 of the Act. The Collector (Appeals) set aside the Assistant Collector's order on this ground, emphasizing that the notice was received by the respondents after the statutory time limit. The Tribunal upheld this view, noting the absence of evidence that the clearing agent was authorized to receive the notice within the limitation period.

4. Authority of Clearing Agents Post-Clearance:
The Tribunal examined whether M/s. Achuthan Pillai & Co. continued to act as agents for the respondents post-clearance. The Tribunal found no evidence supporting the continued authority of the clearing agent to receive notices on behalf of the respondents. The Tribunal referred to multiple case laws, including the Calcutta High Court's decision in D. Sengupta v. Collector of Customs, which held that a clearing agent ceases to be an agent after the goods are cleared.

Conclusion:
The Tribunal upheld the Collector (Appeals)'s decision, concluding that:
- The demand notice was received by the respondents after the statutory time limit.
- There was no evidence that the clearing agent was authorized to receive the notice on behalf of the respondents post-clearance.
- The service of the notice on the clearing agent was not valid for the purpose of Section 28 of the Customs Act.

The appeal by the Revenue was rejected for lack of merit.