2018 (8) TMI 1305 - AT - Customs

Whether when the appellant has paid the entire duty amount alongwith the interest and the penalties the proceedings would have been concluded and as to whether the Adjudicating Authorities below have been right while not concluding the proceedings in that scenario? Held that - Section 28 (1) (A) of the Customs Act 1962 makes it clear that the same is a beneficial piece of legislation with an intention to reduce the litigation proceedings where the assesse satisfies the condition of the said Section. The language makes it clear that the provisions provide for deemed conclusion of the proceedings against the assesses if the payment as regard the duty interest and 15% penalty thereof stands made by the assesse within a period of 30 days of the receipt of Show Cause Notice. 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 i.e. even in respect of illegal activity of the assesse if the same stands accepted by him and the respective duty alongwith proportionate interest and the required penalty stands paid. In the present case the appellant herein has made the payment against the impugned bill of entry dated 29.09.2015 even prior the issuance of Show Cause Notice i.e. on 01.09.2015 itself with subsequent payment towards the penalty and interest on 07.01.2016 and 18.02.2016 respectively. The requisite TR-6/GAR-7 Challans are attached with the Appeal papers. As per the above provision the appellant had the time to make the deposit till 08.03.2016 but the payment stands made by 18.02.2016. No doubt Sections 28(5) and 28(6) are applicable without prejudice to the provisions of Sections 135 135A and 140 of the Customs Act but perusal of Show Cause Notice makes it clear that none of these provisions have been invoked at the time of issuing Show Cause Notice. It has already been observed that in fact the Show Cause Notice in the present case was not required to be issued - The present is opined to be a clear case of presumed and assumed interpretation of Section 28(5) and 28(6) by the Adjudicating Authorities below. The Commissioner(Appeals) is held to have committed an error while giving more emphasis to a clarificatory Circular than to the settled provision of the statute. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Interpretation of Section 28 of the Customs Act, 1962 regarding deemed conclusion of proceedings.
2. Application of Circular No. 11/2016 in cases of confiscation.
3. Compliance with procedural requirements for concluding proceedings.

Issue 1: Interpretation of Section 28 of the Customs Act, 1962 regarding deemed conclusion of proceedings:

The judgment revolves around the interpretation of Section 28 of the Customs Act, specifically focusing on the deemed conclusion of proceedings when duty, interest, and penalty are paid within the stipulated time frame. The appellant contended that the authorities erred in not concluding the proceedings despite payment before the issuance of the Show Cause Notice. The Tribunal analyzed the provisions of Section 28(5) and 28(6) which allow for deemed conclusion if the payment is made within 30 days of receiving the notice. The Tribunal emphasized that the legislative intent behind these provisions is to expedite proceedings and reduce litigation, even in cases of collusion or misstatement by the importer.

Issue 2: Application of Circular No. 11/2016 in cases of confiscation:

The Department argued that the case falls under confiscation due to misdeclaration and, therefore, is excluded from the purview of Section 28. They relied on Circular No. 11/2016 to support their position. However, the Tribunal disagreed, stating that the Circular does not supersede the statutory provisions and cannot restrict the applicability of Section 28. The Tribunal highlighted that Circulars are clarificatory and cannot override legislative intent, especially when beneficial provisions are concerned.

Issue 3: Compliance with procedural requirements for concluding proceedings:

The Tribunal scrutinized the procedural compliance in the case, noting that the appellant had made the necessary payments even before the Show Cause Notice was issued. The Tribunal found errors in the issuance of the notice and subsequent proceedings, emphasizing that the authorities failed to follow the prescribed procedure. Additionally, the Tribunal criticized the Adjudicating Authorities for misinterpreting Section 28(5) and 28(6) and giving undue weight to the Circular instead of the statutory provisions. The judgment concluded by setting aside the previous orders and granting the benefit of deemed conclusion of proceedings to the appellants.

The judgment delves into the nuances of Section 28 of the Customs Act, highlighting the importance of procedural adherence, legislative intent, and the application of beneficial provisions in customs proceedings. It clarifies the scope of Circulars in relation to statutory provisions and emphasizes the need for a strict interpretation of the law to uphold the rights of the appellants.