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TMI Blog2021 (12) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... As far as the assessment of imported consignment is concerned, it is the Deputy Commissioner or the Assistant Commissioner of Customs and Central Excise namely, the first and the second respondents and/or the Appraiser of Customs who are competent authority albeit the Proper Officer to determine the correct classification. The Hon ble Supreme Court in CANON INDIA PRIVATE LIMITED has held that, if it was intended that officers of the Directorate of Revenue Intelligence who are officers of Central Government should be entrusted with functions of the Customs officers, it was imperative that the Central Government should have done so in exercise of its power under Section 6 of the Act. The Court further observed that the reason why such a power is conferred on the Central Government is obvious and that is because the Central Government is the authority which appoints both the officers of the Directorate of Revenue Intelligence which is set up under the Notification dated 04.12.1957 issued by the Ministry of Finance and Customs officers who, till 11.5.2002, were appointed by the Central Government. The court held that the notification which purports to entrust functions to a proper offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aration by the petitioner by disguising the classification in the respective Bills of Entries under Heading 2106 of the Customs Tariff Act, 1975, a quick decision should be taken and proceed in accordance with law - A proper officer can also initiate proceeding under Section 111(d) read with Section 124 of the Customs Act, 1962 to confiscate the consignment and impose penalty under Section 112 of the Custom Act, 1962. Since the imported goods are natural products and are prone to deterioration due to exposure to elements and natural causes with efflux of time and humid inclement weather condition in Chennai and are lying at Balmer Lawrie CFS, Chennai since the end of September, 2021 the 1st and the 2nd respondents and/or such other officers vested with the powers to assess the Bills of Entries are directed to exercise their powers under the Customs Act, 1962 one way or the other - The initial exercise regarding the determination of classification may be completed within 15 days from the date of hosting of this Order in the website. In case, the proper officer is of the primafacie view that the goods are liable for confiscation, seizure order may be issued followed by confiscating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeds etc. and Arecanuts (Betelnuts) and is in the said business for over a period of more than two decades. 7. It is further submitted that the petitioner has a valid Import and Export Code No.0791011917 issued by the office of the JDGFT, Bangalore, attached to the Ministry of Commerce, Government of India. 8. That apart, it is submitted that the petitioner has also registered with the Income Tax and is a Income Tax Assessee. It is further submitted that the petitioner has also registered with the Food Safety and Standards Authority of India and holds Registration No.10012043000374. 9. Appearing on behalf of the petitioner, the Learned Senior Counsel Mr.Vijay Narayan duly instructed by Dr.S,Krishnanandh, Advocate submits that the petitioner has imported Arecanuts viz., unflavoured supari (Betelnut products) in sixteen containers from a overseas supplier in Myanmar and had filed the above three mentioned Bill of Entries for assessment and for clearing the imported consignments. 10. It is submitted that the total value of the import consignment is ₹ 4,33,90,500/-. It is submitted that originally the petitioner had self assessed the consignment and had agreed to pay customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the imports are prohibited or banned under law for the timing in force. It is submitted that no prosecution is also in contemplation against the petitioner. 18. It is submitted that none of the circumstances stipulated in Circular No.22/2004- Cus - dated 03.03.2004 for detaining and delaying clearance are attracted in the present case. On the other hand, it is submitted that a circular mandates sample to be drawn and that the imported consignment should be allowed to be cleared on provisional assessment as a matter of course. 19. The learned Senior Counsel for the Petitioner further submits that the above Circular has been issued to prevent congestion at the ports and warehouses. He further submits that the petitioner is willing to execute additional security in the form of bank guarantee to safeguard the interest of the revenue including possible fine and penalty. 20. The learned Senior Counsel for the Petitioner submitted that the intrusion by the third and the fourth respondents from Maharashtra for consignment imported through Chennai Port is both surprising and un-warranted as the third and fourth respondents have their counter parts in Chennai to investigate and in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Agarwal Metals and Alloys in Civil Appeal No.3411 of 2020 under similar circumstances was also dismissed vide order dated 31.08.2021 by the Hon'ble Supreme Court. 28. The Learned Senior Counsel also drew attention to the decision of this Court rendered in the case of Global Metro Vs. The Commissioner of Customs and others in W.P.No.12454 of 2021 on 14.07.2021, relating the import of Black Pepper from Sri Lanka. In this connection, a reference was made to Para:13 from the said order which reads asunder:- "13. The commodity in question is agricultural produce. The variety of black pepper imported is stated to be specific to the region of Srilanka, an important ingredient in the making of spices used in Indian cuisine, with a short shelf life. Assuming for the sake of argument that investigation is concluded in favour of the petitioner, if the provisional release is not granted, the entire consignments would have been compromised. The balance of convenience would thus require, in my considered view, that the consignments be released, subject to the petitioner being put to terms. This would also ensure that the interests of the Department are securely protected. The petitioner w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt indicating that these reports were stage managed to give an impression that the imported consignment do not meet the standards to satisfy Food Safety and Standards Authority of India (FASAI). The Learned Senior Counsel for the petitioner therefore prayed for allowing the writ petition. 36. The first and the second respondents have not filed their Counter. The learned counsel for the first and the second submits that the import is under investigation by the third and the fourth respondent and therefore the imported consignment cannot be cleared pending further investigation and any decision to issue SCN. 37. The third and fourth respondents have filed a detailed counter. Appearing on behalf of the third and fourth respondents, the Learned Senior Standing Counsel for the respondents, Mr.Sundareswaran submits that the petitioner has made a wrong declaration for self assessment under the provisions of the Customs Act,1962 as if the imported consignment were un-flavoured supari beetle nuts classified under heading 2106 and Sub heading 2106 90 30 of the Customs Tariff Act, 1975 when indeed the import consignment fall under Heading 0802 of the Customs Tariff Act, 1975. 38. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under CTH 2106 90 30 to overcome the prohibition under the above Notification. 46. It is submitted that the value declared in the three Bills of Entry declared is USD 1350, whereas during the period of import of Betel Nuts imported, as per Tariff Rate for Chapter amended time to time, the per metric ton of Betel Nuts stands at 5149 USD. 47. It is submitted that since the test under Food Safety and Standards Authority of India (FASAI) have confirmed that the imported consignment are not fit for human consumption, the writ petition filed for release of the import consignment may be be dismissed by allowing the 3rd and 4th respondents to complete the investigation. 48. The learned counsel for the respondent further submits that ten out of sixteen consignment have been found to be unfit for human consumption and therefore the respondents in any event are justified in detaining the imported goods. 49. The learned counsel for the respondents submits that the imported goods will be seized under Section 110 Customs Act, 1962 and appropriate notice will be issued in due course of time and the issue will have to be eventually adjudicated as to whether the petitioner was entitled to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I.R.S., Assistant Commissioner of Customs, who is present in court, submitted that before release of the goods in favour of the petitioner, the re-export of the goods as indicated in Paragraphs (i) and (ii) above, the Departmental Authorities may be permitted to take samples, to the extent of One K.G. from each of the consignment in question, the learned Counsel for the Petitioner upon instructions submitted that the Petitioner has no objection to that and therefore, subject to the aforesaid taking of the samples, the aforesaid compliances may be made by both parties immediately and report to that effect may be furnished in this Court. iv. The Adjudication Proceedings in pursuance of the impugned Show Cause notice may continue and the same shall remain subject to the final decision of the present writ appeal". 52. Heard the learned Senior counsel for the petitioner and the learned Standing Counsel for the first and second respondents and learned Senior Standing Counsel for the third respondent. 53. I have perused the decision of the Hon'ble Supreme Court in Canon India Pvt.Ltd. vs. Commissioner of Customs,2021(376) E.L.T.3 (S.C.).The said decision dealt with a situation whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdictional area was considered. The consideration made is as hereunder:- "16.It was submitted that in the instant case, the import manifest and the bill of entry were filed before the Additional Collector of Customs (Imports), Mumbai; the bill of entry was duly assessed, and the benefit of the exemption was extended, subject to execution of a bond by the importer which was duly executed undertaking the obligation of export. The learned counsel argued that the function of the preventive staff is confined to goods which are not manifested as in respect of manifested goods, where the bills of entry are to be filed, the entire function of assessment, clearance, etc. is carried out by the appraising officers functioning under the Commissioner of Customs (Imports). 17.Before adverting to the rival submissions, it would be expedient to survey the relevant provisions of the Act. Section 28 of the Act, which is relevant for our purpose, provides for issue of notice for payment of duty that has not been paid, or has been short-levied or erroneously refunded, and provides that: "28. Notice for payment of duties, interest, etc.-(1) When any duty has not been levied or has been short ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stoms is therefore, the governing test to determine whether an 'officer of customs' is the 'proper officer'. 20. From a conjoint reading of Sections 2(34) and 28 of the Act, it is manifest that only such a Customs Officer who has been assigned the specific functions of assessment and reassessment of duty in the jurisdictional area where the import concerned has been affected, by either the Board or the Commissioner of Customs, in terms of Section 2(34) of the Act is competent to issue notice under section 28 of the Act. Any other reading of Section 28 would render the provisions of Section 2(34) of the Act otiose inasmuch as the test contemplated under Section 2(34) of the Act is that of specific conferment of such functions." 23. We, therefore, hold that the entire proceeding in the present case initiated by the Additional Director General of the DRI by issuing show cause notices in all the matters before us are invalid without any authority of law and liable to be set- aside and the ensuing demands are also set-aside. Limitation 24.It is strictly not necessary to decide the question on limitation but we intend to do so since parties have elaborately relied on disclosures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there was any wilful mis-statement of facts. In these circumstances, it must, therefore, follow that the extended period of limitation of five years was not available to any authority to re-open under Section 28(4). 29. In this view of the matter, we consider it unnecessary to answer the issue whether the cameras that were cleared on the basis that they were exempted from customs duty under Exemption Notification No. 15/2012 were in fact eligible for the exemption or not. The goods must be taken to have been validly cleared by the Customs officer. 30. We might note that cameras with similar specifications have been treated as exempted under the Explanatory Note to the Combined Nomenclature of the European communities. It is important to add that the same cameras have been considered to be eligible for exemption before 17.03.2012 and after 30.04.2015 under the exemption Notifications issued under the Customs Act read with Chapter 84 & 85 (First Schedule) of Customs Tariff Act, 1975. 31. In the result, these appeals are allowed. The common order dated 19.12.2017 passed by the CESTAT, New Delhi in Customs Appeal Nos. 50098, 50099, 50100 and 50280/2017 is set aside. Conseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise or Appraiser i)Section 13 ; ii)Section 14; iii)Sub-sections (2)(3)(4) and (6)of section 17; iv) Section 19; v) Section 40; vi)Section 41; vii) Clause (b) of sub-section (2) of section 45; viii) Sub-sections (1) and (4) of section 46; ix) Section 47; x) Section 50; xi) Section 51; xii) Section 54; xiiii) Section 62; xiv) Clause (a) to (e) of Section 64; xv) Section 68; xvi) Section 69; xvii) Section 79; xviii) Section 83; xix) Section 86; xx) Section 92; and xxi) Section 93; 61. As far as the third and the fourth respondents and/or their counterparts in Chennai for Tamil Nadu are concerned, they are not "the Proper Officers" for the purpose of the assessment. Their power to issue SCN is spelt out in Sl.Nos.4 & 6 to the above notification which is reproduced below:- Sl.No. Designation of the Officers Functions under Section of the Customs Act, 1962 4 Deputy Director or Assistant Director in the Directorate General of Revenue Intelligence and Directorate General of Central Excise Intelligence. i)Section 28B; and ii) Section 72 6 Intelligence Officer in the Directorate General of Revenue Intelligence and Directorate General of Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the powers and function in terms of the Notification based on the above decision of the Hon'ble Supreme Court in Canon India Pvt.Ltd. vs. Commissioner of Customs, 2021(376) E.L.T.3 (S.C.) as this is not the occasion. 66. It should also be underlined that the officer's of DRI represents an elite wing of the investigative officers from the Revenue Department drawn from experienced senior Customs and Central Excise Officers. It is consists of Senior officers who are tasked with the duty to safeguard economic interests of the Country. 67. It will be useful to refer to the history of DRI from their own Website which extracted as under: "The Central Excise and Customs administration, which was previously deployed during the British Rule mainly for the collection of revenue, was called upon, in the wake of independence, to shoulder the responsibility of guarding the tariff wall along the country's vast coastline and land frontiers. Many handicaps such as want of trained manpower and adequate resources in the form of equipments and absence of precise intelligence made our frontiers more vulnerable to economic exploitation. Added to it was the temptation to evade taxes and control ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orruption. The Bureau could not devote its attention to anti-smuggling measures on any organized pattern until after the taking over of anticorruption work by the Vigilance wing, and the availability of its full complement of officers about a year ago. In this year, under the personal guidance of Member (Central Excise) the Bureau took up coordination of Inter-Collectorate work against smuggling and helped the Collectorates with experienced personnel in the investigation of major cases. Amongst the more important cases developed wholly or partly with the help of officers of CRIB may be mentioned those of Soirat and Webb who were caught while attempting to export ₹ 2.5 Lakhs in currency, Dana and Frey who attempted to export about ₹ 9 Lakhs in currency through Attari and the un-earthing of the smuggling racket at Jamnagar headed by Talab Haji Hussain and seizure of gold valued at at over ₹ 30 Lakhs, currency of 8 lakhs of rupees and about 25 vehicles including motor cars, auto rikshaws etc. and the current investigation into the seizure of ₹ 1.5 Crores worth of diamonds from Shri Zainal Ali Raza of Bombay.In particular, the mopping up of the smugglers on such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to such conditions (to be fulfilled before or after clearance) as may be specified in the notification, the import or export of goods of any specified description. (2) The purposes referred to in sub-section (1) are the following:- (a) the maintenance of the security of India; (b) the maintenance of public order and standards of decency or morality; © the prevention of smuggling; (d)the prevention of shortage of goods of any description; (e) the conservation of foreign exchange and the safeguarding or balance of payments; (f) the prevention of injury to the economy of the country by the uncontrolled import or export of gold or silver; (g) the prevention of surplus of any agricultural product or the product of fisheries; ( h) the maintenance of standards for the classification, grading or marketing of goods in international trade; (i)the establishment of any industry; (j)the prevention of serious injury to domestic production of goods of any description; (k)the protection of human, animal or plant life or health; (l)the protection of national treasures of artistic, historic or archaeological value; (m)the conservation of exhaustible natural resourc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (2) and by insertion of sub-section (4) vide Act 25 of 2010 with effect from 25th August 2010. Sub-section (1) of Section 3 states that the Central Government may, by an order published in the Official Gazette, make provision for the development and regulation of foreign trade by facilitating imports and increasing exports. It is a general provision which has no reference to GATT- 1994. It authorises the Central Government to publish an order in the Official Gazette for development and regulation of foreign trade, i.e., imports and ex-ports. Sub-section (2) states that the Central Government can, by an order in the Official Gazette, make a provision for prohibiting or restricting or otherwise regulating, in all or specified cases and subject to such exceptions, if any, the import or export of goods and after the amendment vide Act 25 of 2010, services or technology. Sub-section (2) to Section 3, therefore, authorises the Central Government to, by an order published in the Official Gazette, make provisions restricting the imports or exports. Imposition of quantitative restrictions on imports or exports would clearly fall within sub-section (2) to Section 3 of the FTDR A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods or, where such owner is not known, the person from whose possession or custody such goods have been seized, an option to pay in lieu of confiscation such fine as the said officer thinks fit: xxxxxxxxx" 158.A bare reading of the provision aforesaid makes it evident that a clear distinction is made between 'prohibited goods' and 'other goods'. As has rightly been pointed out, the latter part of Section 125 obligates the release of confiscated goods (i.e., other than prohibited goods) against redemption fine but, the earlier part of this provision makes no such compulsion as regards the prohibited goods; and it is left to the discretion of the Adjudicating Authority that it may give an option for payment of fine in lieu of confiscation. It is innate in this provision that if the Adjudicating Authority does not choose to give such an option, the result would be of absolute confiscation. The Adjudicating Authority in the present matters had given such an option of payment of fine in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.40/2012- Cus,(N.T.) dated 02.5.2012 to determine the classification and assessee the imported goods. 83. If the Proper Officer is of the view that the goods fall under Heading 0802 of the Customs Tariff Act, 1975 and there is a misdeclaration by the petitioner by disguising the classification in the respective Bills of Entries under Heading 2106 of the Customs Tariff Act, 1975, a quick decision should be taken and proceed in accordance with law. 84. A "proper officer" can also initiate proceeding under Section 111(d) read with Section 124 of the Customs Act, 1962 to confiscate the consignment and impose penalty under Section 112 of the Custom Act, 1962. 85. It is for the first and the second respondents or the Appraiser of Customs or the Appraiser of Customs or Superintendent of Central Excise and Customs to assess the imported consignments and come to an independent conclusion, as to whether the imported goods i.e. Areca nuts merits to be classified under Chapter 0802 or under Sub Heading 2106 of the Customs Tariff Act, 1975 or is whether the import is prohibited. 86. As far as the third and the fourth respondents are concerned, they have no jurisdiction to impede in the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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