9911796707
TMI Blog2024 (11) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... ous by its absence from the text of Section 28 is any reference to Section 17 or to assessment under the said provision. Keeping in mind the above statutory context, it is relevant to consider the judgments relied upon by the petitioner. In ITC [ 2019 (9) TMI 802 - SUPREME COURT] the question that arose for consideration was whether the refund application could be entertained in the absence of a challenge to the order of assessment. In that context, the Hon'ble Supreme Court examined Sections 17, 27 and 28. Upon consideration of the language of Sections 17 and 28 and the judgments relied upon by the contesting parties, conclude that the power under Section 28 is a power to determine duty and interest. Such power is not subject to or conditional upon the assessment being reopened or set aside. Consequently, it cannot be concluded that the respondent does not have the jurisdiction to invoke Section 28 either on account of not having verified the self-assessment in terms of Section 17 of the Customs Act or not appealing against such self-assessment. Respondent jurisdiction to invoke the enlarged period of limitation under sub-section (4) of Section 28 - contention of the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's allegations cannot be determined. Such detailed consideration is inappropriate at this juncture for multiple reasons. Hence, at this preliminary stage, in the factual matrix outlined above, especially in exercise of discretionary and summary jurisdiction, it cannot be concluded that the respondent invoked subsection (4) of Section 28 without jurisdiction. In this regard, it should also be noticed and recognized that it appears prima facie that the notice was issued within the period of five years specified therein. The upshot of this discussion is that the petitioner has failed to make out a case to interfere with the show cause notice. Since the hearing pursuant to the impugned show cause notice was deferred in view of this case, it is, however, just and appropriate that the petitioner be granted time to respond to the show cause notice. For reasons aforesaid, W.P. is disposed of by refusing to interfere with the show cause notice but by permitting the petitioner to respond thereto within one month from the date of receipt of a copy of this order. Upon receipt of such reply, it will be open to the respondent to proceed with the matter in accordance with law. Consequently, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suant to summons dated 24.02.2022, Shri Vivek Kumar, Head of Data Solutions and Planning of Bharti Airtel Ltd., the petitioner's customer, appeared and provided a statement. Thereafter, the impugned show cause notice was issued to the petitioner on 10.11.2023. The said notice states that the petitioner had misclassified the goods whereas the same should have been classified under CTH 85176100 or 85176290, as the case may be. The petitioner was also called upon to show cause as to why it is not liable to pay basic customs duty at 10% till 11.10.2018 and at 20% thereafter. Such notice was issued by invoking the enlarged period of limitation under sub-section (4) of Section 28 of the Customs Act. By letter dated 08.12.2023, the petitioner informed the respondent that it requires eight weeks' time to respond to the notice since it was consulting its legal experts and consultants. The present writ petition was filed in the above facts and circumstances. Counsel and their contentions 5. Oral arguments on behalf of the petitioner were advanced by Mr.Vijay Narayan, learned senior counsel, and by Mr.Tarun Gulati, learned senior counsel. Arguments on behalf of the respondent were adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicating authority passed any decision or order. Pursuant thereto, he submitted that the above mentioned officers may direct any subordinate officer of the customs to appeal against the decision or order before the Commissioner (Appeals). He contended that recourse was not taken, in this case, either to sub-section (1) of Section 128 or sub-section (2) of Section 129D. 9. Consequently, learned senior counsel submitted that the impugned show cause notice is liable to be interfered with because the respondent is endeavouring to reopen assessments, which became final on account of the proper officer not undertaking assessments under Section 17 or, in the alternative, filing an appeal either under sub-section (1) of Section 128 or under sub-section (2) of Section 129D. In support of these contentions, learned senior counsel referred to and relied upon the following judgments: (i) ITC Ltd. v. CCE, 2019 (368) ELT 216 (SC) (ITC), p articularly paragraphs 29 to 31 and 41 to 43. (ii) Escorts Ltd. v. Union of India, 1998 (97) ELR 211 (SC)(Escorts), particularly paragraph 6 thereof. (iii) CCE v. Flock (India) Pvt. Ltd, 2000 (120) ELT 285 (SC) (Flock) , particularly paragraphs 8 to 10 the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pertaining to multiple products, which were classified under different customs tariff headings, such as 85176100 and 85177090. He next submitted that the importer had earlier imported the same goods under a different CTH and changed the classification once the exemption in respect of the earlier classification was withdrawn. In order to substantiate this contention, he relied upon paragraph 10.17 of the show cause notice. With further reference to such show cause notice, he contended that allegations of wilful suppression and wilful misstatement are contained in multiple paragraphs thereof. He further submitted that it is entirely open to the customs authorities to invoke sub-section (4) of Section 28 read with Section 110 AA even after the assessment. 13. In support of his contentions, he relied upon the following judgments: (i) Priya Blue Industries Ltd. v. Commissioner of Customs, AIR 2004 SC 5115 (Priya Blue) , especially paragraph 6 thereof, for the proposition that review of assessment is permissible under Section 28. (ii) Union of India v. Jain Shudh Vanaspati Ltd, (1996) 10 SCC 520 (Jain Shudh Vanaspati), especially paragraphs 4 and 7 thereof, regarding the implications of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t distinguished the judgment in Jain Shudh Vanaspati and explained the scope of Asian Paints . By relying on the judgment in Jayaraj International v. Union of India, 2019 (370) ELT 118 (Punjab and Haryana) , especially paragraphs 15 and 16 thereof, he pointed out that the judgment of the Hon'ble Supreme Court in ITC was relied on therein. Discussion, analysis and conclusion: 17. At the outset, it should be borne in mind that the challenge is to a show cause notice. Except under exceptional circumstances, the writ court does not entertain a challenge to a show cause notice. One of the exceptions is if the show cause notice was issued without jurisdiction. Both the learned senior counsel for the petitioner contended that the respondent does not have the jurisdiction to issue a show cause notice in respect of goods that were previously assessed unless such order of assessment is challenged successfully in appeal. Therefore, the said contention warrants close scrutiny. 18. Since the above contention was raised by relying on Section 17 of the Customs Act, the said provision is set out below: 17. Assessment of duty (1) An importer entering any imported goods under section 46, or an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er person to produce any documents or provide information in relation to such verification. As per sub-section (4), the proper officer is empowered to re-assess the duty, if it is concluded on verification that the self-assessment was not done correctly. The right to re-assess is qualified in sub-section (5) by providing that a speaking order of re-assessment should be issued within 15 days from the date of re-assessment. Thus, it is clear that the proper officer is empowered to undertake verification in respect of goods imported by self-assessment and to re-assess the duty leviable on such goods. The question that arises is whether the failure of the proper officer to undertake such verification, and, consequential re-assessment, would denude the customs authorities of the right to initiate proceedings under Section 28. This entails an examination of Section 28. 20. Sub-sections 1 to 4 of Section 28 are set out below: 28. Recovery of [duties not levied or not paid or short-levied or short-paid] or erroneously refunded (1) When any [duty has not been levied or not paid or has been short-levied or short paid] or erroneously refunded, or any interest payable has not been paid, part p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such amount which falls short of the amount actually payable in the manner specified under that sub-section and the period of [two years shall be computed from the date of receipt of information under sub-section(2). (4) Where any duty has not been [levied or not paid or has been short-levied or short-paid] or erroneously refunded, or interest payable has not been paid, part-paid or erroneously refunded, by reason of,- (a) collusion; or (b) any wilful mis-statement; or (c) suppression of facts, by the importer or the exporter or the agent or employee of the importer or exporter, the proper officer shall, within five years from the relevant date, serve notice on the person chargeable with duty or interest which has not been [so levied or not paid] or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in th notice. 21. From the plain language of sub-section (1) of Section 28, it appears that proceedings may be initiated under any of the following circumstances: (i) Where any duty has not been levied (ii) Where any duty has not been paid (iii) Where any duty has been short ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin one year from the date of notice, if such notice was issued under sub-section (4). 23. Since sub-sections (8) and (9) of Section 28 are also relevant for the purposes of this case, the said subsections are set out below: (8) The proper officer shall, after allowing the concerned person an opportunity of being heard and after considering the representation, if any, made by such person, determine the amount of duty or interest due from such person not being in excess of the amount specified in the notice. (9) The proper officer shall determine the amount of duty or interest under sub-section(8),- (a) within six months from the date of notice, in respect of case falling under clause (a) of sub-section (1); (b) within one year from the date of notice, in respect of cases falling under sub-section(4): PROVIDED that where the proper officer fails to so determine within the specified period, any officer senior in rank to the proper officer may, having regard to the circumstances under which the proper officer was prevented from determining the amount of duty or interest under sub-section (8), extend the period specified in clause (a) to a further period of six months and he period spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of Thirty days] [(1A) The Commissioner (Appeals) may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing. Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.] (2) Every appeal under this section shall be in such form and shall be verified in such manner as may be specified rules made in this behalf. 43. As the order of self-assessment is nonetheless an assessment order passed under the Act, obviously it would be appealable by any person aggrieved thereby. The expression 'Any person' is of wider amplitude. The revenue, as well as assessee, can also prefer an appeal aggrieved by an order of assessment. It is not only the order of re- assessment which is appealable but the provisions of Section 128 make appealable any decision or order under the Act including that of self-assessment. The order of self-assessment is an order of assessment as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be considered harmoniously by citing with approval the judgment of the CEGAT in Asian Paints . The Division Bench further concluded that Section 11A cannot be invoked in respect of an alleged erroneous refund in a case where the application for refund was allowed under Section 11B. Thus, none of these judgments lay down the proposition that Section 28 cannot be invoked without reopening the self-assessment under Section 17 or by way of appeal. 28. Learned senior standing counsel for the respondent relied on Priya Blue, particularly paragraph 6 thereof, with regard to the power under Section 28. In paragraph 6, the Hon'ble Supreme Court concluded that an order of assessment could be reviewed under Section 28 of the Customs Act. He also relied on the judgment of the Hon'ble Supreme Court in Jain Shudh Vanaspati. In paragraph 7 of the said judgment, the Hon'ble Supreme Court concluded that the power under Section 28 can be invoked only subsequent to the clearance of goods under Section 47 and that the High Court had erred in concluding that a show cause notice could not be issued under Section 28 unless the order under Section 47 had been first revised under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f that the goods are classifiable under the CTH specified by the petitioner or whether the petitioner resorted to misclassification so as to unjustly enjoy the benefit of exemption. 32. The show cause notice is detailed and deals extensively with the nature of goods imported by the petitioner, and the self-classification thereof in the relevant bills of entry. Mr.Tarun Gulati contended that the show cause notice is replete with inferences of fact and that such inferences cannot be the basis for invoking jurisdiction under sub-section (4) of Section 28 on the ground of wilful misstatement or suppression of facts. The said contention is not entirely devoid of merit inasmuch as a finding of wilful misstatement cannot be recorded without some basis to hold that the petitioner's statements, as opposed to the inferences therefrom, were made with knowledge of falsity. It bears repetition, however, that the matter is at the show cause notice stage and only allegations have been made as on date. 33. On examining the show cause notice, it is apparent that such allegations of wilful misstatement and suppression of facts have been made in several paragraphs. In order to interfere at this s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
