CESTAT: 'Proper Officer' evaluated Bill of Entry to issue Notice
While quashing the customs proceedings, the Allahabad bench of the CESTAT ruled that the "Proper Officer" who assessed
CESTAT: 'Proper Officer' evaluated Bill of Entry to issue Notice
While quashing the customs proceedings, the Allahabad bench of the CESTAT ruled that the "Proper Officer" who assessed the Bill of Entry had the authority to issue a show-cause notice under section 28 of the Customs Act, 1961.
Appellants Jhoola Refineries Limited involved in import have challenged a decision that confiscated crude palmolein oil under Section 111(o) imposed a redemption fine under Section 125 of the Customs Act, demanded duty under Section 28 along with interest under Section 28AB and imposed penalties.
According to the appellants, their Bills of Entry were assessed by Customs officers based upon the exemption notification as claimed. As a result of investigations conducted by the Directorate of Revenue Intelligence 4, the officers concluded that Jhoola was not entitled to the exemption.
The technical member, Mr. P V Subba Rao and the judicial member, Ms. Rachna Gupta, observed that if the SCN itself was issued by an officer competent to issue it. This results in a vitiated SCN, as well as any order deciding proposals within such an SCN.
"Hon'ble Supreme Court of India ruled that DRI officers were not proper officers for issuing an SCN requesting duty under Section 28 in the Canon India. The SCN itself was issued without lawful authority, thus invalidating the entire proceeding. A ratio similar to that of Canon India was followed in several cases and several demands were dismissed by the Supreme Court, several High Courts and this Tribunal on the ground that the SCN was issued under Section 28 by the officers of DRI," the Tribunal stated.
By annulling the impugned order, the Tribunal held that "Undisputedly, it is clear that the bills of entry in this case were not assessed by officers of the DRI, but by officers of the Custom House. If, after assessment, a duty escaped assessment, only the officer who originally assessed the Bills of Entry or his successor in office was "the proper officer* who could have issued the SCN. As the SCN was issued by a DRI officer who is not qualified to issue such a document, the impugned order determining such a document cannot be sustained and should be left behind.