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Canon India Private Limited Vs. Commissioner of Customs - (Supreme Court) (09 Mar 2021)

An officer, who has passed original order of assessment, could only undertake re-assessment under Section 28 (4) of Customs Act



Present batch of statutory appeals under Section 130E of the Customs Act, 1962 arises from a common final order of the Central Excise and Service Tax Appellate Tribunal ('CESTAT'). Vide the impugned order, an exemption of basic customs duty accorded to the Digital Still Image Video Cameras ('DSIC') imported by the Nikon India Pvt. Ltd., Canon India Pvt. Ltd., Sony India Pvt. Ltd. and Samsung India Electronics Pvt. Ltd. (Appellants' or 'importers'), in terms of exemption Notification No. 20/2005 dated 1st March, 2005 (as amended by Notification No. 15/2012 dated 17th March, 2012) came to be denied and the consequential confiscation of goods, demand of interest and imposition of penalty as provided for under various Sections of the Customs Act, 1962, was upheld by the CESTAT.

The main issue is whether after clearance of the cameras on the basis that they were exempted from levy of basic Customs duty under Notification No. 15/2012, the proceedings initiated by the Directorate of Revenue Intelligence for recovery of duty not paid under Section 28(4) of the Customs Act, 1962 are valid in law.

The nature of the power to recover the duty, not paid or short paid after the goods have been assessed and cleared for import, is broadly a power to review the earlier decision of assessment. Such a power is not inherent in any authority. Indeed, it has been conferred by Section 28 of Customs Act and other related provisions. The power has been so conferred specifically on "the proper officer" which must necessarily mean the proper officer who, in the first instance, assessed and cleared the goods i.e. the Deputy Commissioner Appraisal Group.

Where the statute confers the same power to perform an act on different officers, as in present case, the two officers, especially when they belong to different departments, cannot exercise their powers in the same case. Where one officer has exercised his powers of assessment, the power to order re-assessment must also be exercised by the same officer or his successor and not by another officer of another department though he is designated to be an officer of the same rank.

It is well known that, when a statute directs that the things be done in a certain way, it must be done in that way alone. As in present case, when the statute directs that "the proper officer" can determine duty not levied/not paid, it does not mean any proper officer but that proper officer alone. Present Court find it completely impermissible to allow an officer, who has not passed the original order of assessment, to re-open the assessment on the grounds that, the duty was not paid/not levied, by the original officer who had decided to clear the goods and who was competent and authorised to make the assessment. The nature of the power conferred by Section 28(4) of Customs Act to recover duties which have escaped assessment is in the nature of an administrative review of an act. The Section must therefore be construed as conferring the power of such review on the same officer or his successor or any other officer who has been assigned the function of assessment. An officer, who did the assessment, could only undertake re-assessment.

The re-assessment and recovery of duties i.e. contemplated by Section 28(4) of Customs Act is by the same authority and not by any superior authority such as Appellate or Revisional Authority. It is, therefore, clear that, the Additional Director General of DRI was not "the" proper officer to exercise the power under Section 28(4) and the initiation of the recovery proceedings in the present case is without any jurisdiction and liable to be set aside. 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 are invalid without any authority of law and liable to be set-aside and the ensuing demands are also set-aside. The common order passed by the CESTAT is set aside. Consequently, the impugned demand notices issued against all the three Appellants are also set aside. Appeals allowed.


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