AI Structured Summary
Not yet generated for this judgment
Judgment
The appellants have imported sun glasses, reading glasses, frames etc. in five containers; filed Bills of Entry and shifted the goods to an unit in free trade warehousing zone in Chennai. On conduct of investigation, the department found that there was misdeclaration of quantity in the impugned consignments. On conclusion of investigations, a show cause notice dated 29.07.2020 was issued proposing confiscation of goods, revision of value of declared and imposing penalties. The appellants, availing the provisions of Section 28 (5) of Customs Act, 1962, have paid the differential duty, interest and penalty of 15% on 28.08.2020 and requested the department to conclude the matter in terms of Section 28 (6) of Customs Act, 1962. The appellant submits that this being the situation, the department has issued two corrigenda to the show cause notice and the impugned order was issued.
Learned Counsel for the appellant submits that SIIB vide communication dated 11.09.2020 informed the Additional Commissioner of Customs that in view of the payments made by the appellant proceedings are deemed to be conclusive in terms of Section 28 (6) of Customs Act, 1962 and that instruction was issued with the approval of Principal Commissioner of Customs. Learned Counsel for the appellants further submits that subsequent order issued is in violation of Section 28 of Customs Act and without jurisdiction as being contrary to the instructions issued. He relies upon the following decisions:
(i) Amit Sirohi Vs Directorate of Revenue Intelligence, New Delhi - 2016 (336) ELT 201 (Del.)
(ii) Siddhi Vinayak Enterprises Vs UOI - 2017 (354) ELT 501 (Bom.)
He further submits that even if the differential duty is held to be recoverable action can only be initiated in terms of Section 28 (6); there is no proposal for levy of penalty of Section 114A in the SCN whereas the order imposed same beyond the scope of the SCN; even on merits also, there is no evidence to prove that the appellants have colluded with the overseas suppliers and misrepresented the facts, if any, with an intent to evade payment of duty, so as to attract penalty under Section 114A of Customs Act,1962.
Learned Authorised Representative for the department relies upon the findings of the OIO.
Heard both sides and perused the records of the case. We find that in the instant case a show cause notice was issued on 29.07.2020. The office of the Commissioner of Customs, Chennai III have vide letter dt.11.09.2020 informed the Additional Commissioner of Customs of Chennai VII Commissionerate that duty with interest and penalty has been paid in full within 30 days of the receipt of the demand cum show cause notice;the proceedings are deemed to be conclusive in respect of the matters stated therein under Section 28 (6) of the Customs Act, 1962; and that necessary order in this regard be issued. We find that payment of differential duty penalty and interest has been made on 28.08.2020 within one month of the issue of the show cause notice and the adjudicating authority was duly informed that corrigenda dt.28.09.2020 and 01.10.2020 have been issued much after the provisions of Section 28 have been complied with.
For better appreciation, the relevant sub-sections of Section 28 of the Customs Act are reproduced below:
"SECTION 28.Recovery ofduties not levied or not paid or short-levied or short-paid or erroneously refunded.
... ... ....
(5) Where any duty has not been levied or not paid or has been short-levied or short-paid or the interest has not been charged or has been part-paid or the duty or interest has been erroneously refunded by reason of collusion or any wilfulmis -statement or suppression of facts by the importer or the exporter or the agent or the employee of the importer or the exporter, to whom a notice has been served under sub-section (4) by the proper officer, such person may pay the duty in full or in part, as may be accepted by him, and the interest payable thereon under section 28AA and the penalty equal to fifteen per cent of the duty specified in the notice or the duty so accepted by that person, within thirty days of the receipt of the notice and inform the proper officer of such payment in writing.
(6) Where the importer or the exporter or the agent or the employee of the importer or the exporter, as the case may be, has paid duty with interest and penalty under sub -section (5), the proper officer shall determine the amount of duty or interest and on determination, if the proper officer is of the opinion -
(i) that the duty with interest and penalty has been paid in full, then, the proceedings in respect of such person or other persons to whom the notice is served under sub-section (1) or sub-section (4), shall, without prejudice to the provisions of sections 135, 135A and 140 be deemed to be conclusive as to the matters stated therein; or
(ii) that the duty with interest and penalty that has been paid falls short of the amount actually payable, then, the proper officer shall proceed to issue the notice as provided for in clause (a) of sub-section (1) in respect of 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 (5)."
A reading of the above provisions indicates that once the duty, penalty etc. has been paid under the provisions of sub-section (5), the only imminent action to be contemplated is in terms of sub-section (6) of Section 28 of the Act ibid as per which the issue attains finality. On-going through the records of the case, we find that provisions of Section 28 (5) have been fully complied and have been endorsed by the authority who has investigated the case and issued the show cause notice. Under these circumstances, revision of show cause by way of Corrigenda, aftersuch compliance and subsequent adjudication of the case is not permissible. It defeats the very purpose of the provisions of Sections 28(5) and Section 28(6) of the Customs Act, 1962. It amounts to breach of Trust and defeats the very purpose of the provisions of Sections 28(5) and Section 28(6) of the Customs Act, 1962, which understandably, is to reduce the litigation. We find that corrigenda to SCN were issued much after such compliance; issued without challenging the letter written by SIIB informing the closure of the case. Secondly, the corrigenda seek to enhance the value by a small amount. As can be seen the letter was issued after due approval of Principal Commissioner of Customs. The case cannot be adjudicated by another commissioner without the said letter is set aside following due process of Law. It is a settled principle of law that a corrigendum cannot be issued altering the issues causing undue disadvantage to the Noticee. We find that corrigenda to the SCN were issued well after the compliance contemplated in sub-section (5) of Section 28 of the Customs Act, 1962 has been made and accepted. No reasons whatsoever have been discussed in the OIO as to why the compliance under sub-section (5) of Section 28 was not accepted and as to why the proceedings were not treated as final in terms of sub-section (6) of Section 28.Therefore, the corrigenda issued and the OIO are to be held to have been issued without jurisdiction and without authority of law.
Moreover, we find that penalty was imposed under Section 114A, even though the same was not proposed in the Show Cause Notice. Therefore, we find that the impugned order suffers from legal infirmities and such an order cannot be upheld. We find that in this case, the appellants having adhered to the provisions of Section 28 of the Customs Act, 1962 have rightful claim as per the provisions of Section 28(6) ibid. The issue need to be deemed to have been finalised. Therefore, impugned order is liable to be set aside.
Accordingly, we set aside the impugned order and allow the appeal with consequential relief, if any, as per law.
(Pronounced in court on 23.09.2021)