The present appeal has been filed by Commissioner of Customs, Kandla (Appellant) against the Order in Customs Appeal No. 11756 of 2019 dated February 13, 2020 by the Hon’ble CESTAT, Ahmedabad which held that demands confirmed by the Appellant, confiscation of goods and penalties imposed upon M/S Agarwal Metals and Alloys (Respondent) was not sustainable.
The issue pertains to an investigation which was initiated by the Directorate of Revenue Intelligence (“DRI”) against various firms on the information that they were indulging in undervaluation of “Aluminium Scrap”. The Respondent filed an appeal in the Hon’ble CESTAT against the Order in Original [“OIO”] [OIO No. KND/Custom/000/Com/19/18-19] dated March 26, 2019 [“OIO”] passed by the Commissioner of Customs, Kandla (“the Appellant”) which accepted the Respondent’s contention that import prices declared by it are comparable and noted that adoption of insurance value for alleging under-valuation in the OIO as improper. The Hon’ble CESTAT set aside the impugned order and allowed all the appeals with consequential reliefs to the Respondents.
Aggrieved by which, the Respondent has filed the current petition before the Hon’ble Supreme Court of India.
The Hon’ble Supreme Court of India has relied on the judgment in the case of M/S Canon India Private Limited v. Commissioner of Customs [Civil Appeal No. 1827 of 2018 dated March 09, 2021] to restate that the Additional Director General (“ADG”) of DRI is not the proper officer to issue Show Cause Notice (“SCN”) which has so been issued in the current matter under Section 28(4) read with Section 2(34) of the Customs Act, 1962.
Further, observed, because of the reason that DRI is not a proper officer, the entire proceeding stands invalid and the appeals stand dismissed.
In the case of M/S Canon India Private Limited v. Commissioner of Customs [Civil Appeal No. 1827 of 2018 dated March 09, 2021] , the SCNs issued by the DRI were struck down for denying Basic Customs Duty (“BCD”) exemption on import of “Digital Still Image Video” cameras. By interpreting Section 28(4) the Customs Act, 1962, it was held that only a “proper officer” under the section can issue such a notice, thereby interpreting that the section provides the power only to the officer or his successor, who had originally been provided with the task of Assessment.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
In view of decision dated 09.03.2021 of three judge Bench of this Court in Civil Appeal No. 1827 of 2018 titled as “M/s. Canon India Private Ltd. vs. Commissioner of Customs” reported in 2021(3) SCALE 748, these appeals must fail as the show cause notice(s) in the present cases was also issued by Additional Director General (ADG), Directorate of Revenue Intelligence (DRI), who is not a proper officer within the meaning of Section 28(4) read with Section 2(34) of the Customs Act, 1962.
Hence, these appeals stand dismissed.
However, dismissal of these appeals will not come in the way of the competent authority to proceed in the matter in accordance with law.
Pending application(s), if any, stand disposed of.
The appeals are dismissed in terms of the signed order.
Pending applications, if any, stand disposed of.
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