Case Number: Civil Appeal No. 1827,1875, 1832, 3213 of 2018 

Judges Name: Hon’ble Judges S. A. Bobde J, A. S. Bopanna J, V. Ramasubramanian J

Order dated: 09.03.2021

“Only an officer who performed the initial assessment may perform a re-assessment under section 28(4) of the Customs Act.”

Facts of the Case:

• The batch of Appeals are filed under Section 130E of the Customs Act, 1962 arises from a common final order of the Central Excise and Service Tax Appellate Tribunal (‘CESTAT’) dated 19th December 2017. 
• In 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 (hereinafter referred to as ‘appellants’ or ‘importers’), in terms of exemption Notification No. 20/2005 dated 01.03.2005 (as amended by Notification No. 15/2012 dated 17.03.2012) 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. A show-cause notice was issued under Section 28(4) of the Customs Act, 1962, alleging that the authorities were induced to clear the cameras by wilful misstatement and suppressing facts about the camera. 
• The issue arises for consideration 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?

Supreme Court held:

• The Supreme Court held that the proceedings initiated by the Directorate of Revenue Intelligence by issuing show-cause notices in all the matters are invalid without any authority of law. The court directed for the notices and the ensuing demands to be set-aside. Under Section 28(4), the power given is for the recovery of the duty not paid, or paid in part or erroneously refunded conferred on the proper officer. It further held that when an assessment is made, the re-assessments power would rest with the same officer and not with another department officer, even though of the same rank. It further observed that if this is allowed, it will result in an anarchical and unruly operation of statute, which is unintended. 
• Therefore, the court held that the phrase ‘proper officer’ would refer to the officer who in the first instance assessed and cleared the goods. In the instant matter, it was the Deputy Commissioner Appraisal Group who cleared the goods at the first instance. However, the show-cause notice was issued by the Additional Director General of DRI. In the court’s opinion, the Additional Director General of DRI is not “the proper officer” as per Section 28(4) of the Customs Act. Therefore, the initiation of recovery proceedings is without any jurisdiction and liable to be set aside.