Summary
In this 2021 decision, the Supreme Court set aside customs recovery proceedings initiated by the Additional Director General of DRI after cameras had been assessed and cleared by the customs appraisal authority. It construed Section 28(4) as requiring action by the proper assessing authority or its authorised successor and found the relied-on assignment notification insufficient. Independently, full disclosure of camera specifications and a requested first check defeated the alleged suppression needed for extended limitation. Actual exemption eligibility was left undecided.
Issues
- Whether the DRI officer could initiate the challenged duty recovery after assessment by the appraisal authority.
- Whether disclosure of specifications excluded wilful misstatement or suppression for extended limitation.
Provisions considered
- Section 28(4), Customs Act, 1962The Court held the recovery notices jurisdictionally invalid and independently unavailable under extended limitation absent the alleged suppression. (¶¶ 7-15, 23-29)
- Sections 2(34) and 6, Customs Act, 1962The Court distinguished definition and appointment from lawful entrustment of customs functions and rejected the assignment basis relied upon in these proceedings. (¶ 16-23)
Held
- The Court construed the proper officer in Section 28(4) as the assessing authority, its successor or another officer authorised within the relevant office, rather than an officer from a different department reopening the assessment. On that construction the DRI notices lacked jurisdiction. (¶ 9-15)
- The notification relied on for assignment of functions invoked the definition in Section 2(34), which the Court held did not confer entrustment power; it treated Section 6 as requiring the relevant Central Government notification. The challenged proceedings and ensuing demands were set aside. (¶ 16-23)
- The importer supplied the bill of entry and camera literature and requested a first check. Specifications disclosed the single-sequence recording limit and the goods were open to examination, precluding the alleged wilful misstatement or suppression and the five-year extended period. (¶ 24-28)
- The Court did not decide whether the cameras actually qualified for the exemption; the jurisdictional and limitation conclusions made that unnecessary. (¶ 27-29)
Result
Appeals allowed; CESTAT order and impugned demand notices set aside. Parties to bear their own costs.