Re-assessment under section 28(4) of customs act can only be done by an officer who did the initial assessment.

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CIVIL APPEAL NO.1827 OF 2018 decided on March 09, 2021

Bench: CJI SA Bobde, AS Bopanna & V. Ramasubramanian, JJ.


The appeal is against an order of the Central Excise, and Service Tax Tribunal [CESTAT] in 2017 passed in a batch of appeals. The impugned order denied exemption on customs duty to the Digital Still Image Video Camera [DSIC] imported by Nikon India Pvt. Ltd. and Samsung India Electronics Pvt. Ltd granted earlier. The importers’ goods were also confiscated, interest demanded, and penalty imposed under the Customs Act, 1962. On the arrival of the consignment of cameras at the airport, the customs authorities cleared the goods to be duty-free. However, later 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.



Whether the Directorate of Revenue Intelligence has the authority to issue show-cause notice for non-payment of duty under Section 28(4) of the Customs Act, 1962?



The court held that the proceeding 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. When an assessment is made, the bench observed that the re-assessments power would rest with the same officer and not with another department officer, even though of the same rank. The court 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. 


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