The Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that when the demandduty notice issued by the department is declared as invalid on the ground that it was not issued by a proper officer, the penalty and confiscation order shall also unsustainable.
In the instant case, the show cause notice dated 01.09.2017 issued by the Additional Director General, DRI against the appellant, Schweitzer Engineering Laboratories Pvt Ltd.
Before the Tribunal, the appellant relied on a decision of the Tribunal in Bakeman’s Home Products Pvt. Ltd. vs. Collector of Cus., Bombay and contended that the proposal for confiscation of goods and imposition of penalty cannot be segregated from the duty demand and, therefore, if the duty demand fails as the show cause notice was not issued by the proper officer, the proceedings for confiscation and penalty cannot survive. The appellant, therefore contended that the notice is invalid as the said officer was not the proper officer and, therefore all proceedings undertaken by the Department on this show cause notice is, therefore, without jurisdiction. The order dated 29.03.2019 passed by the Commissioner of Customs (Import), therefore, cannot be sustained.
The Tribunal bench comprising President Justice Dililp Gupta and Technical Member P V Subba Rao cited the decision in Bakeman’s Home Products, wherein the Tribunal held that the proposal for confiscation and penalty cannot be segregated from duty demand and, therefore, the proceedings for confiscation and imposition of penalty cannot be sustained.
“Thus, for all the reasons stated above, the order dated 29.03.2019 passed by the Commissioner of Customs (Import) cannot be sustained and is set aside. The appeals are, accordingly, allowed,” the Tribunal said.
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