Proposal for Confiscation, Penalty cannot be segregated from Customs duty demand: CESTAT [Read Order]

The Mumbai Bench of Customs, Excise, and Service Tax (CESTAT) ruled that Proposal for confiscation, the penalty cannot be segregated from Customs duty demand.

The appellant, Dhiren Enterprise has assailed the order passed by the Commissioner of Customs (Adjudication), by which the demand raised in the show-cause notice issued by the Additional Director General, Directorate of Revenue and Intelligence2, Mumbai, under sections 28 and 124 of the Customs Act 19623 has been confirmed.

It has been submitted by Shri Anil Balani, learned counsel appearing for the appellant that the Additional Director General, DRI did not have the jurisdiction to issue the show cause notice as he was not the proper officer under section 28 of the Customs Act to issue the notice and in support of this contention learned counsel placed reliance upon decisions of the Supreme Court in Canon India Pvt. Ltd. vs. Commissioner of Customs and Commissioner of Customs, Kandla vs. M/s. Agarwal Metals and Alloys.

Manoj Das, authorized representative appearing for the Department, however, submitted that the Additional Director General, DRI had the jurisdiction to issue the show cause notice and also submitted that the Department has filed a review petition against the judgment of the Supreme Court in Canon India on 07.04.2021 and it is pending. The notice has been issued both under sections 28 and 124 of the Customs Act and, therefore, even if the notice issued under section 28 is held to be without jurisdiction, the notice issued under section 124 of the Customs Act would still survive.

The coram headed by President Justice Dilip Gupta and Technical Member P. Anjani Kumar held that the demand of duty on allegation of misdeclaration of value cannot be segregated from the action of confiscation and penalty based also on misdeclaration of value. Consequently, since the demand of duty fails, action for confiscation and penalty cannot survive.

To Read the full text of the Order CLICK HERE

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