The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the show-cause notices issued by the DRI would become valid in view of the recent amendment in Finance Bill, 2022 only after the enactment of the Bill.
The Tribunal bench comprising Mr. P K Chaudhary (JM) and Mr. P V Subba Rao (TM) was considering an appeal filed by M/s Beriwala Impex Pvt. Ltd wherein the appellants challenged the SCN issued by DRI proposing recovery of differential duty under section 28 along with interest, confiscation of the impugned goods and imposition of penalties.
Advocates Sourabh Bagaria & Indranil Banerjee, the counsels for the appellant submitted that the impugned order needs to be set aside because it was passed in pursuance of SCN issued by the DRI demanding duty under section 28 and officers of DRI are not “proper officers” to issue an SCN under that section as held by a three member bench of Hon‘ble Supreme Court in the case of Canon India.
After considering the recent amendment in the Finance Bill, 2022, the Tribunal held that if the Finance Bill becomes the Act, DRI officers will be at par with Customs officers under the Customs Act by virtue of the substitution of section 3 and their various actions such as searches, seizures, arrests may not become void because of non-entrustment of those functions by the Government under Section 6.
“However, there is no proposal to amend section 28 and hence SCNs can be issued even after this Bill becomes the Act only by „the proper officer‟, i.e., the officer who has done the assessment in the first place. In fact, this specific legal position as held by the Supreme Court in Canon India is likely to be reaffirmed by insertion of section 110AA in the Act. It would not be out of place to mention that the nature of powers under section 11A of the Central Excise Act and Section 73 of the Finance Act, 1994 are similar to the power under Section 28 of the Customs Act. However, this power has been conferred on the proper officer‟ under the Customs Act and on “the Central Excise officer” in the other two Acts and this dissimilarity implies that the Central Excise officer need not be ‘proper officer’ but the similarity lies in the use of the definite article the‘ instead of a‘ or any‘ or any of the‘, etc,” the bench said.
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