Landmark decision in the matter of Customs-

Canon India Private Limited Vs Commissioner of Customs

Forum-Supreme Court of India

Date-9th March 2021

Sub: When once an assessment has been made by the Proper officer, whether the appellate or revision authority has power to do reassessment.
Powers of Directorate of Revenue Intelligence explained.

The apex court in this case was confronted of a situation where Canon and Samsung had imported DSIC cameras which were released without any customs duty after being allowed benefit of exemption notifications as per the law by Deputy Commissioner of Customs being the Proper officer. Later on a show cause notice was issued under Section 28 (4) of the Customs Act, 19621 by the Additional Director General DRI, alleging that the Customs Authorities had been induced to clear the cameras by wilful mis-statement and suppression of facts about the cameras. 

In this context , the apex court dealt with an interesting point that when the proper officer who had originally inspected the cameras and allowed the same to be cleared without payment of customs duty, the additional director general being the higher authority had no business to issue the notice u/s 28(4) for reassessment of the goods. The Apex court interpreted the meaning of the phrase “ the proper officer” and differentiated the same with the phrase “any proper officer” by saying that when the word “the” was written it meant that reassessment could have been exercised only by the proper officer who had allowed the clearance of the goods or his successor in officer not by his higher officer.

Where the statute confers the same power to perform an act on different officers, as in this case, the two officers, especially when they belong to different departments, cannot exercise their powers in the same case. Where one officer has exercised his powers of assessment, the power to order re-assessment must also be exercised by the same officer or his successor and not by another officer of another department though he is designated to be an officer of the same rank. In our view, this would result into an anarchical and unruly operation of a statute which is not contemplated by any canon of construction of statute.

It is obvious that the re-assessment and recovery of duties i.e. contemplated by Section 28(4) is by the same authority and not by any superior authority such as Appellate or Revisional Authority. It is, therefore, clear to us that the Additional Director General of DRI was not “the” proper officer to exercise the power under Section 28(4) and the initiation of the recovery proceedings in the present case is without any jurisdiction and liable to be set aside.

The Apex court went on to decide that the Additional Director General is not even proper officer.

Ramesh Patodia
10-03-2021