DYNAMIC ORTHOPEDICS (P) LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner is an importer of certain goods. They imported the goods under Bill of Entry No. 7152 dated 10-12-1997 and cleared the same by paying import duty classifying the item imported under Heading 9021.10 of the Schedule to the Customs Tariff Act. The Bill of Entry, covered the goods, as per two invoices namely, Invoice Nos. 97000233 and 97000234. Subsequently, the Asstt. Commissioner of Customs issued a show cause notice directing the petitioner to show cause why an amount of Rs. 23,820/- short levied in respect of the goods covered by Invoice No. 97000233 should not be recovered from them for the reason that the classification of the goods given in the Bill of Entry was not correct. It resulted in an order confirming the demand. The petitioner challenged the order of demand in an appeal before the Commissioner of Customs (Appeals), which was dismissed by Ext. P1 order dated 8-3-2000. The petitioner did not pursue the matter further and paid the said amount on 12-4-2000, after receipt of the order on 21-3-2000. Subsequently, the petitioner was served with Ext. P3 demand notice dated 19-4-2000, demanding an amount of Rs. 52,728/- also on the ground that there was a calculation error in the earlier proceedings and the actual amount due was Rs. 76,548/- out of which the petitioner has paid only Rs. 23,820/- leaving a balance of Rs. 52,728/-. The petitioner objected to the said demand by filing Ext. P4. Dissatisfied with that reply again by Ext. P5, the 2nd respondent reiterated the demand. Subsequently, by Ext. P6, an order under Section 142 of the Customs Act was issued to the petitioner detaining their subsequent imports, for failure to pay the said amount of Rs. 52,728/-. Exts. P3, P5 and P6 are under challenge before me.

(2.) The contention of the petitioner is that the assessment in respect of the Bill of Entry in question attained finality on the Commissioner of Customs (Appeals) passing Ext. P1 order. That being so, the said assessment could not have been reopened by Ext. P3 demand without complying with provisions of Section 28 of the Customs Act. They would also submit that this is not a calculation error at all, but a short levy in so far as by earlier proceedings the Asstt. Commissioner sought to recover only the short levy in respect of one of the two invoices covered by the Bill of Entry and the amount now demanded is only in respect of the other invoice. Therefore, clearly this is a case of short levy, in which case the amount could not have been demanded from them except in accordance with Section 28 of the Customs Act. According to the petitioner, no show cause notice, as contemplated under Section 28 of the Customs Act, had been issued to them, preceding Ext. P3 within the time limit prescribed under the said Section, without which no sustainable demand could have been made by the 2nd respondent. The petitioner points out that the Bill of Entry is dated 10-12-1997 and Ext. P3 is dated 19-4-2000 which is far beyond six months from the relevant date within which period the 2nd respondent was bound to issue a show cause notice, under Section 28 of the Customs Act, to sustain a valid demand. The petitioner therefore submits that Ext. P6 order issued for non-payment of amounts covered by Exts. P3 and P5, which the petitioner is not liable to pay, is also clearly illegal and unsustainable. The petitioner, therefore seeks quashing of Exts. P3, P5 and P6.

(3.) The 2nd respondent has filed a detailed counter affidavit controverting the contentions of the petitioner, According to the 2nd respondent, Section 28 is not attracted at all to the particular case. Admittedly, the Bill of Entry is covered by two invoices. Both the invoices pertain to identical goods. Therefore, there was short levy in respect of the goods imported under both the invoices. By a clerical mistake only one of the invoices was included in the earlier demand which has only been sought to be corrected by Ext. P3. Therefore, according to the 2nd respondent, there is no question of applicability of Section 28 or any period of limitation as contended by the petitioner. On the above grounds, the Asstt. Solicitor General appearing for the 1st respondent would argue to sustain Exts. P3, P5 and P6 orders.