Dismissed

M/S Ajwa Dry Fruit Impex , v. Union of India

Kerala HC18 Oct 2023WP(C)/16393/2023

Case brief

AI extract

What is this about?

Petitioner challenged a Customs reassessment order imposing IGST on imported dates. The Court held that Section 28 of the Customs Act empowers the authority to assess taxes payable under any other law, including IGST, dismissing the writ petition.

What did the court decide?

Writ petition dismissed; Petitioner directed to pursue appeal remedy.

M/S Ajwa Dry Fruit Impex , Vs Union of India — Customs and Excise | Kerala HC (2023)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH

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WEDNESDAY, THE 18TH DAY OF OCTOBER 2023 / 26TH ASWINA, 1945
WP(C) NO. 16393 OF 2023

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PETITIONER:

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M/S. AJWA DRY FRUIT IMPEX,
CB-40-2392, GROUND FLOOR NR MADEENA MASJID,
RAJIV GANDHI ROAD, KANNUR-670001,
REPRESENTED BY ITS PROPRIETOR JASIM ABDU.

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BY ADVS.
 SRI. K. P. ABDUL AZEES
 SMT. T. ARCHANA
 SRI. BABY SAHLA B.

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RESPONDENTS:

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1 UNION OF INDIA, REPRESENTED BY REVENUE SECRETARY, NORTH BLOCK, NEW DELHI-110001

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2 CENTRAL BOARD OF INDIRECT TAXES, REPRESENTED BY CHAIRPERSON NORTH BLOCK, NEW DELHI - 110002

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3 STATE OF KERALA, REPRESENTED BY SECRETARY(TAXES), SECRETARIAT, THIRUVANANTHAPURAM – 695001

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4 THE JOINT COMMISSIONER (APPRAISING IMPORT), OFFICE OF THE COMMISSIONER OF CUSTOMS, CUSTOM HOUSE, WILLINGDON ISLAND, COCHIN- 682009

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BY ADV.
 SRI. AJOY P. B.

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
18.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) NO. 16393 OF 2023

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DINESH KUMAR SINGH, J.

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W.P.(C) No.16393 of 2023

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Dated this the 18^th day of October, 2023

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JUDGMENT

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The present writ petition has been filed by the petitioner under Article 226 of the Constitution of India impugning the order in original dated 30.03.2023 in Exhibit P-1 passed by the 4^th respondent Joint Commissioner (Appraising Import).

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petitioner had imported items declared as ‘Wet Dates’ (Processed dates) vide five bill of entries mentioned in the order in original. The petitioner classified the imported goods under CTH 0804 1020 and assessed the same with duty @ BCD (Basic Custom Duty) 20% + SWS (Social Welfare Surcharge) 10% + IGST nil under Sl. No.51 of the Notification No.02/2017-Integrated tax (Rate) dated 28.06.2017.

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On post clearance audit of the above mentioned bills of entry by Customs Receipt Audit (CRA), Customs House, Cochin, it was observed that the importer had imported dates having an assessable value of Rs.85,91,498/-. The IGST exemption claimed

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WP(C) NO. 16393 OF 2023

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under Sl. No.51 of the IGST exemption Notification No.02/2017Integrated tax (Rate) dated 28.06.2017 was applicable to “fresh dates” under Chapter 0804 wet/processed dates attracted 12% IGST against Sl. No.16 of Schedule II of Notification No.01/2017Integrated Tax (Rate) dated 28.06.2017. The petitioner was issued show cause notice on 10.03.2022 asking him to show cause as to why short levied duty of Rs.12,57,795/- (the IGST exemption) should not be demanded from the importer/petitioner under Section 28(1) of the Customs Act, 1962 along with applicable interest under Section 28AA of the Customs Act, 1962. But the petitioner did not filed any reply to the show cause notice dated 10.03.2022. Four times dates were given i.e., on 12.08.2022, 23.08.2022, 13.01.2023 and 03.02.2023. However, the petitioner does not chose to turn up for personal hearing. Vide letter dated 25.01.2023 the petitioner had requested one week time to file reply against the show cause notice and one more opportunity to attend the personal hearing. The petitioner filed the reply and after affording the opportunity of personal hearing to the petitioner on 17.03.2023, the impugned order Exhibit P-1 in original came to be passed saying that the “wet dates” attract IGST of 12% against Sl. No.16 of Schedule II of Notification No.01/2017-Integrated Tax (Rate) dated 28.06.2017

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WP(C) NO. 16393 OF 2023

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and the demand of Rs.12,57,795/- was confirmed. The interest on short levy of Rs.12,57,795/- under Section 28AA of Customs Act, 1962 was also confirmed.

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The Learned Counsel for the petitioner submits that even if it is assessed, when the petitioner did not claim wrong exemption from payment of the IGST, the assessing authority under Section 28 of Customs Act is not empowered to assess the IGST and it is the authority under the IGST Act which could have proceeded with the matter. He therefore submits that the impugned order is without jurisdiction inasmuch as it has been passed by an authority which is not empowered to assess the tax/duty under the provisions of IGST Act.

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The Learned Counsel for the petitioner also submits that under definition clause Sub-section (15) to Section 2, duty means the custom duty and it does not include the IGST tax/duty. He has also brought attention of this Court to the provision of Section 28 to submit that only in case of non payment/short payment revision of the Customs duty, the provisions of Section 28 of the Customs Act could be invoked and not for short payment/non payment or wrong exemption on evasion of IGST, Section 28 could have been invoked.

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WP(C) NO. 16393 OF 2023

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He therefore submits that since the order has been passed by an incompetent authority, the impugned order Exhibit P-1 in original is void ab initio and is liable to be set aside.

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Mr. Ajoy P. B., Learned Counsel for the Revenue opposed the contention of the Learned Counsel for the petitioner that Subsection (2) of Section 2 defines the assessment order. If the definition of assessment order is considered, it is not confined only to the Customs duty but, it is in respect of every duty, cess or tax which is applicable on the imported goods. Therefore, the contentions raised by the Learned Counsel for the petitioner that the impugned Exhibit P-1 assessment order passed under Section 28 is without jurisdiction has no substance. Learned Counsel for the respondents has also placed reliance on the case of Canon India Private Limited (M/s.) v. Commissioner of Customs (2021 KHC 6151) in support of his contention to say that the assessing authority under the provisions of Section 28 is empowered to assess evasion/non payment of not only Customs duty but, any other tax, cess levied or duty on which imported goods attract. Learned Counsel for the petitioner also submits that this is a question of classification of the goods and therefore instead of filing the writ

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WP(C) NO. 16393 OF 2023

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petition, the petitioner ought to have been approached the appellate authority against the said order.

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I have considered the submissions. This Court is required to consider whether the order impugned in Exhibit P-1 is without jurisdiction and void ab initio . Sub-section (2) to Section 2 of the Customs Act, 1962 defines the assessment order which reads as under;

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"assessment" means determination of the dutiability of any goods and the amount of duty, tax, cess or any other sum so payable, if any, under this Act or under the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the Customs Tariff Act) or under any other law for the time being in force, with reference to-

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(a) the tariff classification of such goods as determined in accordance with the provisions of the Customs Tariff Act;

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(b) the value of such goods as determined in accordance with the provisions of this Act and the Customs Tariff Act;

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(c) exemption or concession of duty, tax, cess or any other sum, consequent upon any notification issued therefor under this Act or under the Customs Tariff Act or under any other law for the time being in force;

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WP(C) NO. 16393 OF 2023

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(d) the quantity, weight, volume, measurement or other specifics where such duty, tax, cess or any other sum is leviable on the basis of the quantity, weight, volume, measurement or other specifics of such goods;

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(e) the origin of such goods determined in accordance with the provisions of the Customs Tariff Act or the rules made thereunder, if the amount of duty, tax, cess or any other sum is affected by the origin of such goods;

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(f) any other specific factor which affects the duty, tax, cess or any other sum payable on such goods, and includes provisional assessment, self-assessment, re-assessment and any assessment in which the duty assessed is nil.”

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Sub-section (15) of Section 2 defines duty which means customs duty. Section 28 empowers the assessing authority to assess and recover the duties not levied, not paid, short levied or short paid or erroneously refunded. Section 28 therefore is not only in respect of duty which means customs duty but, it is in respect of duties which may be applicable on imported item/goods. Even otherwise, the assessment order is defined under Sub-section 2 of Section 2 of the Customs Act empowers the assessing authority to determine the dutiability of any goods and the amount of duty/tax, cess or any sum so payable under the Customs Act or

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WP(C) NO. 16393 OF 2023

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Customs Tariff Act, 1975 (51 of 1975) or under any other law for the time being in force, with reference to exemption or concession of duty, tax, cess or any other sum, consequent upon any notification issued therefor under the said Act or under the Customs Tariff Act or under any other law for the time being in force.

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The petitioner has claimed exemption from payment of IGST under the Notification No.02/2017-Integrated tax (Rate) dated 28.06.2017. Therefore, the competent authority is empowered to make assessment regarding claim of exemption from the IGST under Section 28 of the Act.

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In the above view and circumstances of the case, I find no substance in the writ petition. This writ petition appears to be wholly misconceived, and it is hereby dismissed.

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The petitioner may however have the scope to the remedy of appeal. If the petitioner files the appeal, the time period in prosecuting this writ petition shall be taken into account for condoning the delay in filing the appeal.

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Sd/DINESH KUMAR SINGH JUDGE

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Svn

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WP(C) NO. 16393 OF 2023

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APPENDIX OF WP(C) 16393/2023

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PETITIONER’S EXHIBITS

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EXHIBIT P1THE COPY OF THE REASSESSMENT ORDER NO 63/2023
DATED 30/03/2023 REOPENING THE ASSESSMENT

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EXHIBIT P2THE COPY OF BILL OF ENTRY

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EXHIBIT P3THE COPY OF NOTIFICATION 02/2017-INTEGRATED
TAX (RATE) DATED 28/06/2017

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EXHIBIT P4THE COPY OF NOTIFICATION 01/2017-INTEGRATED
TAX (RATE) DATED 28/06/2017

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EXHIBIT P5THE RELEVANT PAGE OF CUSTOMS TARIFF ACT 1975
EXHIBIT P6THE COPY OF NOTIFICATION NO 35/2017-
INTEGRATED TAX (RATE) DATED 13/10/2017

M/S Ajwa Dry Fruit Impex , v. Union of India

Case brief

What is this about?

What did the court decide?

M/S Ajwa Dry Fruit Impex , v. Union of India

Case brief

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What did the court decide?

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