Customs, Excise and Gold Tribunal - Delhi
Collector Of Customs vs Trivandrum Rubber Works Ltd. on 15 May, 1992
Equivalent citations: 1992(39)ECC152, 1992(62)ELT360(TRI-DEL)
ORDER G.P. Agarwal, Member (J)
1. The Revenue has filed the present appeal against the impugned Order-in-Appeal passed by the Collector of Customs and Central Excise (Appeals), Cochin.
2. Shortly put the facts of the case are that the respondents imported 1610 pieces of Latex Foam Sponge. On their behalf M/s. Achuthan Pillai & Co. filed Ex-bond Bill of Entry 43, dated 3-12-1985 for the clearance of the imported goods which were assessed to duty under Heading 4005.91/4005.00 read with Notification No. 71/68-C.E. The respondents paid the duty on 9-4-1986 as assessed. However, it appears that the Internal Audit Department of the Customs House pointed out that the imported goods were correctly classifiable under Heading 4008.11 which resulted in a short collection of duty. As a sequel thereof, a Show Cause Notice dated 9-10-1986 was issued to the respondents calling upon them to pay the duty amounting to Rs. 20,20,370.80 on the ground that the goods were assessable as Cellular Rubber Sheets under Heading 4008.11. It was confirmed by the Assistant Collector of Customs, Cochin, vide his Order-in-Original dated 1-4-1987. Against that Order the respondents filed their appeal before the Collector of Customs (Appeals), Madras, who vide his Order No. C. 27AP/68/87, dated 20-8-1987 allowed the appeal and set aside the original order holding that the demand was received by the respondents after expiry of the statutory time limit. Against that Order of the Collector (Appeals), the Revenue preferred the appeal before this Tribunal. The Tribunal vide its Order No. 722/88-C, dated 19-9-1988 set aside the Order of the Collector (Appeals) and remanded the matter to the Assistant Collector for disposal of the dispute in accordance with law and after giving due opportunity to both sides. On remand the respondents contended before the Assistant Collector that they received the Show Cause Notice, dated 9-10-1986 demanding the duty on 14-10-1986 and produced the photo copy of the demand letter bearing their rubber stamp and the date 14-10-1986 to show that it was received by them on 14-10-1986. It was also contended that the said M/s. Achuthan Pillai & Co. who had filed the Bill of Entry for clearance has ceased to be their agents after clearing the subject goods and as on 9-10-1.986 they had not been authorised or empowered by the respondents to receive notices under the Customs Act on their behalf. Therefore, any notice demanding the differential duty served on M/s. Achuthan Pillai & Co. was evidently not a valid service of notice of the respondents. However, the Assistant Collector negatived the said defence of the respondents and confirmed the demand inter alia observing that the demand notice was served on the said M/s. Achuthan Pillai & Co. within time which is binding on the respondents. Against that Order of the Assistant Collector the respondents filed their appeal before the Collector of Customs and Central Excise (Appeals), Cochin, who vide his impugned Order-in-Appeal allowed the appeal and set aside the said Order passed by the Assistant Collector. Hence the present appeal -by the Revenue.
3. Appearing on behalf of the Revenue, Shri K.K. Bhatia, learned JCDR, submitted that the Collector (Appeals) should have gone deep into the merits of the case and he should not have confined himself only to the point of limitation under Section 28 of the Customs Act, 1962. He erred in setting aside the Order of the Assistant Collector on the mere assertion by the respondents that the demand notice sent to them was received by them on 14-10-1986; even though the fact remains that the same demand notice was received by the respondent's clearing agents, namely, M/s. Achuthan Pillai & Co. on 9-10-1986 itself, that is to say, within the time limit prescribed under Section 28 of the Customs Act. It was stressed by him that the learned Collector (Appeals) should have adverted himself to Section 153 of the Customs Act which provides for service or order, decision etc. and lays down that "Any order or decision passed or any summons or notice issued under this Act shall be served - (a) by tendering the order, decision, summons or notice or sending it by registered post to the person for whom it is intended or to his agent; or (b) if the order, decision, summons or notice cannot be served in the manner provided in Clause (a), by affixing it on the notice board of the Customs House". He also drew our attention to Sub-section (2) of Section 147 of the Act which provides that where this Act requires anything to be done by the owner, importer or exporter of any goods, it may be done on his behalf by his agent and any such thing done by the agent of the owner, importer or exporter of any goods shall, unless the contrary is proved be deemed to have been done with the knowledge and consent of such owner or importer or exporter, so that in any proceedings under this Act, the owner, importer or exporter of the goods shall also be liable as if the thing had been done by himself and further that when any person is expressly or impliedly authorised by the importer to be his agent in respect of such goods for all or any of the purposes of this Act, such person shall, without prejudice to the liability of the owner, importer or exporter be deemed to be the importer for such goods for such purposes. In a nutshell, his submission was that that the service of the demand notice in question upon the agent of the respondents, that is to say, M/s Achuthan Pillai & Co. within the statutory period as prescribed under Section 28 of the Act was a valid demand, more particularly, it was addressed to the respondents. To draw support to his arguments, he cited the case of Almelo Laboratories Pvt. Ltd. v. Collector of Customs - 1989 (41) E.L.T. 319 , wherein a learned Member of the South Regional Bench of this Tribunal at Madras held in the facts and circumstances of that case that the demand notice served on the Customs House Clearing Agent of the importer within time limit is a valid demand and the burden lies on the importer to prove the contrary that they have not authorised the clearing agent to receive the demand. It was emphasised by Shri K.K. Bhatia, learned JCDR, that the case of Collector of Customs, Bombay v. Presto Works, Jallandhar -1987 (28) E.L.T. 469 , on which the Collector (Appeals) had based his impugned order was considered in that case also by the South Regional Bench, Madras.
4. In reply, Shri S.K. Beri, learned counsel, appearing on behalf of the respondents drew our attention to Order No. 722/88-C, dated 19-9-1988 whereby the case was remanded by this Tribunal for disposal of the dispute in accordance with law and in the light of the observations made therein to the Assistant Collector, and submitted that admittedly the demand notice was received by the respondents on 14-10-1986, that is to say, after the expiry of the time limit prescribed under Section 28 of the Act. Supporting the reasonings and the findings of the Collector (Appeals), he submitted that the said clearing agent M/s Achuthan Pillai & Co. was appointed only for the purpose of clearing the subject imported goods and had ceased to be their agent after 9-4-1986, and therefore, any service of the demand notice upon the said clearing agent on 9-10-1986 is of no consequence and cannot deemed to be a service upon the respondents. To buttress his submission, he relied upon the case of Collector of Customs, Bombay v. Presto Works, Jallandhar , supra, wherein the Special Bench B2 comprising of Two Members of the Tribunal (to which I was a party) after referring the case law on the point held that the importer to whom the demand notice was issued beyond the period of six months cannot be made to pay the duty under Customs Law merely because a copy of the notice was sent to the clearing agent in time. To top his arguments, it was contended by Shri S.K. Beri, learned counsel, that this very issue was a subject matter of a decision rendered by the Calcutta High Court in the case of D. Sengupta v. Collector of Customs and Ors. -1987 (31) E.L.T. 30 , wherein it was held that service of Show Cause Notice on clearing agent is not a valid service after goods have been released and acknowledgement of clearing agent not treatable as service on the importer.
5. We have considered the submissions. Before we advert to the submissions made by the parties, it would be advantageous to refer to the Order of remand (Order No. 722/88-C, dated 19-9-1988). It appears from paragraph 3 of the said Order that it was contended by the Revenue before the Tribunal that the notice of demand was served on the Customs House Agents on the last date of the stipulated six months period. There is no evidence on record of the actual date of service of the notice on the respondents apart from their assertion that they received the notice only on 14-10-1986 and further that there is no denial from the respondents that the clearing agent, namely M/s. Achuthan Pillai & Co. had not ceased to be their Clearing Agents on the date the Customs House Agents received the demand notice. In this premises, a request was made by the Revenue that the case be remanded to the Assistant Collector for re-consideration. The Tribunal after referring to the provisions of Sections 147 and 153 of the Customs Act remanded the case observing as follows :-
"5. It is necessary for a proper disposal of the dispute that the exact status of M/s. Achuthan Pillai & Co. in relation to the respondents as on 9-10-1986 should be ascertained. If they had ceased to be the agents on behalf of the respondents after clearance of the goods and as on 9-10-1986, they had not been authorised or empowered by the respondents to receive notices under the Customs Act on their (the respondents') behalf in respect of the subject goods, the notice served on M/s Achuthan Pillai & Co., Customs House Agents would evidently not be a valid notice of service on the importer of the goods, namely, the respondents. There is also no evidence on record, apart from the assertion of the respondents, that the notice was actually received by them only on 14-10-1986. It is necessary to ascertain this fact also. In the circumstances, it appears to us that the proper course to adopt is to set aside the impugned order and remand the matter to the Assistant Collector for disposal of the dispute in accordance with law and after giving due opportunity to both sides, bearing in mind the observations contained in this order."
6. On remand the Assistant Collector confirmed the demand, but the Collector (Appeals) set aside the same vide his impugned Order, as aforesaid, holding as follows :-
(1) That the original authority has not disputed the fact that the appellants received the Show Cause Notice only on 14-10-1986; and (2) From the impugned Order, it is clear that, there is no evidence of any kind to show that M/s Achuthan Pillai & Co. continued to act as agents on behalf of the respondents and that as on 9-10-1986 they had been authorised or empowered by the appellants to receive notice under the Customs Act on their (respondents') behalf.
7. Before us, it was also not disputed that the demand Show Cause Notice was received by the respondents only on 14-10-1986, that is to say, after the expiry of the period prescribed under Section 28 of the Act. The only contention which was agitated before us was that since the demand-cum-Show Cause Notice, dated 9-10-1986 addressed to the respondents was received by the clearing agent, M/s. Achuthan Pillai & Co. along with its copy meant to them on 9-10-1986, the service of the Show Cause Notice on the agent shall be deemed to be the service on the respondents for the purpose of Section 28, and if that is so the demand was raised within the time prescribed under Section 28 of the Act. In the case of Collector of Customs, Bombay v. Presto Works, Jallandhar , supra, the identical question was involved and after referring to the provisions of Section 28,147 read with Sections 12 and 153 of the Act and the following case law the Two Members' Bench of the Tribunal observed that the argument of the importer that the clearing agent was not authorised by him (importer) to receive notice on his behalf was not disproved by the Revenue who could not show any evidence that, either according to an agreement or according to the provisions of the Customs Law, the Customs House Agent who was appointed to clear the goods on behalf of the importer, continued to be the agent for the importer even after the goods were cleared, and that the agent had the legal duty of receiving notices on behalf of the importer after the clearance of the goods was completed (para 20) -
(i) B. Bhoormal Tirupati v. The Additional Collector of Customs, Madras - AIR 1974 Madras 224 ; (ii) Chellappan v. Additional Collector of Customs - 1978 (2) E.L.T. (J-547) (Kerala) ;
(iii) Usha Enterprises, Madras v. Government of India and Another-1983 (14) E.L.T. 2350 ;
(iv) Jayashree Textiles & Industries, Rislira v. Collector of Customs, Calcutta -1986 (23) E.L.T. 491 ;
(v) Pilmen Agents (Private) Ltd., Madras v. Collector of Customs, Madras, - AIR 1967 Madras 124 ;
(vi) K.M. Mohamed Ghouse & Co. v. Assistant Collector of Central Excise, IDO, Nagapattinam -1979 (4) E.L.T. (J 683) ; and
(vii) V.V. Dabke & Sons, Bombay v. Collector of Customs, Bombay - 1983 (12) E.L.T. 583 .
8. In the case of D. Sengupta v. Collector of Customs , supra, the Calcutta High Court also took the similar view and observed in paragraphs 34 and 35 that the clearing agent is not a person within the meaning of Section 124 of the Act for the purpose of service of notice after the goods have been assessed and cleared from the customs. Under Section 2(c) of the Customs House Agents Licensing Regulations, 1984 "Customs House Agent" means a person licensed under these regulations to act as agent for the transaction of any business relating to the entry or departure of conveyance or the import or export of goods at any customs station. "Customs Station" has been defined in Section 2(15) of the Customs Act which means any customs port, customs airport or land customs stations. Accordingly, the clearing agent is only an agent of the importer for a limited purpose for clearance of the goods. Once the goods have been cleared from the customs station and the goods after clearance are in the custody either of the importer or the owner or any other person, the clearing agent ceases to be an agent of the importer. The clearing agent cannot be treated as an agent of an importer for all time to come solely on the ground that the importer is the owner of the goods and the goods are found lying in his custody. The clearing agent has no further function to discharge after removal of the goods from the customs station. He cannot be treated as an agent for all time to come even after the goods have been cleared. Applying the ratio of these decisions, it is clear that the Collector (Appeals) was right in observing that there is no evidence of any kind to show that the clearing agent M/s. Achuthan Pillai & Co. continued to act as an agent on behalf of the respondents and that as on 9-10-1986 they had been authorised or empowered by the appellants to receive notice under the Customs Act on their behalf. In fact, there is no evidence on record to show that M/s. Achuthan Filial & Co. continued to remain as agent on behalf of the respondents even after 9-10-1986 or they had been duly authorised to receive any notice on behalf of the respondents. Even before us no such evidence worth the salt was pointed out to us. On the other hand from the photo copy of the notice (Annexure B - page 9 of the paper book) issued under Section 28 of the Customs Act, we observe that it was issued to the respondents with a copy to M/s. Achuthan Pillai & Co., stating as follows:
"Copy to : M/s. Achuthan Pillai & Co., Cochin for information and necessary action. The original notice has been served on the importer without prejudice to the liability of M/s. Achuthan Pillai & Co. who are deemed to be owned the goods as contemplated in Section 147(3) of the Customs Act, 1962 by virtue of having acted as agents of the importer in respect of the above consignment."
8.1 It was delivered to the said M/s. Achuthan Pillai & Co. and they received it stating as follows:
"Received original and copy.
Sd/-
9-10-1986 Achuthan Pillai & Co."
9. From the aforesaid acknowledgement appearing on the notice, it is clear that, M/s Achuthan Pillai & Co. never received the said notice for and on behalf of the respondents. From the said endorsement, it is also clear that this was not a notice to the Customs House Clearing Agent to recover the amount of duty under Proviso to Sub-section (3) of Section 147. Even it is not the case of the Revenue that there has been a finding of the authorities below that the amount due could not be recovered from the owner, as it is settled law that reading Sections 12, 28 and 147 of the Act together, it is clear that in cases, in which duty has not been levied or short levied, the owner should be called upon to pay it if it was not due to the wilful act or negligence or default of the agent and, if the amount cannot be recovered from the owner, the authorities concerned may collect it from the agent. The case of Almelo Laboratories Pvt. Ltd. v. Collector of Customs , supra, decided by a learned single Member of this Tribunal no doubt hold that Customs House Agent continues to be an agent of importer even after the clearance of the goods unless the contrary is proved by the importer, but we are unable to agree with it in view of the decisions rendered by the two Members Bench of this Tribunal in the case of Collector of Customs, Bombay v. Presto Works, Jallandhar , supra, and by the Calcutta High Court in the case of D. Sengupta v. Collector of Customs , supra. No doubt that in the case of D. Sengupta v. Collector of Customs , supra, the Calcutta High Court was dealing with Show Cause Notice issued under Section 124 of the Act and there was no occasion to deal with the provisions of Section 147 of the Customs Act. But the fact remains that proviso to Sub-section (3) of Section 147 applies only when it is the case of the Revenue that the amount of duty which had not been levied or short levied cannot be recovered from the owner. It is not the case here, as aforesaid. In this view of the matter, we respectfully do not agree with the distinction drawn by the learned Member in the case of Almelo Laboratories Pvt. Ltd. v. Collector of Customs , supra, with regard to the case of D. Sengupta v. Collector of Customs , supra.
10. In the result, we uphold the impugned Order-in-Appeal and reject the appeal being devoid of any merit.