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1. This appeal arises from the order-in-appeal passed by the Collector (Appeals), Madras. By this order the Collector (Appeals) has confirmed the order-in-original passed by the Assistant Collector, who had confirmed the demand of Rs. 5,76,049/- (Rupees Five Lakhs Seventy Six Thousand Forty Nine only) under Sub-section (2) of Section 28 of the Customs Act, 1962.

2. The appellants had imported a consignment of Polyvinyl Pyrilidone K30 (Iodine) and claimed clearance under Heading 29.42 of CTA at the rate of duty of 60% + 50% + CVD 5% + 5%. The Bill of Entry was assessed and the goods were cleared on 3-2-1992. However, the department felt that the correct classification of the product is under Chapter Heading 39.05 as the product is a Vinyl Polymer and it is also supported by Harmonised Commodity Description and Coding System (Explanatory Notes). A show cause notice was issued to the appellants on 30-7-1992 under the instructions of the Assistant Collector, as is evident from the case records produced by the departmental representative. This show cause notice was also received by the Customs Agent on 30-7-1992 namely, M/s. Jeena & Co., Madras, said to be on behalf of the appellant, as can be seen from the records produced for inspection during the hearing by the ld. SDR. The ld. Consultant denied the appellant or the Agent having received the notice within the 6 months from the date of issue. However, the Managing Partner of the appellant's company by his affidavit dated 4-11-1993 filed before the Assistant Collector has admitted having received the show cause notice on 10-8-1992 at Indore in his office. In the affidavit he has stated:

"Date of receipt of the said notice based on the memory and which is to be taken as correct."

The appellant had not produced any supporting evidence with regard to the receipt of the show cause notice on 10-8-1992 except this affidavit and in which the Managing Director is basing the date on his memory. The postal-cover is also not produced. The appellants have also not produced any inward register to show the entry of the receipt date of the letter in their office on the said date. They have also not produced any postal endorsement from the post office of the delivery on this date. They have appeared before the Assistant Collector for personal hearing along with the Customs House Agent, on whom, the department is said to have served the notice on 30-7-1992. The appellants did not raise the question of validity of issue of notice by an officer other than the Assistant Collector. They had merely contended that the product was used in the manufacture of Povidine Iodine USP 21 and therefore, justified the classification under Chapter 29.42. However, before the Collector they raised the question of the show cause notice having been issued by the officer other than the proper officer and also that the demands were time barred, as the notice had been received by them on 10-8-1992, after the expiry of 6 months. It was also pleaded by them that the assessment made by an Assistant Collector cannot be reviewed by any other Assistant Collector and also justified the assessment under Heading 29.49 of Customs Tariff Act. The ld. Collector, however, disagreed with the Appellant's contentions. The ld. Collector has held that the notice has been issued within the stipulated statutary limit by service on the clearing agent on 30-7-1992. He has, further, held that Section 147 of the Customs Act, 1962, lays down that where an 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. Any such thing done by an 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, importer or exporter, so that in any proceedings under this Act, the owner, importer or exporter of the goods shall be liable as if the thing had been done by himself. Therefore, on the basis of reading of this section the ld. Collector has held that the demand has been served on the Customs House Agent of the importer and it is to be treated as service on the importer himself, since the appellants had not produced anything to show that the said Customs House Agent was not authorised to receive the notice in relation to the imports made by them. In that event, the ld. Collector held that the demand notice had been served on the importer within the time limit envisaged under the Act. On merits the ld. Collector has confirmed the order of the Assistant Collector in terms of the reading of the Explanatory Notes.

7. The view taken by the Tribunal in the case of Almelo Lab. (P) Ltd. v. Collector of Customs is applicable to the facts of this case. The Tribunal had also followed the Kerala High Court's judgment rendered in the case of Chellapan v. Additional Collector of Customs, as reported in 1978 (2) E.L.T. (J 547), which had examined the scope of Section 153 of Customs Act, 1962. The Tribunal has also noticed that in D. Sen Gupta's case, the Hon'ble Calcutta High Court had no occasion to deal with Section 147 of Customs Act, which is a specific provision with regard to recovery of the short levy from the Customs House Agent under certain circumstances and that the Hon'ble High Court was only dealing with the show cause notice in an offence case pertaining to [seizure] of goods under Section 124 of the Customs Act. The Tribunal has also distinguished the case rendered by the Special Bench in the case of Collector of Central Excise v. Presto Works -1987 (28) E.L.T. 469. The Tribunal has also noted the observations of the Madras High Court rendered in the case of KM. Mohamed Ghouse & Co. v. Additional Collector of Central Excise as reported in 1979 (4) E.L.T. (J 683) to the effect that the primary liability to pay the duty is on the importer under Section 28 but that liability can be sustained on the clearing agent CHA as a result of special provisions contained in Section 147. It also noted further observations of the High Court that in the first instance, the department should put [in] efforts to recover the amount due from the importer and only on their failure to recover from them, the customs department can proceed for recovery from clearing agent under Section 147(3) proviso. The Tribunal has, further, held that from the beginning the notice for recovery, as well as [actual order] confirming the short levy of differential levy had not [sic] been above on the importers, but on the other hand the Customs House had confirmed the demand on the Customs House Agent and they had drawn his attention to the bar for recovery of sums due to Government in terms of Section 142 of the Customs Act, on the importer's failure to pay the same. The Tribunal has also noted the obligation of the Customs House Agent (CHA) as laid down in the regulation 14D of CHA Licensing Regulations, 1984 as being relevant. According to which, CHA shall advise his client to comply with the provisions of the Act and in the case of non-compliance with the provisions, he shall bring the matter to the notice of the Assistant Collector of the Customs. The Tribunal has further held that the Act casts an obligation on the CHA to comply with the provision of the Act and in this context has held that the service of short levy demand on the CHA would assume validity. In that event of the matter, the Tribunal dismissed the case of Almelo Laboratories Pvt. Ltd.

9. As can be seen from the D. Sen Gupta's case, as rightly pointed out by the single member in the case of Almelo Lab. Pvt. Ltd., the Hon'ble Calcutta High Court had not examined the case in the context of Section 147 of the Customs Act, 1962.

10. In the case of Presto Works, the Tribunal has held in para 22 as follows :-

"22. In the light of the above discussions, and in the light of the judgments cited before us and for the reasons discussed in detail, we hold that, to begin with, there is no proof that the Customs House Agent is an agent of the importer even after clearance of the goods. Further, it is not established that either by law or by an agreement, he has been authorised or empowered to receive notice on behalf of the importer. The various judgments cited, show overwhelmingly that the amount due from the importer can be recovered from the agent only if, according to the proviso to Section 147(3) of the Customs Act, 1962, it is the opinion of the Assistant Collector of Customs that the amount due cannot be recovered from the owner/importer or exporter. In the matter before us, there is no record of such a finding by the Assistant Collector. The majority of the decisions cited by both the sides support the view that, in this case, the importer, to whom the 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."