The court affirmed that the power under Section 28 of the Customs Act allows for the determination of duties without requiring prior verification of self-assessment under Section 17.

ORDER :

PRAYER : Writ petition filed under Article 226 of the Constitution of India, to issue a writ of Certiorari, to call for the records of the Impugned Notice No.204/2023 dated 10.11.2023 under File No.GEN/ADJ/CIMMR/680/2023-GR 5A bearing DIN 20231173MU0000666B35 issued by the Respondent, and to quash the same.

Background

By this writ petition, show cause notice No.204/2023 dated 10.11.2023 is challenged.

2. The petitioner is engaged inter alia in the import of various telecommunication-related goods from its parent company in pursuance of its business activities. Between 15.11.2018 and 16.12.2022, the petitioner imported various products such as base stations and modules, servers and modules, long term evolution (LTE) products and modules, multiple input-output (MIMO) products, optical transport network (OTN) products and modules, plain old technology services (POTS) products, private telecommunication network (PTN) products and modules, session border controller and modules, soft switch and modules, media gateway (modules) and voice-over Internet protocol (VoIP) equipment and modules as well as spare parts relating thereto. These goods were imported by self-classification under Customs Tariff Heading (CTH) 8517 and 8471. In respect of these imported goods, the petitioner filed bills of entry for home consumption and paid the appropriate customs duty based on the aforesaid classification under the Customs Act, 1962 (the Customs Act). The Customs Department did not challenge the classification of the petitioner in the relevant bills of entry upon verification and prior to clearance or by way of appeal thereafter.

3. While importing the above mentioned goods, the petitioner availed of Exemption Notifications, namely, Sl.No.427 of Notification No.50/2017-Cus-dated 30.06.2017, Sl.Nos 5, 8, 20 and 22 of Notification No.57/2017-Cus. dated 30.06.2017 and Sl.Nos.8, 10, and 13 of Notification No.24/2005-Customs, dated 01.03.2005. As a consequence, basic customs duty was paid at the rate of 0% or 10%, as applicable, at the time of clearance of the goods.

4. Summons was issued to the petitioner by the Senior Intelligence Officer on 31.01.2022 in relation to the import of servers. In response, on 15.02.2022, Shri Deepak Kumar Jain, Senior Product Manager of the petitioner, appeared before the Senior Intelligence Officer on 16.02.2022 and submitted a statement. Pursuant to summons dated 24.02.2022, Shri Vivek Kumar, Head of Data Solutions and Planning of Bharti Airtel Ltd., the petitioner's customer, appeared and provided a statement. Thereafter, the impugned show cause notice was issued to the petitioner on 10.11.2023. The said notice states that the petitioner had misclassified the goods whereas the same should have been classified under CTH 85176100 or 85176290, as the case may be. The petitioner was also called upon to show cause as to why it is not liable to pay basic customs duty at 10% till 11.10.2018 and at 20% thereafter. Such notice was issued by invoking the enlarged period of limitation under sub-section (4) of Section 28 of the Customs Act. By letter dated 08.12.2023, the petitioner informed the respondent that it requires eight weeks' time to respond to the notice since it was consulting its legal experts and consultants. The present writ petition was filed in the above facts and circumstances.

Counsel and their contentions

5. Oral arguments on behalf of the petitioner were advanced by Mr.Vijay Narayan, learned senior counsel, and by Mr.Tarun Gulati, learned senior counsel. Arguments on behalf of the respondent were advanced by Mr.Sai Srujan Tayi, learned senior standing counsel.

6. The first contention of Mr. Vijay Narayan was that the bills of entry were assessed by accepting the petitioner's self-classification. By relying on Sections 17 and 18 of the Customs Act, learned senior counsel contended that an elaborate mechanism is provided for assessment, including provisional assessment. While sub-section (1) of Section 17 enable