Judgment:
1. This appeal is directed against the order passed by the Collector of Customs (Appeals), Calcutta confirming the order passed by the Assistant Collector of Customs, Calcutta confirming the demand for customs duty.
2. The following are the particulars of imports of sets consisting of Plastic Extruded Casing, Die cast casing and Pressed Metal Parts of VCR from Japan, through a Singapore supplier : -30-7-1988 500 sets National US Dollar 30 per set (Rs. 428)18-8-1988 500 sets National -Ditto-19-8-1988 500 sets Funai US Dollar 28 per set (Rs. 460) The invoice prices were accepted and duty assessed and goods were cleared. Subsequently it was found that there were imports of similar goods at Singapore Dollar 70 per set CIF for National Brand and Singapore Dollar 65 per set CIF for Funai Brand. Notice was issued to the appellants to show cause why valuation should not be made on that basis and why differential duty should not be demanded. The appellants resisted the notice, but the same was confirmed. Hence the appeal.
3. The Assistant Collector relied on other imports of similar goods, the particulars of which are as follows :29-4-1987 310 sets National Singapore Dollar Imports by the 70 per set.
appellants12-8-1987 200 sets Funai Singapore Dollar 65 Imports by other per set importers The Assistant Collector adopted the above prices for valuing the goods imported by the appellants 4. Learned Counsel for the appellants contended that the imports relied on were not at the time of subject import or near about, that the appellants had placed indent for 4000 sets and the invoice prices were only 14% to 15% less than the prices at which the compared imports were made and the difference was on account of quantity discount. The claim that the indent had been placed for 4000 sets is not substantiated by producing a copy of the indent or other documents. From the dates of the three subject imports, it can perhaps be inferred that the indent might have been placed for 1500 sets. However, for 1310 sets imported in April/May 1987, appellants had paid 14 to 15% higher price. The same higher price was paid by another importer in January, 1988 for 500 sets. Comparatively higher price (Singapore Dollar 65) was paid by another importer for similar goods in September, 1988. Thus we find that during the period prior and subsequent to the subject import, appellants and other importers had paid much more than the price declared for the subject imports. The three earlier imports made by the appellants were also of 1500 sets. In the absence of any evidence, it cannot be accepted that the subject imports were effected against an indent for 4000 sets. Hence the rejection of the transaction value and loading of the value was justified.
5. It is next contended that the claim is not sustainable as the show-cause-notice was barred by time in respect of the invoice dated 30-7-1988. It appears duty on goods covered by the invoice was paid on 23-8-1988. Show-Cause-Notice was issued on 17-2-1989 but served on the appellants only on 28-2-1989 which was beyond 6 months of the date of payment. The Assistant Collector took the view that the notice was within the period stipulated in Section 28 of the Customs Act, 1962 since it was issued within the period and that the notice was served on the Custom House Agent (CHA) on 22-2-1989 within the period and hence the notice was not barred by time. This conclusion was upheld by the Collector (Appeals).
6. The notice in the case was issued under Section 28 of the Customs Act, 1962, (for short, the Act). The provision in Section 28(1)(b) applies to the instant case. This provision requires the proper officer to "serve" notice on the person chargeable with the duty within six months of the relevant date, which, in this case, is the date of payment of duty. The requirement of the provision is not to issue notice within the period, but to serve it within the period. The expression used is "serve" and not "issue". A notice may be issued within the time limit, but it may be served after the expiry of the time limit. In such a case the statutory requirement is not fulfilled and the notice must be held to be time-barred. This has been held so in Jayashree Textiles and Industries v. Collector of Customs - 1986 (23) E.L.T. 491 (Tribunal) and Collector of Customs v. Presto Works - 1987 (28) E.L.T. 469 (Tribunal), Collector of Customs v. Hicks Thermometers (India) Ltd.(Tribunal), Sewing System (P) Ltd. v. Collector of Customs - 1992 (62) E.L.T. 725 (Tribunal). We therefore hold that notice issued to the appellants would be barred by time in regard to the duty paid on 23-8-1988.
7. It is to overcome this difficulty that the Respondent contended that notice served on the CHA was within time regarding the duty paid on 23-8-1988 and this must be held to be sufficient. Section 2(c) of the Customs House Agents Licencing Regulations, 1984 defines CHA as meaning a person licensed under the 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. The requirement of licence is prescribed under Section 146 of the Act. The 1984 Regulations were framed under Sub-section (2) of Section 146.
Section 147 of the Act lays down that anything required to be done by the importers may be done on his behalf by his Agent. This principle would apply only to anything within the express or implied authority of the Agent. Section 153(a) of the Act permits a notice to be served on the person for whom it is intended or to his Agent. CHA is an Agent for the purpose of the Act for the transaction of any business relating to the import of goods at any Customs station. The question is whether the authority of CHA continues even after the clearance of imported goods.
8. Dealing with sufficiency of service on CHA of notice under Section 124 of the Act, the High Court of Calcutta in D. Sengupta v. Collector of Customs -1987 (31) E.L.T. 30, observed : "The clearing agent is not a person within the meaning of Section 124 of the said Act for the purpose of service of notice after the goods have been assessed and cleared from the customs....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 the importer for all time to come solely on the ground that the importer is the owner of the goods and the goods are lying in his custody....The clearing agent ceases to be an agent of the importer after clearance of the goods from the customs station. The clearing agent has no further function to discharge after removal of the goods from the customs station. He can not be treated as an agent for all the time to come even after the goods have been cleared."Collector of Customs v. Presto Works - 1987 (28) E.L.T. 469 (Tribunal), Collector of Customs v. Trivandram Rubber Works Ltd. - 1992 (62) E.L.T. 360 (Tribunal), Collector of Customs v. Surat Weavers Co-op. Producers Society Ltd.(Tribunal) and Jaswant B. Shah v. Collector of Customs - 1996 (81) E.L.T. 669 (Tribunal).In Bombay Pharma Products v. Collector of Customs - 1995 (75) E.L.T. 781 (Tribunal), the importer had not raised the question of competency of CHA to receive the notice on behalf of the importer and had actually taken the CHA along with him before the adjudicating officer to plead his case. In the circumstances, the Tribunal drew the inference that the erstwhile CHA had been retained by the importer to receive the notice and to contest the case. The inference rested entirely on the circumstances existing in the case and the case can only be regarded as an exception to the rule that once the clearance is over, the CHA ceases any further agency or representation capacity. The decision of the High Court of Madras in Usha Enterprises v. Government of India - 1993 (14) E.L.T.2350 and of the High Court of Allahabad in Alka Watches Pvt. Ltd. v.Union of India - 1983 (14) E.L.T. 2116 are of no assistance as they did not deal with the CHA but with an "agent" as such.
10. It is thus clear that a person whose services are retained as CHA is an agent for the limited purpose of arranging release of the goods and once goods are cleared, has no further function to discharge and cannot, without anything more be regarded as continuing to be an agent of the importer and notice served on him cannot be treated as served on the agent of the importer. The show-cause-notice in respect of goods covered by invoice dated 30-7-1988 was barred by time.
11. In the result, the impugned order is set aside in regard to differential duty demanded on goods covered by invoice dated 30-7-1988 and is confirmed in other respects. The appeal is allowed in part as indicated.