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M/S Canon India Private Limited v. Commissioner of Customs

Civil Appeal · 2021 INSC 169Decided 9 Mar 2021
Civil Appeal No. 1827 of 2018
Chief Justice S.A. Bobde · Justice A.S. Bopanna · Justice V. Ramasubramanian

Background

Canon India and three other camera importers (Nikon, Sony, Samsung) imported Digital Still Image Video Cameras that were cleared without customs duty after a Deputy Commissioner of Customs determined they qualified for a duty exemption. Roughly two years later, the Directorate of Revenue Intelligence (DRI), a different department, issued show-cause notices alleging the importers had suppressed facts about the cameras' recording capacity, and sought to recover the duty under Section 28(4) of the Customs Act, 1962. The Customs tribunal (CESTAT) upheld the demand, prompting this appeal.

Decision Breakdown

The Supreme Court held that Section 28(4) empowers only "the proper officer", meaning the same officer (or their designated successor) who originally assessed and cleared the goods, to reopen that assessment, not any customs officer generally and certainly not an officer from a different department such as the DRI, unless specifically entrusted with that function under Section 6 of the Act. The notification the government relied on to authorise DRI officers was found to have been issued without proper legal authority. The Court also held, on the facts, that the importers had disclosed the cameras' specifications at the time of clearance, so there was no wilful suppression justifying the extended five-year limitation period. The show-cause notices and resulting demands were quashed.

Lesson Learnt

A legal power to reopen an official decision can only be exercised by the specific officer or authority the law designates for that purpose: a different agency cannot step in and redo another department's assessment merely because it disagrees with the outcome.

Official source (sci.gov.in)View Judgment (PDF)

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