If goods are exempted from Basic Customs Duty, does proceedings initiated by the Directorate of Revenue Intelligence for recovery of duty valid?

The Supreme Court has ruled on a batch of appeals concerning the import of Digital Still Image Video Cameras. The core issue was whether the Directorate of Revenue Intelligence could initiate proceedings to recover customs duty under Section 28(4) of the Customs Act, 1962, after the goods had been cleared based on an exemption from Basic Customs Duty. The CESTAT had previously denied this exemption and upheld consequential actions like confiscation and penalties.

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.1827 OF 2018

M/S CANON INDIA PRIVATE LIMITED …. APPELLANT(S)

VERSUS

COMMISSIONER OF CUSTOMS …. RESPONDENT(S)

WITH
CIVIL APPEAL NO. 1875 OF 2018
WITH
CIVIL APPEAL NO.1832 OF 2018
WITH
CIVIL APPEAL NO.3213 OF 2018

J U D G M E N T

S.A. BOBDE, CJI.

1. This batch of statutory appeals (being Civil AppealNos. 1827/2018, 1875/2018, 1832/2018 and 3213/2018) under Section 130E of the Customs Act, 1962 arises from acommon final order of the Central Excise and Service TaxAppellate Tribunal (‘CESTAT’) dated 19th December 2017 (‘impugned order’).

2. Vide the impugned order an exemption of basiccustoms duty accorded to the Digital Still Image Video Cameras (‘DSIC’) imported by the Nikon India Pvt. Ltd,Canon India Pvt. Ltd., Sony India Pvt. Ltd. and SamsungIndia Electronics Pvt. Ltd (hereinafter referred to as ‘appellants’ or ‘importers’), in terms of exemption Notification No. 20/2005 dated 01.03.2005 (as amended by Notification No. 15/2012 dated 17.03.2012) came to be denied and the consequential confiscation of goods,demand of interest and imposition of penalty as provided for under various sections of the Customs Act, 1962, was upheld by the CESTAT.

3. Since the appeals involve common questions, these are being decided together and for sake of convenience weshall be referring to the events which took place in the case of Nikon.

4. The main issue is whether after clearance of the cameras on the basis that they were exempted from levy ofbasic Customs duty under Notification No.15/2012, theproceedings initiated by the Directorate of Revenue Intelligence for recovery of duty not paid under Section28(4) of the Customs Act, 1962 are valid in law.

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