LexCOMMISSIONER OF CUSTOMS, MUMBAI versus M/S. VIRGO STEELS, BOMBAY AND ANR.
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'" A t. B COMMISSIONER OF CUSTOMS, MUMBAI v. MIS. VIRGO STEELS, BOMBAY AND ANR. APRIL 4, 2002 [S.P. BHARUCHA, CJ., N. SANTOSH HEGDE AND ARIJIT PASAYAT, JJ.] Customs Act, 1962-Section 28-Notice of payment of duty, interest- C Principle of waiver-Applicability-Whether mandatory requirement of issuance of notice under the Section can be waived and whether notice under the Section being a condition precedent to invoke jurisdiction of the officer concerned, in the absence of such notice proceedings initiated for recovery of duty became void-On facts, held right of notice being personal to the person concerned can be waived by that person-Further the notice being condition D precedent is referable to the procedural requirement of the section and not to be jurisdictional aspect of the proper officer to recover the escaped duty- Thus in absence of such notice proceedings initiated for recovery of duty is not void A Cement company floated tender inviting supply of steel bars for a E project Respondents offered to supply steel bars and the company accepted the offer. Respondents obtained an advance licence under the Deemed Export Scheme for duty-,free important of steel. Company however abandoned the work of expansion and the licence for importation of duty-free steel became invalid. lnspite of this, respondents imported certain quantities of steel duty- F free. Since the import made by respondents after the abandonment of the project was in contravention of the provisions of the Customs Act, 1962 Commissioner of Customs decided to initiate proceedings against respondents. Respondents wrote a letter to Assistant Collector of Customs admitting that .the duty-free import was illegal and they were ready to pay the duty chargeable under the said import as also any other penalty imposed. They G further stated they did not want any show cause notice and personal hearing. ' They also enclosed a cheque as a token of their commitment in the letter. Collector of Customs after deducting amounts already deposited by them, made a demand for the balance sum along with a penalty. Collector also imposed a penalty on the cement company for having abetted the illegal H import of the said sale. Respondents and cement company filed appeals. 934 T A ........... ... - • COMMR. OF CUSTOMS v. VIRGO STEELS 935 Tribunal partly allowed respondents appeal holding that the non-issuance of A show cause notice as required under Section 28 of the Act had vitiated the proceedings initiated by the Collector of Customs. The cement company's appeal was also allowed holding that there was no intentional or otherwise abetment by cement company because they had already informed respondents of their decision to abandon their expansion project. In appeals before this Court, appellant-revenue contended that the Tribunal has erred in coming to the conclusion that the principle of waiver B did not apply to the requirement of notice under Section 28 of the Act. He submitted that by letter, respondents had in specific terms admitted the violation of conditions of the licence granted to it under the Deemed Export C Scheme as also the firm's liability to pay duty and penalty. The firm had also expressly waived its right to receive a show-cause notice as also personal hearing. Respondents contended that a notice under Section 28 of the Act being a condition precedent to invoke the jurisdiction of the officer concerned, in D the absence of such notice proceedings initiated for the recovery of duty became void. He also submitted that the principle of waiver does not apply to a mandatory requirement of law. He further contended that the letter was obtained by the customs authorities under coercion and duress, therefore, there could be no waiver based on such letter. Disposing of the appeals, the Court E HELD : I.I. Section 28 of the Customs Act only provides for the procedural aspect for recovery of duty, hence, any irregularity committed by a proper officer in following the procedure laid down in Section 28 would not denude that officer of his jurisdiction to initiate action for recovery of F escaped duty but it may make such proceedings initiated by that officer voidable. Thus the terms "condition precedent" used in the case of Tin Plate Co.• is referable to the procedural requirement of Section 28 and not to the jurisdictional aspect of the proper officer to recover the escaped duty and • the law laid
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