M/S. SWASTIKA ENTERPRISES &ANR. versus COMMISSIONER OF CUSTOMS & ORS.

Citation: [2015] 8 S.C.R. 1151 · Decided: 04-08-2015 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Appeal(s) allowed

Judgment (excerpt)

[20.15] 8 S.C.R. 1151 
M/S. SWASTIKA ENTERPRISES &ANR. 
A 
v. 
COMMISSIONER OF CUSTOMS & ORS. 
(Civil Appeal No. 7570 of 2004 etc.) 
AUGUST 04, 2015 
.... 
[A.K. SIKRI AND R. F. NARIMAN, JJ.] 
8 
Finance (No.2) Act, 1998 - s.95(ii)(b) aQd (c) - Kat 
Vivad Samadhan Scheme - Entitlement to '-- Demand of c 
additional customs duty from the assessee declining his 
claim for exemption thereof- By way of endorsement on the 
Bill of entry- The demand challenged by filing writ petition 
- Introduction of the Scheme during pendency of the petition 
- Assessee opted to avail the benefit of the Scheme -
D 
Revenue denied the same on the ground that no· show-cause 
. notice/demand notice was issued to the assessee and hence 
by virtue of s. s.95(ii)(b), the Scheme was not applicable -
The denial of benefit challenged in another writ petition -
Single Judge of High Court held that the assessee was E 
entitled to benefit of the Scheme - Division Bench of High 
Court held that the assessee was not entitled to avail the 
benefit by virtue of sub-clause (b) as well as (c) of s. 95(ii) -
On appeal, held: It cannot be said that demand stands 
crystallized only when there is show-cause notice issued ul F 
s.28 of Customs Act- It is evident from ss. 46(1), 47(2) and 
153 of 1998 Act that endorsement on the Bill of Entry and 
the service thereof was a notice of demand -
The 
endorsement had been treated as notice of demand by the G 
parties as well as the High Court - Therefore, the mischief 
contained u/s. s.95(i0(b) would not be attracted-In the facts 
of the case, mischief uls. s.95(ii)(c) is also not attracted -
The assessee shall be entitled to the benefit of the Scheme 
-CustomsAct, 1962-s.28. 
1151 
H 
1152 
SUPREME COURT REPORTS 
[2015] 8 S.C.R. 
A 
Allowing the appeals, the Court 
HELD: 1.1 It is not correctto say thatthe demand 
stands crystallized only when there is a show-cause 
notice issued u/s. 28 of the Customs Act and after 
B following the procedure when the adjudicating authority 
passes an order on the said show-cause notice holding 
that customs duty or additional customs duty is payable 
c::.nd on that basis notice of demand is issued. The 
contingency of issuing show-cause notice under s.28 
C of Customs Act would arise where the duty has not been 
paid either on the ground that it was not levied at all or 
was short levied. Another reason for invoking the 
provision would be where duty has been erroneously 
refunded. Such a situation did not arise in the present 
D case. Moreover, the matter has to be examined in the 
light of the provision of the Kar Vivad Samadhan 
Scheme. [Paras 13 and 14] [1160-B-C, E, H] 
Union of India v. Nitdip Textiles Processors 2011 (13) 
E 
SCR 26: (2012) 1 SCC 226- relied on. 
1.2 The Finance (No,2) Act, 1998 does not contain 
any specific provision prescribing the manner in which 
customs duty would be assessed or demanded in 
F respect of goods imported under a Bill of Entry for home 
consumption. An endorsement on the Bill of Entry and 
return thereof to the importer asking the importer to pay 
the amount therein would amount to issuing a demand. 
Under Section 46(1) (as it then stood), there was an 
G obligation on the part of the importer to present a Bill of 
Entry in such cases. Section 47(2) of the Customs Act 
provides that in case there is a failure to pay the import 
duty within a specified period from the date on which 
Bill of Entry is returned to the imrorter, it would attract 
H interest until the date of demand. Section 153 of the 1998 
M/S. SWASTIKA ENTERPRISES v. COMMNR. OF 
1153 
CUSTOMS 
Act also clarifies that any order, decision, summons or A 
notice under the Act may be served by tendering it to 
the person or to whom it is intended or to his agent. In 
the instant case, after the endorsement on Bill of Entry, 
it was admittedly served upon the appellants in the 
manner specified under Section 153. (Para 15] (1161-D-
B 
E, G-H; 1162-A, C-D] 
. 
Renuka Oat/a (Dr.) v. Commissioner of Income Tax, 
. Karnataka 2002 (5) Suppl. SCR 166: (2003) 2 SCC 
19- relied on.. 
· ~ 
c 
1.3 The demand raised by way of endorsement 
on the Bill of Entry prompted the appellants to challenge 
the same by filing the writ petition. The Revenue also 
never took the plea that the case was premature in the 
sense that no demand had been crystallized in the D 
absence of show-cause notice or adjudication order and, 
therefore, such a writ petition was not competent. Thus, 
both the parties u

Excerpt shown. Read the full judgment & AI analysis in Lexace.