Holding

Section 28(4) confers the power to recover duty only on ‘the proper officer’ who originally assessed the goods, and the Additional Director General of the DRI is not such an officer; therefore the recovery proceedings are invalid.

Summary

Canon India imported digital still image video cameras which were cleared as exempt from customs duty by the Deputy Commissioner of Customs on 24 March 2012 under Notification No.15/2012. On 19 August 2014 the Additional Director General of the Directorate of Revenue Intelligence (DRI) issued a show‑cause notice under Section 28(4) of the Customs Act alleging wilful mis‑statement and suppression of facts to induce the exemption. The key issue was whether the DRI officer was a “proper officer” under Section 28(4) and whether the notice was within the five‑year limitation. The Supreme Court held that the power to recover duty under Section 28(4) is vested only in “the proper officer”, i.e., the officer who originally assessed and cleared the goods (the Deputy Commissioner or his successor), and that the Additional Director General of DRI is not a customs officer nor entrusted with such functions under Section 6. Consequently, the recovery proceedings were ultra vires and the demand notices were set aside. The Court also found no wilful mis‑statement, so the extended limitation period did not apply.

Issues considered

Whether the Additional Director General of the Directorate of Revenue Intelligence is a ‘proper officer’ under Section 28(4) of the Customs Act to issue a notice for recovery of duty.
Whether the Central Government, under Section 6 of the Customs Act, had lawfully entrusted the DRI officer with the functions of a proper officer.
Whether the show‑cause notice issued on 19 August 2014 was within the five‑year limitation period, and whether the extended limitation period applies.
Whether there was any wilful mis‑statement or suppression of facts by the importers regarding the camera specifications.

Legislation cited

Customs Act, 1962s. 2(34), s. 28(4), s. 6
Customs Tariff Act, 1975

Subjects

Customs dutySection 28(4)Proper officerDirectorate of Revenue IntelligenceExemption notificationLimitation periodWilful mis‑statementStatutory interpretationRe‑assessment

Judgment

776 [2021]
SUPREME COURT 3 S.C.R. 776
REPORTS [2021] 3 S.C.R.

A M/S CANON INDIA PRIVATE LIMITED
v.
COMMISSIONER OF CUSTOMS
(Civil Appeal No.1827 of 2018)
B MARCH 09, 2021
[S.A. BOBDE, CJI, A. S. BOPANNA AND
V. RAMASUBRAMANIAN, JJ.]
Customs Act, 1962: s.28(4) – Consignment of cameras – Bill
of Entry submitted to Customs Authorities along with covering letter
C and literature containing specifications of the cameras – After
verification of the Bill of Entry by the Inspector and the
Superintendent, the Deputy Commissioner of Customs checked the
goods and took a decision to clear the goods on 24.3.2012, as
being exempt from duty in terms of the Notification No.15/2012
D (issued on 17.3.2012) – On 19.8.2014, show cause notice issued
under s.28(4) by Additional Director General, Directorate of
Revenue Intelligence alleging that the Customs Authorities had been
induced to clear the cameras by wilful mis-statement and suppression
of facts about the cameras – Whether the Directorate of Revenue
Intelligence had authority in law to issue a show cause notice under
E s.28(4) of the Act for recovery of duties allegedly not levied or paid
when the goods have been cleared for import by a Deputy
Commissioner of Customs who decided that the goods were exempted
– Held: s.28(4) empowers the recovery of duty not paid, part paid
or erroneously refunded by reason of collusion or any wilful mis-
F statement or suppression of facts and confers the power of recovery
on “the proper officer” – The obvious intention is to confer the
power to recover such duties not on any proper officer but only on
“the proper officer” – There is no doubt that, if Parliament intended
that any proper officer could have exercised power under s.28(4),
it could have used the word ‘any’ – Parliament has employed the
G article “the” not accidentally but with the intention to designate the
proper officer who had assessed the goods at the time of clearance
– The proper officer need not be the very officer who cleared the
goods but may be his successor in office or any other officer
authorised to exercise the powers within the same office – The power
has been so conferred specifically on “the proper officer” which
H
776
M/S CANON INDIA PRIVATE LIMITED v. COMMISSIONER 777
OF CUSTOMS

must necessarily mean the proper officer who, in the first instance, A
assessed and cleared the goods i.e. the Deputy Commissioner
Appraisal Group and not the Director General of the DRI.
Customs Act, 1962: s.28(4) – Power to review – The nature of
the power to recover the duty, not paid or short paid after the goods
have been assessed and cleared for import, is broadly a power to B
review the earlier decision of assessment – Such a power is not
inherent in any authority – The power has been so conferred
specifically on “the proper officer” which must necessarily mean
the proper officer who, in the first instance, assessed and cleared
the goods – It is completely impermissible to allow an officer, who
has not passed the original order of assessment, to re-open the C
assessment on the grounds that the duty was not paid/not levied, by
the original officer who had decided to clear the goods and who
was competent and authorised to make the assessment – The nature
of the power conferred by s.28(4) to recover duties which have
escaped assessment is in the nature of an administrative review of D
an act – The section must, therefore, be construed as conferring the
power of such review on the same officer or his successor or any
other officer who has been assigned the function of assessment –
In other words, an officer who did the assessment, could only
undertake re-assessment – It is, therefore, clear that the Additional
Director General of DRI was not “the” proper officer to exercise E
the power under s.28(4) and the initiation of the recovery
proceedings in this case is without any jurisdiction and liable to be
set aside – Tax/Taxation.
Customs Act, 1962: s.6 – Import of cameras – Deputy
Commissioner of Customs checked the goods and took a decision F
to clear the goods as being exempt from duty – Show cause notice
issued under s.28(4) by Additional Director General, Directorate
of Revenue Intelligence alleging that the Customs Authorities had
been induced to clear the cameras by wilful mis-statement and
suppression of facts about the cameras – Whether the Additional G
Director General of the DRI was even a proper officer – Held: The
Additional Director General can be considered to be a proper officer
only if it is shown that he was a Customs officer under the Customs
Act – It is obvious that the re-assessment and recovery of duties i.e.
contemplated by s.28(4) is by the same authority and not by any
H
778 SUPREME COURT REPORTS [2021] 3 S.C.R.

A superior authority such as Appellate or Revisional Authority – It is,
therefore, clear that the Additional Director General of DRI was
not “the” proper officer to exercise the power under s.28(4) – If it
was intended that officers of the Directorate of Revenue Intelligence
who are officers of Central Government should be entrusted with
functions of the Customs officers, it was imperative that the Central
B
Government should have done so in exercise of its power under s.6
of the Act – The entire proceeding in the present case initiated by
the Additional Director General of the DRI by issuing show cause
notices in all the matters are invalid without any authority of law
and liable to be set-aside and the ensuing demands are also set-
C aside.
Customs Act, 1962: s.28(4) – Limitation – Suppression of facts
– Invocation of extended period of limitation – Held: On facts,
importer had asked for a first check and had shown the cameras
along with Bill of Entry and literature detailing specifications of
D models – The custom authorities could have operated the cameras
to see the length of time of the single sequence and whether
recording of the single sequence exhausted the total memory of the
camera (including extended memory) and whether the cameras were
eligible for exemption – In such circumstances, it cannot be said
that there was any wilful mis-statement of facts – It must, therefore,
E follow that the extended period of limitation of five years was not
available to any authority to re-open under s.28(4).
Interpretation of statutes: It is well known that when a statute
directs that the things be done in a certain way, it must be done in
that way alone – Customs Act, 1962 – s.28(4).
F
Interpretation of statutes: Use of article ‘the’ in a provision –
Interpretation of the provision.
Allowing the appeals, the Court
HELD: 1.1 Section 28(4) of the Customs Act empowers
G the recovery of duty not paid, part paid or erroneously refunded
by reason of collusion or any wilful mis-statement or suppression
of facts and confers the power of recovery on “the proper officer”.
The obvious intention is to confer the power to recover such
duties not on any proper officer but only on “the proper officer”.
[Para 9][786-B-C]
H
M/S CANON INDIA PRIVATE LIMITED v. COMMISSIONER 779
OF CUSTOMS

Consolidated Coffee Ltd. and Another v. Coffee Board, A
Bangalore (1980) 3 SCC 358 : [1980] 3 SCR 625; Shri
Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd. (2001) 3
SCC 609 : [2001] 2 SCR 36 – relied on.
1.2 There are only two articles ‘a (or an)’ and ‘the’. `A (or
an)’ is known as the Indefinite Article because it does not B
specifically refer to a particular person or thing. On the other
hand, ‘the’ is called the Definite Article because it points out and
refers to a particular person or thing. There is no doubt that, if
Parliament intended that any proper officer could have exercised
power under Section 28 (4), it could have used the word ‘any’.
[Para 10][786-F-G] C

1.3 Parliament has employed the article “the” not
accidentally but with the intention to designate the proper officer
who had assessed the goods at the time of clearance. It must be
clarified that the proper officer need not be the very officer who
cleared the goods but may be his successor in office or any other D
officer authorised to exercise the powers within the same office.
In this case, anyone authorised from the Appraisal Group.
Assessment is a term which includes determination of the
dutiability of any goods and the amount of duty payable with
reference to, inter alia, exemption or concession of customs E
duty vide Section 2 (2) (c) of the Customs Act, 1962. [Para 11]
[786-G-H; 787-A-B]
1.4 The nature of the power to recover the duty, not paid
or short paid after the goods have been assessed and cleared for
import, is broadly a power to review the earlier decision of F
assessment. Such a power is not inherent in any authority. Indeed,
it has been conferred by Section 28 and other related provisions.
The power has been so conferred specifically on “the proper
officer” which must necessarily mean the proper officer who, in
the first instance, assessed and cleared the goods i.e. the Deputy
Commissioner Appraisal Group. Indeed, this must be so because G
no fiscal statute has been shown to us where the power to re-
open assessment or recover duties which have escaped
assessment has been conferred on an officer other than the officer
of the rank of the officer who initially took the decision to assess
the goods. [Para 12][787-B-D] H
780 SUPREME COURT REPORTS [2021] 3 S.C.R.

A 1.5 Where the statute confers the same power to perform
an act on different officers, as in this case, the two officers,
especially when they belong to different departments, cannot
exercise their powers in the same case. Where one officer has
exercised his powers of assessment, the power to order re-
assessment must also be exercised by the same officer or his
B
successor and not by another officer of another department though
he is designated to be an officer of the same rank. This would
result into an anarchical and unruly operation of a statute which
is not contemplated by any canon of construction of statute.
[Para 13][787-E-F]
C 1.6 It is well known that when a statute directs that the
things be done in a certain way, it must be done in that way alone.
As in this case, when the statute directs that “the proper officer”
can determine duty not levied/not paid, it does not mean any
proper officer but that proper officer alone. It is completely
D impermissible to allow an officer, who has not passed the original
order of assessment, to re-open the assessment on the grounds
that the duty was not paid/not levied, by the original officer who
had decided to clear the goods and who was competent and
authorised to make the assessment. The nature of the power
conferred by Section 28 (4) to recover duties which have escaped
E assessment is in the nature of an administrative review of an act.
The section must therefore be construed as conferring the power
of such review on the same officer or his successor or any other
officer who has been assigned the function of assessment. In
other words, an officer who did the assessment, could only
F undertake re-assessment [which is involved in Section 28 (4)].
[Para 14][788-A-C]
1.7 It is obvious that the re-assessment and recovery of
duties i.e. contemplated by Section 28(4) is by the same authority
and not by any superior authority such as Appellate or Revisional
G Authority. It is, therefore, clear that the Additional Director
General of DRI was not “the” proper officer to exercise the power
under Section 28(4) and the initiation of the recovery proceedings
in the present case is without any jurisdiction and liable to be set
aside. [Para 15][788-D-E]

H
M/S CANON INDIA PRIVATE LIMITED v. COMMISSIONER 781
OF CUSTOMS

2. Whether the Additional Director General of the DRI who A
issued the recovery notice under Section 28(4) was even a proper
officer?
2.1 The Additional Director General can be considered to
be a proper officer only if it is shown that he was a Customs officer
under the Customs Act. In addition, that he was entrusted with B
the functions of the proper officer under Section 6 of the Customs
Act. The Additional Director General of the DRI can be considered
to be a Customs officer only if he is shown to have been appointed
as Customs officer under the Customs Act. [Para 16][788-F]
2.2 A Deputy Commissioner or Assistant Commissioner of C
Customs has been entrusted with the functions under Section
28, vide Sl. No.3 above. By reason of the fact that the functions
are assigned to officers referred to in Column (3) and those officers
above the rank of officers mentioned in Column (2), the
Commissioner of Customs would be included as an officer entitled
to perform the function under Section 28 of the Act conferred on D
a Deputy Commissioner or Assistant Commissioner but the
notification appears to be ill-founded. The notification is purported
to have been issued in exercise of powers under sub-Section
(34) of Section 2 of the Customs Act. This section does not confer
any powers on any authority to entrust any functions to officers. E
The sub-Section is part of the definitions clause of the Act, it
merely defines a proper officer. Section 6 is the only Section which
provides for entrustment of functions of Customs officer on other
officers of the Central or the State Government or local authority.
[Paras 19, 20][790-A-C, E]
F
2.3 If it was intended that officers of the Directorate of
Revenue Intelligence who are officers of Central Government
should be entrusted with functions of the Customs officers, it
was imperative that the Central Government should have done
so in exercise of its power under Section 6 of the Act. The reason
why such a power is conferred on the Central Government is G
obvious and that is because the Central Government is the
authority which appoints both the officers of the Directorate of
Revenue Intelligence which is set up under the Notification dated
04.12.1957 issued by the Ministry of Finance and Customs officers
who, till 11.5.2002, were appointed by the Central Government.
H
782 SUPREME COURT REPORTS [2021] 3 S.C.R.

A The notification which purports to entrust functions as proper
officer under the Customs Act has been issued by the Central
Board of Excise and Customs in exercise of non-existing power
under Section 2 (34) of the Customs Act. The notification is
obviously invalid having been issued by an authority which had
no power to do so in purported exercise of powers under a section
B
which does not confer any such power. [Para 21][790-G-H;
791-A-B]
Commissioner of Customs v. Sayed Ali and Another
(2011) 3 SCC 537 : [2011] 2 SCR 1045 – relied on.
2.4 The entire proceeding in the present case initiated by
C the Additional Director General of the DRI by issuing show cause
notices in all the matters are invalid without any authority of law
and liable to be set-aside and the ensuing demands are also set-
aside. [Para 23][793-E]
3.1 The show cause notice was issued on 19.8.2014. Under
D Section 28(4), such a show cause notice must be issued within
five years from the relevant date which means the date on which
the goods were assessed and cleared, in case the duty was not
paid or short paid or erroneously refunded by reason of collusion
or any wilful mis-statement or suppression of facts. It is, therefore,
E necessary to examine whether there is suppression of facts.
[Para 24][793-F-G]
3.2 The case was presented for scrutiny of the Customs
officers on 20.3.2012 along with the Bill of Entry and literature
consisting of specifications of the cameras. The Bill of Entry made
a statement that these are Digital Still Image Video Camera
F packed for retail sale (COOLPIX S4300, S2600 etc.). This was
supported by literature which clearly stated that “… the single
maximum recording time for a single movie is 29 minutes, even
when there is sufficient free space on the memory card for longer
recording”. This meant that even if the camera could record more
G than 29 minutes when it had sufficient free space (which depends
on the capacity of the card providing extended memory) the
maximum time for which it could record a single sequence was
29 minutes. [Paras 25, 26][793-H; 794-A-B]
3.3 In other words, the camera could record more than one
single sequence but not 30 minutes and more in a single sequence.
H
M/S CANON INDIA PRIVATE LIMITED v. COMMISSIONER 783
OF CUSTOMS

It is obvious that the Deputy Commissioner took the view that A
the camera complied with the requirement of exemption i.e. it
could only record up to less than 30 minutes in a single sequence.
At this juncture, it is not relevant to see whether the Deputy
Commissioner was right or not in taking this decision to clear
the goods as exempted goods. What is important is to see whether
B
the importers made any wilful mis-statement or suppression of
facts and induced the delivery of goods. [Para 27][794-C-D]
3.4 The importer had asked for a first check and had shown
the cameras and the cameras were offered on 20.3.2012 along
with Bill of Entry and literature detailing specifications of models.
The camera could have been operated to see the length of time C
of the single sequence and whether recording of the single
sequence exhausts the total memory of the camera (including
extended memory) and whether the cameras were eligible for
exemption. It is difficult in such circumstances to infer that there
was any wilful mis-statement of facts. In these circumstances, it D
must, therefore, follow that the extended period of limitation of
five years was not available to any authority to re-open under
Section 28(4). [Para 28][794-E-F]
Case Law Reference
[1980] 3 SCR 625 relied on para 9 E

[2001] 2 SCR 36 relied on Para 9
[2011] 2 SCR 1045 relied on para 22
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1827
of 2018. F
From the Judgment and Order No. 58448 of 2017 dated 19.12.2017
of the Customs, Excise and Service Tax Appellate Tribunal, New Delhi
in Customs Appeal No. 50099 of 2017.
With
G
Civil Appeal No. 1875, 1832, 3213 of 2018.
V. Lakshmikumaran, L. Badri Narayanan, Ms. Charanya
Lakshmikumaran, Aditya Bhattacharya, Pavan Bhushan, Ms. Ujwala
Uppaluri, Ms. Apeksha Mehta, Ms. Mounica Kasturi, Sachin Sharma,
H
784 SUPREME COURT REPORTS [2021] 3 S.C.R.

A Rupender Sinhmar, K. Gurumurthy, Ms. Udita Singh, Advs. for the
Appellant.
Sanjay Jain, ASG, N. Venkataraman, ASG, A.K.Panda, Sr. Adv.,
Ms. Nisha Bagchi, Merusagar Samantaray, Shovan Mishra, B.V.
Balramdas, B. Krishna Prasad, Advs. for the Respondent.
B The Judgment of the Court was delivered by
S. A. BOBDE, CJI
1. This batch of statutory appeals (being Civil Appeal Nos. 1827/
2018, 1875/2018, 1832/2018 and 3213/2018) under Section 130E of the
C Customs Act, 1962 arises from a common final order of the Central
Excise and Service Tax Appellate Tribunal (‘CESTAT’) dated 19th
December 2017 (‘impugned order’).
2. Vide the impugned order an exemption of basic customs duty
accorded to the Digital Still Image Video Cameras (‘DSIC’) imported
D by the Nikon India Pvt. Ltd, Canon India Pvt. Ltd., Sony India Pvt. Ltd.
and Samsung India 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
E 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 we shall 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
F
the basis that they were exempted from levy of basic Customs duty
under Notification No.15/2012, the proceedings initiated by the Directorate
of Revenue Intelligence for recovery of duty not paid under Section
28(4) of the Customs Act, 1962 are valid in law.
Exemption Notification
G
5. Exemption to Digital Still Image Video Cameras was issued on
1.3.2005 vide Notification No.25/2005 (and amended vide Notification
No.15/2012 on 17.3.2012).
Arrival and decision to clear the goods on payment of nil
H duty
M/S CANON INDIA PRIVATE LIMITED v. COMMISSIONER 785
OF CUSTOMS [S. A. BOBDE, CJI]

6. The consignment of cameras arrived at Delhi on 15.3.2012. A
The importer submitted a Bill of Entry to the Customs Authorities on
20.3.2012. Along with the Bill of Entry, the importer submitted a covering
letter and literature containing specifications of the cameras. After
verification of the Bill of Entry by the Inspector and the Superintendent,
the importer requested the Deputy Commissioner of Customs for a first
B
check on 21.3.2012. The Customs Authorities checked the goods on
24.3.2012. They compared the goods with the description given in the
literature and took a decision to clear the goods on 24.3.2012, as being
exempt from duty in terms of the Notification No.15/2012 which was
issued on 17.3.2012.
Recovery of Duties C

7. On 19.8.2014, a show cause notice was issued under
Section 28 (4) of the Customs Act, 19621 alleging that the Customs
Authorities had been induced to clear the cameras by wilful mis-statement
and suppression of facts about the cameras. In particular; that the cameras
were capable of recording more than a single video sequence of less D
than 30 minutes. In other words, after one sequence of less than 30
minutes was recorded, the camera had sufficient memory (extendable)
to record more such sequences.
8. It is significant to note that while the decision to clear the goods
for import because they were exempted from customs duties under E
Notification No.15/2012, was taken by Deputy Commissioner, Appraisal
Group, Delhi Air Cargo, the show cause notice was issued by the
Additional Director General, Directorate of Revenue Intelligence.
9. The question that arises is whether the Directorate of Revenue
Intelligence had authority in law to issue a show cause notice under F
1
Section 28 (4) Where any duty has not been [levied or not paid or has been short-
levied or short-paid] or erroneously refunded, or interest payable has not been paid,
part-paid or erroneously refunded, by reason of, -
(a) collusion; or
(b) any wilful mis-statement; or
(c) suppression of facts,
G
by the importer or the exporter or the agent or employee of the importer or
exporter, the proper officer shall, within five years from the relevant date, serve notice
on the person chargeable with duty or interest which has not been [so levied or not
paid] or which has been so short-levied or short-paid or to whom the refund has
erroneously been made, requiring him to show cause why he should not pay the
amount specified in the notice. H
786 SUPREME COURT REPORTS [2021] 3 S.C.R.

A Section 28(4) of the Act for recovery of duties allegedly not levied or
paid when the goods have been cleared for import by a Deputy
Commissioner of Customs who decided that the goods are exempted. It
is necessary that the answer must flow from the power conferred by
the statute i.e. under Section 28(4) of the Act. This Section empowers
the recovery of duty not paid, part paid or erroneously refunded by reason
B
of collusion or any wilful mis-statement or suppression of facts and confers
the power of recovery on “the proper officer”. The obvious intention is
to confer the power to recover such duties not on any proper officer but
only on “the proper officer”. This Court in Consolidated Coffee Ltd.
and Another vs. Coffee Board, Bangalore2 has held:-
C “14. ...Secondly, and more importantly, the user of the definite
article ‘the’ before the word ‘agreement’ is, in our view, very
significant. Parliament has not said ‘an agreement’ or ‘any
agreement’ for or in relation to such export and in the context
the expression ‘the agreement’ would refer to that agreement
D which is implicit in the sale occasioning the export.”
In Shri Ishar Alloy Steels Ltd. vs. Jayaswals Neco Ltd.3 has
held:-
“9. ...’The’ is the word used before nouns, with a specifying
or particularising effect as opposed to the indefinite or
E generalizing force of ‘a’ or ‘an’. It determines what particular
thing is meant; that is, what particular thing we are to assume
to be meant. ‘The’ is always mentioned to denote a particular
thing or a person.”
10. There are only two articles ‘a (or an)’ and ‘the’. `A (or an)’ is
F known as the Indefinite Article because it does not specifically refer to
a particular person or thing. On the other hand, ‘the’ is called the Definite
Article because it points out and refers to a particular person or thing.
There is no doubt that, if Parliament intended that any proper officer
could have exercised power under Section 28 (4), it could have used the
G word ‘any’.
11. Parliament has employed the article “the” not accidently but
with the intention to designate the proper officer who had assessed the
goods at the time of clearance. It must be clarified that the proper officer
2
(1980) 3 SCC 358
3
H (2001) 3 SCC 609
M/S CANON INDIA PRIVATE LIMITED v. COMMISSIONER 787
OF CUSTOMS [S. A. BOBDE, CJI]

need not be the very officer who cleared the goods but may be his A
successor in office or any other officer authorised to exercise the powers
within the same office. In this case, anyone authorised from the Appraisal
Group. Assessment is a term which includes determination of the
dutiability of any goods and the amount of duty payable with reference
to, inter alia, exemption or concession of customs duty vide Section 2 (2)
B
(c) of the Customs Act, 19624.
12. The nature of the power to recover the duty, not paid or short
paid after the goods have been assessed and cleared for import, is broadly
a power to review the earlier decision of assessment. Such a power is
not inherent in any authority. Indeed, it has been conferred by Section 28
and other related provisions. The power has been so conferred specifically C
on “the proper officer” which must necessarily mean the proper officer
who, in the first instance, assessed and cleared the goods i.e. the Deputy
Commissioner Appraisal Group. Indeed, this must be so because no fiscal
statute has been shown to us where the power to re-open assessment or
recover duties which have escaped assessment has been conferred on D
an officer other than the officer of the rank of the officer who initially
took the decision to assess the goods.
13. Where the statute confers the same power to perform an act
on different officers, as in this case, the two officers, especially when
they belong to different departments, cannot exercise their powers in E
the same case. Where one officer has exercised his powers of
assessment, the power to order re-assessment must also be exercised
by the same officer or his successor and not by another officer of another
department though he is designated to be an officer of the same rank. In
our view, this would result into an anarchical and unruly operation of a
statute which is not contemplated by any canon of construction of statute. F

4
Section 2. Definitions – In this Act, unless the context otherwise requires, -
…
(2) “assessment” means determination of the dutiability of any goods and the
amount of duty, tax, cess or any other sum so payable, if any, under this Act or under
the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the Customs G
Tariff Act) or under any other law for the time being in force, with reference to –
(a) …
(b) …
(c) exemption or concession of duty, tax, cess or any other sum, consequent
upon any notification issued therefor under this Act or under the Customs Tariff Act or
under any other law for the time being in force;
H
788 SUPREME COURT REPORTS [2021] 3 S.C.R.

A 14. It is well known that when a statute directs that the things be
done in a certain way, it must be done in that way alone. As in this case,
when the statute directs that “the proper officer” can determine duty
not levied/not paid, it does not mean any proper officer but that proper
officer alone. We find it completely impermissible to allow an officer,
who has not passed the original order of assessment, to re-open the
B
assessment on the grounds that the duty was not paid/not levied, by the
original officer who had decided to clear the goods and who was
competent and authorised to make the assessment. The nature of the
power conferred by Section 28 (4) to recover duties which have escaped
assessment is in the nature of an administrative review of an act. The
C section must therefore be construed as conferring the power of such
review on the same officer or his successor or any other officer who
has been assigned the function of assessment. In other words, an officer
who did the assessment, could only undertake re-assessment [which is
involved in Section 28 (4)].
D 15. It is obvious that the re-assessment and recovery of duties i.e.
contemplated by Section 28(4) is by the same authority and not by any
superior authority such as Appellate or Revisional Authority. It is, therefore,
clear to us that the Additional Director General of DRI was not “the”
proper officer to exercise the power under Section 28(4) and the initiation
of the recovery proceedings in the present case is without any jurisdiction
E and liable to be set aside.
16. At this stage, we must also examine whether the Additional
Director General of the DRI who issued the recovery notice under Section
28(4) was even a proper officer. The Additional Director General can
be considered to be a proper officer only if it is shown that he was a
F Customs officer under the Customs Act. In addition, that he was entrusted
with the functions of the proper officer under Section 6 of the Customs
Act. The Additional Director General of the DRI can be considered to
be a Customs officer only if he is shown to have been appointed as
Customs officer under the Customs Act.
17. Shri Sanjay Jain, learned Additional Solicitor General, relied
G on a Notification No.17/2002 - Customs (NT) dated 7.3.2002 to show
all Additional Directors General of the DRI have been appointed as
Commissioners of Customs. At the relevant time, the Central Government
was the appropriate authority to issue such a notification. This notification
shows that all Additional Directors General, mentioned in Column (2),
H are appointed as Commissioners of Customs.
M/S CANON INDIA PRIVATE LIMITED v. COMMISSIONER 789
OF CUSTOMS [S. A. BOBDE, CJI]

18. The next step is to see whether an Additional Director General A
of the DRI who has been appointed as an officer of Customs, under the
notification dated 7.3.2002, has been entrusted with the functions under
Section 28 as a proper officer under the Customs Act. In support of the
contention that he has been so entrusted with the functions of a proper
officer under Section 28 of the Customs Act, Shri Sanjay Jain, learned
B
Additional Solicitor General relied on a Notification No.40/2012 dated
2.5.2012 issued by the Central Board of Excise and Customs. The
notification confers various functions referred to in Column (3) of the
notification under the Customs Act on officers referred to in Column
(2). The relevant part of the notification reads as follows:-
“[To be published in the Gazette of India, Extraordinary, Part II, C
Section 3, Sub-section (ii)]
Government of India
Ministry of Finance
(Department of Revenue)
Notification No.40/2012-Customs (N.T.) D
New Delhi, dated the 2nd May, 2012
S.O. (E). – In exercise of the powers conferred by sub-section
(34) of section 2 of the Customs Act, 1962 (52 of 1962), the
Central Board of Excise and Customs, hereby assigns the
officers and above the rank of officers mentioned in Column E
(2) of the Table below, the functions as the proper officers in
relation to the various sections of the Customs Act, 1962, given
in the corresponding entry in Column (3) of the said Table: -

F

G

H
790 SUPREME COURT REPORTS [2021] 3 S.C.R.

A 19. It appears that a Deputy Commissioner or Assistant
Commissioner of Customs has been entrusted with the functions under
Section 28, vide Sl. No.3 above. By reason of the fact that the functions
are assigned to officers referred to in Column (3) and those officers
above the rank of officers mentioned in Column (2), the Commissioner
of Customs would be included as an officer entitled to perform the
B
function under Section 28 of the Act conferred on a Deputy Commissioner
or Assistant Commissioner but the notification appears to be ill-founded.
The notification is purported to have been issued in exercise of powers
under sub-Section (34) of Section 2 of the Customs Act. This section
does not confer any powers on any authority to entrust any functions to
C officers. The sub-Section is part of the definitions clause of the Act, it
merely defines a proper officer, it reads as follows:-
“2. Definitions – In this Act, unless the context otherwise
requires, -
…
D
(34) ‘proper officer’, in relation to any functions to be
performed under this Act, means the officer of customs who
is assigned those functions by the Board or the [Principal
Commissioner of Customs or Commissioner of Customs]. “

E 20. Section 6 is the only Section which provides for entrustment
of functions of Customs officer on other officers of the Central or the
State Government or local authority, it reads as follows:-
“6. Entrustment of functions of Board and customs officers
on certain other officers – The Central Government may, by
F notification in the Official Gazette, entrust either conditionally
or unconditionally to any officer of the Central or the State
Government or a local authority any functions of the Board
or any officer of customs under this Act.”
21. If it was intended that officers of the Directorate of Revenue
Intelligence who are officers of Central Government should be entrusted
G
with functions of the Customs officers, it was imperative that the Central
Government should have done so in exercise of its power under Section
6 of the Act. The reason why such a power is conferred on the Central
Government is obvious and that is because the Central Government is
the authority which appoints both the officers of the Directorate of
H Revenue Intelligence which is set up under the Notification dated
M/S CANON INDIA PRIVATE LIMITED v. COMMISSIONER 791
OF CUSTOMS [S. A. BOBDE, CJI]

04.12.1957 issued by the Ministry of Finance and Customs officers who, A
till 11.5.2002, were appointed by the Central Government. The notification
which purports to entrust functions as proper officer under the Customs
Act has been issued by the Central Board of Excise and Customs in
exercise of non-existing power under Section 2 (34) of the Customs
Act. The notification is obviously invalid having been issued by an
B
authority which had no power to do so in purported exercise of powers
under a section which does not confer any such power.
22. In the above context, it would be useful to refer to the decision
of this Court in the case of Commissioner of Customs vs. Sayed Ali
and Another5 wherein the proper officer in respect of the jurisdictional
area was considered. The consideration made is as hereunder:- C

“16. It was submitted that in the instant case, the import
manifest and the bill of entry were filed before the Additional
Collector of Customs (Imports), Mumbai; the bill of entry was
duly assessed, and the benefit of the exemption was extended,
subject to execution of a bond by the importer which was D
duly executed undertaking the obligation of export. The
learned counsel argued that the function of the preventive
staff is confined to goods which are not manifested as in
respect of manifested goods, where the bills of entry are to be
filed, the entire function of assessment, clearance, etc. is E
carried out by the appraising officers functioning under the
Commissioner of Customs (Imports).
17. Before adverting to the rival submissions, it would be
expedient to survey the relevant provisions of the Act. Section
28 of the Act, which is relevant for our purpose, provides for F
issue of notice for payment of duty that has not been paid, or
has been short-levied or erroneously refunded, and provides
that:
“28. Notice for payment of duties, interest, etc. – (1) When
any duty has not been levied or has been short-levied or G
erroneously refunded, or when any interest payable has
not been paid, part paid or erroneously refunded, the
proper officer may,-

5
(2011) 3 SCC 537 H
792 SUPREME COURT REPORTS [2021] 3 S.C.R.

A (a) in the case of any import made by any individual
for his personal use or by Government or by any
educational, research or charitable institution or
hospital, within one year;
(b) in any other case, within six months,
B from the relevant date, serve notice on the person
chargeable with the duty or interest which has not been
levied or charged or which has been so short-levied or
part paid or to whom the refund has erroneously been
made, requiring him to show cause why he should not pay
C the amount specified in the notice:
Provided that where any duty has not been levied or
has been short-levied or the interest has not been charged
or has been part paid or the duty or interest has been
erroneously refunded by reason of collusion or any wilful
D mis-statement or suppression of facts by the importer or
the exporter or the agent or employee of the importer or
exporter, the provisions of this sub-section shall have effect
as if for the words ‘one year’ and ‘six months’, the words
‘five years’ were substituted.”

E 18. It is plain from the provision that the ‘proper officer’ being
subjectively satisfied on the basis of the material that may be
with him that customs duty has not been levied or short levied
or erroneously refunded on an import made by any individual
for his personal use or by the Government or by any
educational, research or charitable institution or hospital,
F within one year and in all other cases within six months from
the relevant date, may cause service of notice on the person
chargeable, requiring him to show cause why he should not
pay the amount specified in the notice. It is evident that the
notice under the said provision has to be issued by the ‘proper
G officer’.
19. Section 2(34) of the Act defines a ‘proper officer’, thus:
‘2. Definitions.-
(34) ‘proper officer’, in relation to any functions to be
performed under this Act, means the officer of customs
H
M/S CANON INDIA PRIVATE LIMITED v. COMMISSIONER 793
OF CUSTOMS [S. A. BOBDE, CJI]

who is assigned those functions by the Board or the A
Commissioner of Customs;’
It is clear from a mere look at the provision that only such
officers of customs who have been assigned specific functions
would be ‘proper officers’ in terms of Section 2(34) the Act.
Specific entrustment of function by either the Board or the B
Commissioner of Customs is therefore, the governing test to
determine whether an ‘officer of customs’ is the ‘proper
officer’.
20. From a conjoint reading of Sections 2(34) and 28 of the
Act, it is manifest that only such a Customs Officer who has
been assigned the specific functions of assessment and re- C
assessment of duty in the jurisdictional area where the import
concerned has been affected, by either the Board or the
Commissioner of Customs, in terms of Section 2(34) of the
Act is competent to issue notice undersection 28 of the Act.
Any other reading of Section 28 would render the provisions D
of Section 2(34) of the Act otiose inasmuch as the test
contemplated under Section 2(34) of the Act is that of specific
conferment of such functions.”
23. We, therefore, hold that the entire proceeding in the present
case initiated by the Additional Director General of the DRI by issuing E
show cause notices in all the matters before us are invalid without any
authority of law and liable to be set-aside and the ensuing demands are
also set-aside.
Limitation
24. It is strictly not necessary to decide the question on limitation
F
but we intend to do so since parties have elaborately relied on disclosures
made before the Customs officer on that issue. The show cause notice
was issued on 19.8.2014. Under Section 28(4), such a show cause notice
must be issued within five years from the relevant date which means the
date on which the goods were assessed and cleared, in case the duty
was not paid or short paid or erroneously refunded by reason of collusion G
or any wilful mis-statement or suppression of facts. It is, therefore,
necessary for us to examine whether there is suppression of facts.
25. The case was presented for scrutiny of the Customs officers
on 20.3.2012 along with the Bill of Entry and literature consisting of
specifications of the cameras. H
794 SUPREME COURT REPORTS [2021] 3 S.C.R.

A 26. The Bill of Entry made a statement that these are Digital Still
Image Video Camera packed for retail sale (COOLPIX S4300, S2600
etc.). This was supported by literature which clearly stated that “… the
single maximum recording time for a single movie is 29 minutes, even
when there is sufficient free space on the memory card for longer
recording”. This meant that even if the camera could record more than
B
29 minutes when it had sufficient free space (which depends on the
capacity of the card providing extended memory) the maximum time for
which it could record a single sequence was 29 minutes.
27. In other words, the camera could record more than one single
sequence but not 30 minutes and more in a single sequence. It is obvious
C that the Deputy Commissioner took the view that the camera complied
with the requirement of exemption i.e. it could only record up to less
than 30 minutes in a single sequence. At this juncture, it is not relevant to
see whether the Deputy Commissioner was right or not in taking this
decision to clear the goods as exempted goods. What is important is to
D see whether the importers made any wilful mis-statement or suppression
of facts and induced the delivery of goods.
28. It is pertinent to note that the importer had asked for a first
check and had shown the cameras and the cameras were offered on
20.3.2012 along with Bill of Entry and literature detailing specifications
E of models. The camera could have been operated to see the length of
time of the single sequence and whether recording of the single sequence
exhausts the total memory of the camera (including extended memory)
and whether the cameras were eligible for exemption. It is difficult in
such circumstances to infer that there was any wilful mis-statement of
facts. In these circumstances, it must, therefore, follow that the extended
F period of limitation of five years was not available to any authority to re-
open under Section 28(4).
29. In this view of the matter, we consider it unnecessary to answer
the issue whether the cameras that were cleared on the basis that they
were exempted from customs duty under Exemption Notification No.15/
G 2012 were in fact eligible for the exemption or not. The goods must be
taken to have been validly cleared by the Customs officer.
30. We might note that cameras with similar specifications have
been treated as exempted under the Explanatory Note to the Combined
Nomenclature of the European communities. It is important to add that
H
M/S CANON INDIA PRIVATE LIMITED v. COMMISSIONER 795
OF CUSTOMS [S. A. BOBDE, CJI]

the same cameras have been considered to be eligible for exemption A
before 17.03.2012 and after 30.04.2015 under the exemption Notifications
issued under the Customs Act read with Chapter 84 & 85 (First Schedule)
of Customs Tariff Act, 1975.
31. In the result, these appeals are allowed. The common order
dated 19.12.2017 passed by the CESTAT, New Delhi in Customs Appeal B
Nos. 50098, 50099, 50100 and 50280/2017 is set aside. Consequently,
the impugned demand notices issued against all the three appellants herein
are also set aside.
32. Parties to bear their own costs.
C
Devika Gujral Appeals allowed.

D

E

F

G

H