GST UPDATE No 197 ON Cancellation of Registration- Calcutta HC

A corrigendum in general parlance is a document issued to correct the errors in a document or publication which is already been issued. It is issued to alter minor clerical mistakes occurred while issuing any notice/order. However, the revenue authorities are adopting a practice of using this as a tool for correctly grave lacunae in drafting of notice/orders. Similar practice was followed by revenue authorities recently and the matter reached before the hon’ble Chennai CESTAT in the case of M/S AKR LOGISTICS INDIA PVT LTD. V/S COMMISSIONER OF CUSTOMS wherein it was held that an order for confiscation of goods cannot be made through corrigendum issued to the original order. The decision delivered in this respect is the subject matter of discussion of our present update.

Brief facts are that on receiving specific intelligence, a special team of Chennai–III Commissionerate conducted search at the Kasimedu Fishing Yard garbage area and recovered two white colour thermocol boxes with markings showing airway bill numbers. These boxes were examined and found to contain 490 numbers of Star Tortoises. Investigation revealed that the said consignment was filed vide Shipping Bill dated 5.11.2018 by declaring the goods as ‘Live Mud Crabs’. The shipping bill was filed by Customs Broker M/s. AKR Logistics India Pvt. Ltd. who is the appellant herein. Shri P. Thirumoorthy is the proprietor of the said firm. The exporters name was shown as M/s. Daily Fresh Exports and Imports, Nagapattinam and the goods were destined for Malaysia.

The Counsel of petitioner argued that in the show cause notice there was no proposal as regards to the confiscation of goods. The authorities issued a corrigendum after passing order in original and ordered for confiscation of goods. Consequently, the order was passed beyond the scope of show cause notice and therefore, no penalty can be imposed. Reliance in this regard was placed on the decision of Commissioner (Appeals) in the case of N.B. SANJANA, ASSISTANT COLLECTOR OF CENTRAL EXCISE, BOMBAY AND OTHERS VS. THE ELPHINSTONE SPINNING AND WEAVING MILLS CO. LTD. reported in1978 (2) ELT J399 (SC). Furthermore, it was argued that the seizure of goods was undertaken outside the precincts of Custom Area and therefore, penalties cannot sustain. It was argued that the shipping bills pertains to Chennai VII Commissioner while the search was conducted by Chennai III Commissionerate. Therefore, show cause notice issued based on investigation of Chennai III Commissionerate has no jurisdiction.

The Counsel of revenue argued that the goods are liable for confiscation as per Section 113 of Customs Act and therefore, the error in order in original is rectified by issuing corrigendum in this regard. Further, it was argued that the searches conducted by Chennai III Commissionerate is legal and proper. It was argued that the shipping bill is fake and no KYC documents were furnished. Therefore, penalties should be applicable.

The Court held that only shipping bill was filed and no documents related to KYC were submitted. It was held on perusal of records that the prohibited goods were not exported. Further, on perusal of show cause notice as well, there was no proposal related to confiscation of goods and hence, no penalty can be levied in this respect. The authorities tried to rectify the error by issuing Corrigendum to Order in Original which, however, can be issued only in case of typographical error. It cannot be used to cover the main part of the notice and hence, not acceptable in the eyes of law.

The above decision is a yet another epitome supporting the fact that the revenue authorities can issue corrigendum for rectifying any typographical errors. The same is also clarified by CBIC vide Master Circular No. 96/1/2017-CX. 1 dated 19.01.2017. Issues on similar subject matter had been a matter of discussion in erstwhile GST regime wherein it was held that corrigendum can only be issued in case of clerical and arithmetical errors and accidental slip ups. It is high time that the revenue authorities should make a note of this settled principle failing which will render corrigendum issued as void and illegal in the eyes of Law.

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GST UPDATE No 197 ON Cancellation of Registration- Calcutta HC

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