2009 (4) TMI 658 - HC - Indian Laws

Jurisdiction of respondent no. 3 challenged - whether the show cause notice dated 17th/19th November, 2008 is without jurisdiction? Held that - This would not be a fit case for this Court to exercise its extra ordinary jurisdiction. It would be open to the petitioners to raise all contentions available before the respondent no. 3 and it is for the respondent no. 3 to decide the same including lack of jurisdiction. Prima facie, the observations made while dismissing the petition will not stand in the way of the petitioners urging its contentions and it is for respondent no. 3 to decide the matters on merits uninfluenced by our prima facie observations as to jurisdiction.

Issues Involved:
1. Jurisdiction of Respondent No. 3 to issue the show cause notice.
2. Alleged misuse of imported aircraft contrary to the conditions of import exemption.
3. Validity of the show cause notice and subsequent proceedings.
4. Petitioners' contention regarding the subsistence of their permit and compliance with the Aircraft Act and Rules.
5. Respondents' authority to investigate and adjudicate under the Customs Act.

Detailed Analysis:

1. Jurisdiction of Respondent No. 3 to issue the show cause notice:
The petitioners approached the Court arguing that Respondent No. 3 lacked jurisdiction to issue the show cause notice dated 17th/19th November, 2008. The Court examined whether the respondent had the authority to issue the notice under the Customs Act. The petitioners contended that their valid permit under the Aircraft Act and Rules precluded the customs authorities from taking action. However, the Court found that the customs authorities had the jurisdiction to investigate and issue the notice due to the alleged misuse of the aircraft, which was imported duty-free under specific conditions.

2. Alleged misuse of imported aircraft contrary to the conditions of import exemption:
The show cause notice detailed that the aircraft, imported for non-scheduled (passenger) air transport services, was used extensively by the petitioners' directors and their relatives for private purposes. This usage was contrary to the conditions under which the aircraft was imported duty-free. The Court noted that the petitioners had allowed the aircraft to be used by individuals not covered under the non-scheduled (passenger) air transport services, thus prima facie violating the conditions of the customs exemption notification.

3. Validity of the show cause notice and subsequent proceedings:
The petitioners had previously filed a writ petition challenging the confiscation of the aircraft, which was disposed of with an order that the respondents would conduct an enquiry and issue a final order within three months. Following this, the show cause notice was issued. The Court observed that the petitioners had agreed to the issuance of the show cause notice and had subsequently filed a reply. Given these circumstances, the Court found it inappropriate to exercise its extraordinary jurisdiction to intervene at this stage.

4. Petitioners' contention regarding the subsistence of their permit and compliance with the Aircraft Act and Rules:
The petitioners argued that their permit under the Aircraft Act and Rules was still valid and that any violation of the permit conditions should be addressed by the authorities under those provisions. The Court, however, distinguished the roles of the DGCA and the customs authorities, noting that the former deals with operational and safety regulations, while the latter addresses compliance with customs notifications and duty exemptions. The customs authorities had issued the show cause notice based on the alleged misuse of the aircraft, which fell within their jurisdiction.

5. Respondents' authority to investigate and adjudicate under the Customs Act:
The respondents argued that the Commissioner of Customs (Preventive), New Delhi, was the competent authority to investigate and issue the show cause notice based on the alleged violation of customs notification conditions. The Court upheld this position, stating that the customs authorities had the jurisdiction to investigate the alleged misuse of the aircraft and to take appropriate action under the Customs Act, Rules, and Notifications.

Conclusion:
The Court dismissed the petition, holding that the customs authorities had the jurisdiction to issue the show cause notice and investigate the alleged misuse of the aircraft. The petitioners were directed to raise their contentions before Respondent No. 3, who would decide the matter on its merits. The Court emphasized that its observations were prima facie and would not influence the final decision by the customs authorities.

← Previous Next →