2015 (1) TMI 629 - HC - Central Excise

Challange to Show Cause Notice - Power of Additional Director General of Revenue Intelligence to issue the subject show cause notice - Held that - Petition rejected - But it will be open for the writ petitioner to raise either of the above two objections before the Commissioner of Customs. Mr. Chowdhury submits that he should decide these objections as preliminary issues. In my opinion, it will be up to the adjudicating authority to decide, whether to resolve these issues as preliminary issues or to resolve them along with other issues involved in the show cause notice. - Decided against Petitioner.

Summary

Issues:
1. Jurisdiction of the Additional Director General of Revenue Intelligence to issue the show cause notice.
2. Alleged breach of conditions leading to duty liability, penalty, and confiscation of goods under Section 111[O] of the Customs Act, 1962.

Analysis:
1. The petitioner contended that the Additional Director General of Revenue Intelligence lacked the authority to issue the show cause notice. The notice was challenged under Sections 28 and 124 of the Customs Act, 1962. The petitioner argued that duty had been levied and subsequently remitted due to the petitioner's eligibility for import credit under a specific policy. However, the Revenue alleged a breach of conditions, leading to potential confiscation of goods and imposition of duties and penalties. The court did not stay the adjudication of the notice but allowed the petitioner to raise objections before the Commissioner of Customs. The court held that the adjudicating authority would determine whether to address these objections as preliminary issues or along with other matters in the show cause notice.

2. The show cause notice referred to Section 111[O] of the Customs Act, 1962, indicating a potential breach of conditions related to a specific trade policy. The petitioner's entitlement to duty-free benefits was subject to meeting certain export turnover conditions. The Revenue claimed a violation of these conditions, leading to potential liabilities for the petitioner and its directors. The court directed the Commissioner to provide the petitioner with an opportunity to respond to the show cause notice by a specified date. All issues were to be considered open before the Commissioner, allowing for a comprehensive review of the case.

In conclusion, the judgment addressed the jurisdictional aspect of the show cause notice issuance and the alleged breach of conditions under the Customs Act, 1962. It emphasized the role of the adjudicating authority in determining the resolution of objections raised by the petitioner and the need for a ruling on the issues before the adjudication process. The court's decision provided clarity on the procedural steps to be followed in response to the show cause notice, ensuring a fair opportunity for the petitioner to present their case before the Commissioner of Customs.