2018 (2) TMI 1748 - HC - Customs

Jurisdiction - Proceedings u/s 124 of the Customs Act as initiated by the Directorate of Revenue Intelligence (DRI), Kolkata Zonal Unit - Smuggling of Red Sanders - Held that - This Court is of the view that the submission of Mr. Dey that the petitioner is liable in his capacity as any person to face a penalty under section 124 of the Customs Act does not exclude him from the purview of a proceeding under Section 124 as initiated through the SCN as well as the Supplementary SCN. This Court must further notice the point raised by Mr. Dey that on conclusion of the proceedings, if adverse to the noticees, the DRI is empowered to take steps in terms of Section 124 both against the importer/importers and the petitioner as well as other persons named in the SCN/ Supplementary SCN, who have all allegedly acted not in discharge of their official duties but, as members of a smuggling syndicate. The ends of justice do not call for interdicting the proceedings and, the law, as normally understood, requires the petitioner, in the facts of this case, to participate/cooperate in/with the show cause - interim relief/reliefs stand refused.

Summary

Issues:
1. Proceedings under Section 124 of the Customs Act against a Customs Department officer.
2. Denial of opportunity of personal hearing to the officer.
3. Allegations of involvement in smuggling syndicate against the officer and others.

Analysis:
1. The main issue in this case revolves around the petitioner, an officer of the Customs Department, facing confiscation proceedings under Section 124 of the Customs Act. The petitioner's counsel argued that the provisions of Section 124 pertain to importers and cannot be extended to an officer acting in an official capacity. However, the court found merit in the Revenue's argument that the petitioner, as "any person," can face penalties under Section 124, even if not an importer. The court held that the petitioner, along with others, is under investigation for alleged involvement in a smuggling syndicate, not in an official capacity but as private individuals. The court emphasized that the petitioner must participate in the proceedings initiated through the Show Cause Notice and Supplementary SCN.

2. Another issue raised was the denial of a personal hearing to the petitioner due to arriving late by 10 minutes. The petitioner's counsel contended that this denial was unfair. The court noted that the petitioner's reply is on record, and the issue is under investigation. The court directed that the investigation would consider the petitioner's stand, and the petitioner is required to cooperate with the proceedings, including responding to the show cause.

3. The Supplementary SCN detailed serious allegations against the petitioner and other officers, accusing them of forming a smuggling syndicate and engaging in fraudulent activities. The Revenue argued that the notice is without prejudice to any further action permitted by law. The court acknowledged the gravity of the allegations and the ongoing investigation into the officers' conduct. The court refused interim relief, allowing the DRI to present its position through an affidavit-in-opposition. The court granted specific timelines for filing affidavits and subsequent replies, emphasizing the need for a fair exchange of information before further proceedings.

In conclusion, the judgment upholds the initiation of proceedings under Section 124 against the Customs Department officer, emphasizes the importance of the officer's participation in the investigation, and acknowledges the serious allegations of involvement in a smuggling syndicate, allowing the investigation to proceed further based on the evidence presented.