2017 (11) TMI 1983 - AT - Customs

Jurisdiction - Customs authorities have jurisdiction over the SEZ irrespective of any provision in SEZ Act or not - HELD THAT - On the previous occasion it was observed that necessary rule under Section 21 of the SEZ Act 2005 was framed and notified in Gazette of India on 5-8-2016 to take cognizance the offence committed under Section 111 of the Customs Act 1962 to be an offence committed under SEZ Act 2005. It is well-settled position of law that no penalty can be imposed on commitment of an alleged offence under Customs Act 1962 without authority of law prior to 5-8-2016 to take cognizance thereof under SEZ Act - If contention of the Revenue is accepted that shall bring chaos to the implementation provisions of the SEZ Act prior to coming into force thereof. While notification is part of statute it cannot be said that without such notification there was power vested on Customs authorities to penalize an action not cognizable under SEZ Act 2005. On such legal premise all appeals are allowed. It is also settled principle of law that the Gazette being an official document of the Government to convey its intention and decision without such decision it cannot be presumed that the authorities were vested with the power before the date of issuance of such notification - Appeal allowed.

Summary

Issues: Jurisdiction of Customs authorities in SEZ, Notification under SEZ Act, 2005, Penalties under Customs Act

Jurisdiction of Customs authorities in SEZ:
The case revolved around the jurisdiction of Customs authorities in Special Economic Zones (SEZs). The Revenue argued that Customs authorities had jurisdiction over SEZs despite any specific provision in the SEZ Act. However, the Tribunal had previously held that without a competent notification under the SEZ Act, any offence under the Customs Act could not be penalized under the SEZ Act. The Tribunal emphasized the necessity of a notification under the SEZ Act to confer jurisdiction on Customs authorities over SEZs for penalizing offences.

Notification under SEZ Act, 2005:
The Tribunal noted that a necessary rule under Section 21 of the SEZ Act was framed and notified in the Gazette of India on 5-8-2016. This notification was crucial in enabling the SEZ Act to take cognizance of offences committed under the Customs Act. The Tribunal highlighted that prior to this notification, no penalty could be imposed for offences under the Customs Act without the authority of law to take cognizance under the SEZ Act.

Penalties under Customs Act:
The Tribunal rejected the Revenue's contention that Customs authorities could penalize actions not cognizable under the SEZ Act before the notification came into force. It emphasized that without the necessary notification, Customs authorities did not have the power to penalize actions under the SEZ Act. The Tribunal stressed the importance of the Gazette as an official document conveying the government's decisions, stating that the authorities could not be presumed to have such power before the issuance of the notification.

In conclusion, the Tribunal allowed all appeals based on the legal premise that Customs authorities required a valid notification under the SEZ Act to penalize offences committed in SEZs under the Customs Act. The judgment underscored the significance of legal authority and notification in conferring jurisdiction and imposing penalties in SEZs, ensuring compliance with statutory provisions.