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2016 (9) TMI 928 - AT - CustomsJurisdiction to issue show cause notice - proper officer - confiscation under Section 11(l)(m) & (d) of the Customs Act - imposition of penalties - bank guarantee of ₹ 2 lakhs submitted at the time of provisional release, appropriated towards reduction fine of equal amount - mis-declaration of goods - lighting fixture - Section 28(1)(b) read with Section 124 of the Customs Act, 1962 - Held that - the decision in the case Mangali Impex Ltd. Vs. Union of India & others 2016 (5) TMI 225 - DELHI HIGH COURT is relied upon. The show cause notice is issued prior to the amendment of Act of 2011, with effect from 08.04.2011. The show cause notice issued by the Joint Director-DRI is without jurisdiction - appeal allowed - decided in favor of appellant.
Issues: Jurisdiction of proper officer under Section 28 of the Customs Act for issuing show cause notice. Validity of show cause notice issued by the Additional Director, Directorate of Revenue Intelligence. Effect of Section 28(11) of the Customs Act, 1962.
Analysis: 1. Jurisdiction of Proper Officer under Section 28: The appellant challenged the jurisdiction of the show cause notice issued by the Additional Director, Directorate of Revenue Intelligence, Lucknow Zonal Unit, Lucknow. The appellant contended that the proper officer under Section 28 should be an officer with the power of assessment/re-assessment under Section 17 of the Customs Act. The appellant relied on a ruling of the Hon'ble Delhi High Court in a batch of writ petitions, emphasizing the need for proper assignment of functions to officers designated as proper officers. The High Court's decision highlighted the importance of ensuring that officers exercising jurisdiction are duly authorized and designated as proper officers under the Act. 2. Validity of Show Cause Notice: The show cause notice in question was issued after the goods had been cleared by the Custom Department, alleging mis-declaration of goods imported by the appellant. The notice led to the confiscation of the goods, imposition of penalties on the appellant and other individuals, and the appropriation of a bank guarantee. The appellant argued that the show cause notice lacked jurisdiction as it was issued by an officer who was not the proper officer under Section 28 of the Customs Act. The Tribunal, following the Delhi High Court's ruling, held that the show cause notice issued by the Joint Director-DRI was without jurisdiction, leading to the setting aside of the impugned Order-in-Appeal and Order-in-Original, thereby allowing the appeal with consequential benefits to the appellant. 3. Effect of Section 28(11) of the Customs Act: The Tribunal examined the implications of Section 28(11) of the Customs Act, inserted by the Customs (Amendment and Validation) Act, 2011. The High Court's analysis emphasized the need for clarity in assigning functions to proper officers, especially in the context of retrospective amendments. The Court highlighted the contradiction between different provisions of the Act and the importance of ensuring that officers designated as proper officers have the necessary authority for assessment purposes. The judgment underscored the significance of avoiding overlapping jurisdiction and ensuring proper coordination among officers to maintain the integrity of assessment processes. In conclusion, the Tribunal's decision in this case focused on the jurisdictional aspect of the show cause notice, emphasizing the need for proper designation of officers as proper officers under the Customs Act. The analysis of the High Court's ruling provided valuable insights into the interpretation and application of statutory provisions concerning the jurisdiction and authority of officers in customs matters.
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