2017 (9) TMI 601 - HC - Customs

Jurisdiction of impugned order - Section 28-AAA of the Customs Act, 1962 - The case of the petitioner is that the second respondent has arbitrarily impleaded the petitioner as a party to the proceedings without any investigation or enquiry and therefore, continuance of the proceedings under the impugned notice will result in oppression and harassment to the petitioner - Held that - The question as to whether there has been any allegation against the petitioner made by the exporters or not and whether the petitioner has acted bonafidely in having purchased scrips from the exporters are all questions of fact which can be agitated only before the adjudicating authority and not before this Court under Article 226 of the Constitution of India. The question as to whether Section 28 or Section 28-AAA would stand attracted, is also not a pure question of law, but involves adjudication into facts. Therefore, at this juncture, this Court does not propose to interfere with the impugned show-cause notice as if it is done, it would be doing so at the very threshold, which is impermissible - The petitioner has been granted sufficient opportunity to place all the materials and it is well open to the petitioner to raise the legal issues which according to them, are wholly in their favour, and also contest the jurisdictional point before the adjudicating authority by submitting a reply. Hence, this Court is not inclined to entertain the writ petition and quash the show-cause notice at the very threshold. Petition dismissed being not maintainable.

Summary

Issues involved:
Impugned show-cause notice validity under Customs Act, 1962 - Jurisdiction, legality, and validity of notice - Invocation of Section 28-AAA - Allegations against petitioner - Applicability of extended period of limitation.

Analysis:
The petitioner challenged a show-cause notice issued by the second respondent, alleging it was pre-meditated and contrary to the Customs Act, 1962, making it jurisdictionally invalid. The petitioner argued that being arbitrarily impleaded without investigation would lead to oppression and harassment. It was contended that Section 28-AAA of the Customs Act could not be invoked against the petitioner due to prohibitions within the provision itself. The notice was criticized for being vague and arbitrary, lacking specificity on the application of Section 28 to the petitioner, indicating reluctance to proceed against importers.

The petitioner's counsel referred to Section 28-AAA, highlighting that duty recovery would apply only to the person to whom the instrument was issued, not the petitioner. Additionally, invoking the proviso to Section 28(1), it was argued that action under Section 28-AAA should not prejudice action against the importer under Section 28. The absence of allegations against the petitioner, such as collusion or fraud with the exporter, was emphasized, questioning the necessity of invoking Section 28-AAA or Section 114-A of the Customs Act. The petitioner aimed to establish that without such allegations, the notice lacked jurisdiction, precluding the need for an extended period of limitation.

The court noted that the impugned notice was a show-cause notice, not a final order, and involved mixed questions of fact and law. Highlighting that the petitioner was not the sole noticee and extensive investigation had been conducted, the court emphasized that factual issues should be addressed before the adjudicating authority, not the court under Article 226 of the Constitution. The court declined to interfere at the initial stage, allowing the petitioner to respond to the notice, raise legal issues, and contest jurisdiction before the adjudicating authority. Consequently, the writ petition was dismissed, permitting the petitioner to submit a reply to the notice and contest the matter further without costs.