2018 (8) TMI 187 - HC - Customs

Jurisdiction - power to issue SCN - adjudication of SCN issued to the petitioner by the Commissioner of Customs of various states - N/N. 60 of 2015-cus (NT) dated 04.06.2015 - Held that - N/N. 60 of 2015-cus (NT) dated 04.06.2015 states that in exercise of the powers conferred by clause (a) of Section 152 of the Customs Act 1962 (52 of 1962) the Central Government has given directions that the powers of CBEC under Sections 4 and 5 of the said Act may be exercised also by the Principal Director General Directorate General of Revenue Intelligence New Delhi for appointing officers of the rank of Commissioner of Customs or Additional Director General of the said Directorate for the purpose of adjudication of cases investigated by that Directorate - the notification does not speak of delegation of powers of CBEC to the Principal Director General of the Directorate General of Intelligence but it says that such power of the Board under Sections 4 and 5 of the Customs Act 1962 may be exercised also by the Principal Director General of the Directorate General of Intelligence. Therefore the assumption of the petitioner is in correct. Admittedly the Deputy Director of DRI is an officer who is higher in rank than the Deputy Commissioner - Deputy Director or Assistant Director of Directorate General of Revenue Intelligence and Directorate General of Central Excise Intelligence are entitled to function as proper officers under Section 28 B and Section 72. This Court is of the considered view that the impugned communication sent by the Deputy Director is in consonance with the notification issued and there is no reason for questioning the notification on the grounds raised by the petitioner - petition dismissed.

Summary

Issues:
Challenge to appointment of Common Adjudicating Authority (CAA) by Deputy Director, Jurisdiction of Principal Director General of Directorate General of Revenue Intelligence, Validity of Circular No.18/2015-cus, Challenge to show cause notice, Jurisdiction of Deputy Director of DRI, Interpretation of Notification No.40 of 2012-Customs (N.T.), Comparison with Kolkata High Court decision in Navneet Kumar case.

Analysis:

1. Challenge to Appointment of CAA: The petitioner challenged the appointment of a Common Adjudicating Authority (CAA) by the Deputy Director, claiming it to be without jurisdiction. The Deputy Director appointed the Additional Director General (Adjudication), DRI-Mumbai, as the CAA based on guidelines issued by CBEC. The petitioner argued that the appointment was invalid, but the court found the appointment to be in line with the guidelines and dismissed the challenge.

2. Jurisdiction of Principal Director General: The notification delegated powers to the Principal Director General of Directorate General of Revenue Intelligence to appoint officers for adjudication of cases investigated by DRI. The petitioner contended that this delegation was improper. However, the court clarified that the notification did not delegate CBEC's powers but allowed the Principal DG to exercise them. The court upheld the validity of the notification and guidelines issued for the appointment of CAA.

3. Validity of Circular No.18/2015-cus: Circular No.18/2015-cus provided guidelines for the appointment of CAA in cases involving duty of ?5 Crores and above. The court emphasized that these guidelines aimed at expediting decision-making and benefiting trade and revenue. Since the petitioner's cases fell within this category, the appointment of ADG (Adjudication), DRI-Mumbai, as CAA was deemed appropriate.

4. Challenge to Show Cause Notice: The petitioner questioned the jurisdiction of the show cause notice issued by the Deputy Director. The court noted that the notice sought confiscation under specific sections of the Customs Act, indicating jurisdiction. Although the petitioner raised objections, the court refrained from delving further into the issue as the notice itself was not challenged.

5. Jurisdiction of Deputy Director of DRI: The petitioner argued that the Deputy Director's rank was higher than that required for issuing the show cause notice. However, the court clarified that the Deputy Director was authorized to act as a proper officer under relevant sections of the Customs Act, dismissing the jurisdictional challenge.

6. Interpretation of Notification No.40 of 2012-Customs (N.T.): The petitioner referenced Notification No.40 of 2012 to challenge the show cause notice's jurisdiction. The court explained that the notification empowered certain officers to perform duties under specific sections of the Customs Act, rejecting the petitioner's interpretation that limited the officers' powers.

7. Comparison with Kolkata High Court Decision: The petitioner cited a Kolkata High Court decision regarding a similar challenge to a show cause notice. However, the court distinguished the present case as the petitioner did not challenge the notice itself, unlike the case in Kolkata. The court highlighted the differences in the legal arguments presented.

In conclusion, the court dismissed the writ petition, upholding the appointment of the CAA and the validity of the notifications and guidelines issued by the CBEC. The court emphasized adherence to the established procedures and guidelines in adjudicating customs cases, ensuring expeditious resolution and upholding the interests of trade and revenue.