2021 (7) TMI 1153 - HC - Customs

Validity of Notifications dated 04.05.2007, 04.05.2007 and 05.09.2006 - issuance of SCN by proper officer - incompetent authority of Jurisdictional Officer or not - HELD THAT - The proper officer is defined as in relation to any functions to be performed under the Act, means the Officer of Customs, who is assigned those functions by the Board or the Commissioner of Customs. Thus, the proper officer is defined so as to include the officer of customs, who is assigned those functions by the Board. In the present case, by invoking the powers under Section 4(1) of the Act, the Board conferred powers to the Commissioner of Central Excise, Goa and authorises him to exercise the powers and discharge the duties conferred or imposed on the Commissioner of Customs, Port Imports, Chennai for the purposes of adjudicating the matters relating to show cause notice. Therefore, it is unambiguous that the Board appointed the Commissioner of Central Excise, Goa as a proper officer under Section 4(1) and the said Commissioner of Central Excise, Goa is empowered to exercise powers of the officers of customs under Section 5 and with reference to the definition of proper officer under Section 2(34) of the Act. Therefore, there is no ambiguity in respect of the powers exercised in the present case. As far as the show cause notices are concerned, the merits are to be adjudicated by the competent authority/the respondent. High Court cannot adjudicate the disputed facts with reference to the documents and evidences to be produced by the respective parties. Thus, the petitioner has to submit their explanations/objections, if any, along with the documents and evidences to the respondents enabling them to consider the same and pass orders by following the procedures as contemplated and by affording opportunity to the writ petitioners. Such an exercise is to be done as expeditiously as possible. In view of the fact that the jurisdiction point raised by the petitioner fails, this Court has no hesitation in forming an opinion that the petitioners have not established the ground of jurisdiction and thus, the petitioners are bound to respond to the show cause notices and on receipt of any such objections/explanations, the respondents are bound to continue the proceedings, conclude the same as expeditiously as possible - Petition dismissed.

Summary

Issues:
Challenging show cause notices dated 26.09.2006, 17.07.2006, and 31.05.2006.
Challenging Notifications dated 04.05.2007, 04.05.2007, and 05.09.2006 issued under Customs Act, 1962.

Analysis:

Challenging Show Cause Notices:
The writ petitions challenged the show cause notices on the ground of jurisdiction, contending that they were not issued by the competent officer. The petitioners argued that the notices lacked jurisdiction as they were issued by the Deputy Director in Goa, while the Commissioner of Customs in Chennai was the proper officer for the petitioner-company. They relied on the judgment of the Supreme Court which emphasized that only officers assigned specific functions in the jurisdictional area could issue such notices.

Interpretation of 'Proper Officer':
The petitioner's counsel referred to the definition of 'proper officer' under the Act and cited a recent Supreme Court judgment affirming that the proper officer is the one having jurisdiction over the person concerned. They argued that the notices were invalid as the Goa officer lacked jurisdiction. However, the respondents contended that the officer in Goa was conferred the necessary powers under the Act, making him the proper officer for issuing the notices.

Impugned Notifications and Board's Powers:
The impugned notifications appointed the Commissioner of Central Excise in Goa as the proper officer to adjudicate matters related to the show cause notices. The Board has the discretion to appoint officers of customs under Sections 4 and 5 of the Act. The Court analyzed the definition of 'proper officer' under Section 2(34) and concluded that the Board's appointment of the Commissioner in Goa was valid, empowering him to act as the proper officer for the case.

Court's Decision:
The Court dismissed the writ petitions, emphasizing that the merits of the case should be adjudicated by the competent authority, not the Court. The petitioners were directed to submit their explanations and objections to the respondents for further proceedings. As the jurisdictional argument failed, the Court held that the petitioners must respond to the notices, allowing the proceedings to continue expeditiously. Ultimately, all writ petitions were dismissed with no costs awarded.

Conclusion:
The judgment clarified the importance of jurisdiction in challenging show cause notices under the Customs Act, emphasizing the role of the proper officer. It highlighted the Board's powers in appointing officers and interpreting the definition of 'proper officer.' The Court's decision focused on allowing the respondents to proceed with the case based on submitted explanations, closing the writ petitions without costs.