2021 (11) TMI 621 - AT - Customs

Jurisdiction - officers of Directorate of Revenue Intelligence (DRI) are competent officers to issue show cause notices, or not - seeking to give permission/No objection certificate to the Applicant to sell Aircraft Beechcraft King B300 (350) against appropriate surety/security - HELD THAT - In the interest of justice, time should be given to Revenue to argue the matter on merits especially in the light of the submission that the matter is covered by the judgment of Hon ble Supreme Court in the case of M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS 2021 (3) TMI 384 - SUPREME COURT . In so far as aircraft is concerned, it has already been released provisionally to the applicant by the Revenue. In the impugned order it has been confiscated and allowed to be redeemed on payment of redemption fine of ₹ 7 crore. It is further ordered that the bank guarantee may be invoked to recover the redemption fine. Now, the applicant is prepared to redeem the aircraft on the same terms, that is, by invocation of the bank guarantee of ₹ 7 crore or payment of ₹ 7 crore towards redemption fine - the interest of Revenue will be adequately covered if this part of the redemption order is allowed pending the final decision. Once the goods are redeemed, they become the property of the applicant and thereafter it is free to sell the aircraft. The aircraft may be redeemed on payment of the redemption fine of ₹ 7 crore by the applicant either in cash or by invocation of the bank guarantee. Upon such redemption, the Deputy Commissioner of Customs (Aircraft G-II), Office of the Commissioner of Customs (Preventive), New Customs House, New Delhi shall issue a permission/no objection certificate to the applicant to sell their aircraft that has been seized as soon as it is redeemed - The matter may be listed for final hearing in the month of January 2022. Application disposed off.

Summary

Issues:
1. Competency of officers of Directorate of Revenue Intelligence to issue show cause notices under Section 28(4) of the Customs Act.
2. Permission to sell the aircraft seized by the Commissioner of Customs (Preventive) under Section 111(o) of the Customs Act.
3. Redemption of the aircraft on payment of redemption fine of ?7 crore.
4. Issuance of permission/no objection certificate to sell the aircraft upon redemption.

Analysis:

Competency of Officers to Issue Show Cause Notices:
The appellant argued that the officers of Directorate of Revenue Intelligence are not competent to issue show cause notices demanding duty under Section 28(4) of the Customs Act, citing a judgment by the Hon'ble Supreme Court in the case of Canon India. The show cause notice in this case was issued by the Commissioner of Customs (Preventive), who was deemed similarly incompetent. The appellant requested the impugned order to be set aside on this ground. The Department sought time to decide on appointing a Special Counsel, leading to an adjournment. The miscellaneous application filed by the appellant sought permission to sell the aircraft seized by the Commissioner of Customs (Preventive).

Permission to Sell Seized Aircraft:
The appellant imported the aircraft under an exemption notification but failed to fulfill certain conditions, leading to its seizure by the Commissioner of Customs (Preventive). A show cause notice was issued, resulting in the confiscation of the aircraft under Section 111(o) of the Customs Act. The Commissioner ordered redemption by paying a fine of ?7 crore or invoking the bank guarantee. The appellant, affected by COVID, found a buyer willing to purchase the aircraft. They agreed to the bank guarantee of ?7 crore being used for redemption and sought permission to sell the aircraft.

Redemption of the Aircraft:
The Tribunal decided to allow redemption of the aircraft on payment of the redemption fine of ?7 crore by the appellant, either in cash or by invoking the bank guarantee. Upon redemption, the Deputy Commissioner of Customs was directed to issue a permission/no objection certificate for the sale of the aircraft. The Tribunal clarified that this decision did not determine the merits of the case and scheduled a final hearing for January 2022.

Conclusion:
The Tribunal disposed of the miscellaneous application, allowing the redemption of the aircraft on payment of the redemption fine of ?7 crore by the appellant and directing the issuance of a permission/no objection certificate for the sale of the aircraft upon redemption. The case was set for a final hearing in January 2022, maintaining the interest of justice and the revenue pending the final decision.