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2021 (12) TMI 859 - HC - CustomsJurisdiction - Additional Director General of DRI was a proper officer under Section 28 of Customs Act or not - HELD THAT - The proper officer, to whom power is conferred by Section 28 of the said Act and other related provisions would necessarily mean the proper officer, who in the first instance, assessed and cleared the goods, i.e., Apprising Officer of Air Cargo Complex. Therefore, the Additional Director General of DRI, cannot be the proper officer in the facts and circumstances of the case. The Additional Director General of DRI not having, in the first instance, assessed and cleared the goods, he will not be the proper officer for issuance of show cause notice under Section 28(1) of the said Act. The appeal has to fail because the show cause notice originally issued itself would be termed non-est. The entire proceeding in the present case initiated by the Additional Director General of DRI by issuing show cause notice is invalid without any authority of law and is liable to be set aside. Appeal disposed off.
Issues Involved:
1. Whether the catalyst is different from consumable and the denial of benefit to the Respondent is sustainable. 2. Whether the policy will prevail over the customs notification when the Ministry of Finance, Govt. of India has authority to regulate the customs duty benefit. 3. Whether the extended period of limitation is available despite the benefit of notification being availed by willfully mis-declaring the goods. Detailed Analysis: Issue 1: Catalyst vs. Consumable The Tribunal held that the catalyst is different from consumable and therefore denial of benefit to the Respondent is not sustainable. The Court did not find it necessary to delve into this issue in detail due to the resolution of the primary jurisdictional issue. Issue 2: Policy vs. Customs Notification The Tribunal's decision that the policy will prevail over the customs notification was not specifically addressed due to the overriding jurisdictional issue concerning the proper officer's authority. Issue 3: Extended Period of Limitation The Tribunal's decision that the extended period of limitation is not available despite the benefit of notification being availed by willfully mis-declaring the goods was also not specifically addressed due to the jurisdictional issue. Jurisdictional Issue: Proper Officer under Section 28 of the Customs Act, 1962 The core issue revolved around whether the Additional Director General of the Directorate of Revenue Intelligence (DRI) was "the proper officer" to issue a show cause notice under Section 28(4) of the Customs Act, 1962. The Court referenced the Supreme Court's judgment in Canon India Private Limited vs. Commissioner of Customs, which clarified that the term "the proper officer" refers specifically to the officer who initially assessed and cleared the goods or his successor within the same office, not any officer from a different department, even if of the same rank. Arguments by Ms. Cardozo: Ms. Cardozo argued that various notifications (No.31/97-Cus., No.17/2002-Customs, and No.44/2011-Customs) and a circular (No.44/2011-Customs) appointed officers of the DRI as proper officers under Section 28 of the Customs Act. She contended that these notifications were not considered in the Canon India judgment and that the Additional Director General of DRI was indeed a proper officer. Arguments by Mr. Dada: Mr. Dada countered that even if the Additional Director General of DRI was considered a proper officer, he was not "the" proper officer who initially assessed and cleared the goods. He emphasized that the power to review or reassess must be exercised by the same officer who made the initial assessment or his successor, not by an officer from a different department. Court's Conclusion: The Court, referencing the Supreme Court's decision in Canon India, concluded that the Additional Director General of DRI was not "the proper officer" to issue the show cause notice. The proper officer must be the one who initially assessed and cleared the goods or his successor within the same office. The Court found the entire proceeding initiated by the Additional Director General of DRI invalid and without authority of law, rendering the show cause notice non-est. Disposition: The appeal was disposed of accordingly, and the Court did not find it necessary to answer the substantial questions of law framed on 25th June 2014 due to the jurisdictional issue's resolution.
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