2022 (6) TMI 317 - AT - Customs

Application for admission of additional grounds - Challenging the Jurisdiction - proper officer to issue SCN - whether DRI is proper officer to issue SCN or not - time limitation - whether the plea of jurisdiction sought to be raised at this stage is hit by the delay and latches in taking the plea or not? - HELD THAT - Admittedly in the present case the plea of the jurisdiction was not raised by the applicants before the original authority. He has made his submissions before the original authority, without raising this issue at any time, since the issuance of the show cause notice to him in the year 2009. Now having failed before the original authority applicant has by way of this application sought to raise this ground at this stage. Such an approach cannot be allowed. In the case of STATE OF ORISSA ANR VERSUS MAMATA MOHANTY 2011 (2) TMI 1371 - SUPREME COURT Hon ble Apex Court clearly rejected that the plea the ground not taken earlier can be taken on the basis of the decision in case of some other person without proper explanation of delay in taking the said ground. The observations have been made in respect of the Finance Bill, 2022 which was under the consideration of parliament and have been made in respect of the proposal introduced in the parliament much after the conclusion of hearing. Thus department was not allowed any opportunity of hearing on the pleas which have never been advanced by any of the parties. The while arriving at the said finding the bench has ignored the provisions of Section 97 completely, whereby by the Act, the actions taken have been validated by the will of Parliament. Hence the decisions rendered contrary to the express intent of Section 97 is per incuriam. In absence of proper explanation on the delay in latches in advancing this plea, there are no merits found in these applications - The miscellaneous applications seeking additional ground to be taken are dismissed.

Issues Involved:
1. Validity of Show Cause Notice issued by DRI officers.
2. Jurisdictional challenge raised at appellate stage.
3. Impact of Finance Act, 2022 on actions taken by DRI officers.
4. Consideration of delay and laches in raising jurisdictional challenges.

Issue-wise Detailed Analysis:

1. Validity of Show Cause Notice issued by DRI officers:
The applicants argued that the Show Cause Notice (SCN) dated 25.03.2009 was not issued by a "proper officer" as defined under the Customs Act, 1962. They relied on the Supreme Court's decision in Canon India Pvt. Ltd. v. Commissioner of Customs, which held that DRI officers are not proper officers to issue SCNs under the Customs Act. The tribunal noted that the SCN was issued by the Additional Director General of DRI, which was found invalid in the Canon India case. However, the tribunal also considered the amendments introduced by the Finance Act, 2022, which validated actions taken by DRI officers.

2. Jurisdictional challenge raised at appellate stage:
The applicants raised the jurisdictional issue for the first time at the appellate stage. The tribunal referred to several Supreme Court decisions, including Mamata Mohanty and Remington Rand of India Ltd. v. Thiru R. Jambulingam, which held that jurisdictional challenges cannot be raised for the first time in appellate proceedings if the party had accepted the jurisdiction and participated in the proceedings without objection. The tribunal emphasized that the applicants had not raised the jurisdictional issue before the original authority and had participated in the proceedings since 2009.

3. Impact of Finance Act, 2022 on actions taken by DRI officers:
The tribunal highlighted the amendments made by the Finance Act, 2022, which validated actions taken by DRI officers. Section 97 of the Finance Act, 2022, explicitly declared that actions taken under various chapters of the Customs Act by DRI officers are valid, notwithstanding any contrary court decisions. The tribunal noted that the Finance Act, 2022, effectively overruled the Canon India judgment by validating the actions of DRI officers, including the issuance of SCNs.

4. Consideration of delay and laches in raising jurisdictional challenges:
The tribunal considered the delay and laches in raising the jurisdictional challenge. The applicants had not raised the issue before the original authority and sought to raise it at the appellate stage, many years after the SCN was issued. The tribunal referred to the Supreme Court's decision in Kedar Shashikant Deshpande v. Bhor Municipal Council, which held that a party cannot challenge the jurisdiction of an authority in appellate proceedings if they had submitted to the jurisdiction earlier. The tribunal concluded that the applicants' delay in raising the jurisdictional issue was not justified.

Conclusion:
The tribunal dismissed the miscellaneous applications seeking to take additional grounds in the appeal. The tribunal held that the jurisdictional challenge could not be raised at the appellate stage due to delay and laches. Furthermore, the amendments made by the Finance Act, 2022, validated the actions taken by DRI officers, including the issuance of SCNs. The tribunal's decision was pronounced in the open court.

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