2022 (12) TMI 20 - HC - Customs

Jurisdiction - power of proper officer to issue SCN - Smuggling - gold biscuits seized from a blue coloured Hyundai car without registration number - Indian currency - rucksacks - bags and various other documents - HELD THAT - In terms of Notification No.26/2022 dated 31.03.2022, CBIT has assigned and declared the Deputy Commissioner or Assistant Commissioner of Customs and officers above them in rank, to be officers in relation to the various functions as specified in Column No.3 of the said Notification No.26/2022. In terms of Notification No.26/2022, the Deputy Commissioner or Assistant Commissioner have been assigned to be the proper officers to issue Notices under the second proviso of Section 124 of the 1962 Act. As such, in terms of Notification No.26/2022, even a Joint Director, DRI, who is above the rank of Deputy Commissioner or Assistant Commissioner of Customs is a proper officer to issue a Notice under the second proviso to Section 124 of the 1962 Act. There is nothing in the Notification No.26/2022 showing that there is a bar on the Joint Director, DRI for issuing a Notice under Section 124 of the 1962 Act. In fact, Section 124 of the 1962 Act provides that no order, confiscating any goods or imposing any penalty on any person, shall be made under Chapter XIV of the 1962 Act, unless the owner of the goods or such person is given a notice in writing, with prior approval of the officer of Customs not below the rank of Assistant Commissioner of Customs, informing him of the ground which it is proposes to confiscate the goods or to impose the penalty. It clearly shows that there is no bar on the Joint Director, DRI to issue a notice under Section 124 of the 1962 Act. In terms of the prayer made by the learned Senior Counsel for the petitioner, the petitioner is given the liberty to file his reply to the show-cause notice dated 23.09.2022 before the Joint Director, DRI, Guwahati, who shall thereafter transmit the same to the Adjudicating Authority under the 1962 Act. The petitioner is given 2 (two) weeks time to submit his reply to the show cause notice, which should be counted from today. Petition dismissed.

Summary

Issues:
1. Jurisdiction of the Joint Director, DRI to issue Show-Cause Notice under Section 124 of the Customs Act, 1962.

Detailed Analysis:
The case involved the seizure of gold biscuits and currency from a vehicle by the Directorate of Revenue Intelligence (DRI). The Joint Director, DRI issued a Show-Cause Notice under Section 124 of the Customs Act, 1962, to the petitioners. The petitioner challenged the Notice, contending that it was issued by the wrong authority, as per Notifications No.25/2022 and No.26/2022. The petitioner argued that only Deputy Commissioner or Assistant Commissioner of Customs were designated as proper officers to issue such notices, not the Joint Director, DRI.

The petitioner's counsel relied on Sections 2(34), 5, and 6 of the Customs Act, 1962, which define the "proper officer" and outline the powers of customs officers. The counsel pointed out that Notifications No.25/2022 and No.26/2022 specified the officers authorized to issue notices under Section 124. The petitioner argued that the Joint Director, DRI, did not fall within the designated officers as per the notifications, hence the Notice should be set aside.

On the other hand, the respondents contended that the Joint Director, DRI, being equivalent to a Joint Commissioner of Customs, had the authority to issue the Show-Cause Notice under Section 124. They argued that the rank of the officer issuing the notice was above that of an Assistant Commissioner of Customs, as required by the section.

The Court examined the relevant provisions of the Customs Act, 1962, particularly Sections 2(34), 5, and 6, which define the role of proper officers and the powers conferred upon them. The Court also reviewed Notifications No.25/2022 and No.26/2022 issued by the Central Board of Indirect Taxes & Customs, which designated officers authorized to issue notices under Section 124.

The Court noted that Notification No.25/2022 invested the Joint Director, DRI, with the powers of a Joint Commissioner of Customs, while Notification No.26/2022 assigned Deputy Commissioner or Assistant Commissioner of Customs as proper officers for issuing such notices. The Court found that the Joint Director, DRI, being above the rank of Deputy Commissioner or Assistant Commissioner, was indeed a proper officer to issue the Show-Cause Notice under Section 124.

In conclusion, the Court upheld the jurisdiction of the Joint Director, DRI, to issue the Show-Cause Notice and dismissed the writ petition. The petitioner was granted the opportunity to respond to the notice within two weeks, following which the matter would be transmitted to the Adjudicating Authority under the Customs Act, 1962.