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2008 (8) TMI 357 - HC - CustomsWhether the Commissioner of Customs (Preventive) was the proper officer having jurisdiction to seize the rig in the Exclusive Economic Zone and whether he was competent to issue a show cause notice and adjudicate the same to demand duties on goods imported assessed and cleared on assessment orders of the proper officer of Customs working in the Bombay Custom House? Held that - Understood in the proper context the area of the District of Greater Mumbai and Kolaba (Raigad) would be their land mass. The areas of districts of coastal States definitely cannot extend into the designated areas of EEZ. The contention therefore urged on behalf of the Revenue that the Collector (Preventive) having been notified as the proper officer for the District of Raigad would have jurisdiction over the notified areas in the EEZ must be rejected. Once the power has been exercised under Section 4 then it is only the proper officer who can only exercise the powers in respect of the areas in respect of which the jurisdiction has been conferred on them. Neither practice would confer jurisdiction nor consent would confer jurisdiction. The finding by the CESTAT in our opinion therefore cannot be faulted. The Appeal preferred is therefore dismissed.
Issues Involved:
1. Jurisdiction of the Commissioner of Customs (Preventive) to seize the rig in the Exclusive Economic Zone (EEZ). 2. Competence of the Commissioner of Customs (Preventive) to issue a show-cause notice and adjudicate demands for duties on goods imported, assessed, and cleared by the proper officer of Customs at the Bombay Customs House. Issue-wise Detailed Analysis: 1. Jurisdiction of the Commissioner of Customs (Preventive) to Seize the Rig in the EEZ: The primary question was whether the Commissioner of Customs (Preventive) had the jurisdiction to seize the rig located in the EEZ. The Tribunal held that the Commissioner (Preventive) did not have concurrent jurisdiction with the Commissioner of Customs (Imports) over the EEZ, as per the notification issued under the Customs Act, 1962. The Tribunal upheld the preliminary objection regarding the lack of jurisdiction. The High Court considered the definition of "India" under Section 2(27) of the Customs Act, which includes territorial waters but not the EEZ. The Court also examined Section 2(34) defining "proper officer" and Sections 4 and 5 regarding the appointment and powers of Customs officers. The Court referred to Notification No. 27/97-Cus. (N.T.), dated 7th July 1997, which designated specific officers for the EEZ. The Court concluded that only the officers notified for the designated zones in the EEZ could exercise jurisdiction, excluding the Commissioner (Preventive). The Court also referenced the Territorial Waters, Continental Shelf, Exclusive Economic Zone, and other Maritime Zones Act, 1976, which grants India sovereign rights over the EEZ but does not make it part of Indian territory. The Court emphasized that jurisdiction over the EEZ is conferred only on specific officers, and the Commissioner (Preventive) was not among them. 2. Competence of the Commissioner of Customs (Preventive) to Issue a Show-Cause Notice and Adjudicate Demands: The second issue was whether the Commissioner (Preventive) was competent to issue a show-cause notice and adjudicate demands for duties on goods imported, assessed, and cleared by the proper officer of Customs at the Bombay Customs House. The High Court reiterated that only the proper officer assigned those functions by the Board or Commissioner of Customs could exercise such powers. The Court examined the statutory framework, including Sections 28 and 124 of the Customs Act, which mandate that only the proper officer can issue notices for short-levied duties and adjudicate confiscations. The Court referred to precedents, including the Supreme Court's decision in Commissioner of Sales Tax, U.P. v. Sarjoo Prasad Ram Kumar, which held that jurisdiction is confined to the area allotted to the officer. The Court also discussed the administrative setup of the Mumbai Customs, where the Commissioner (Preventive) is responsible for anti-smuggling operations but not for the assessment of imported goods in the EEZ. The Court rejected the Revenue's argument that the Commissioner (Preventive) had jurisdiction over the EEZ based on administrative practices or consent, emphasizing that jurisdiction must be conferred by law. Conclusion: The High Court upheld the Tribunal's finding that the Commissioner of Customs (Preventive) did not have jurisdiction over the EEZ and was not competent to issue a show-cause notice or adjudicate demands for duties on goods imported, assessed, and cleared by the proper officer of Customs at the Bombay Customs House. The appeal by the Revenue was dismissed.
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