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2004 (6) TMI 58 - AT - CustomsJurisdiction - rejection of the transaction value declared and demanded duty - Whether Additional Director General of DRI has power to issue notice u/s 28 of the Customs Act, 1962 - HELD THAT - According to the assessee it is not sufficient that the Additional Director General, DRI is appointed as Customs Officer equivalent to Collector of Customs. It is further required that by a separate notification he has to be declared as 'proper officer' for functioning u/s 28(1). In the absence of such specific assignment he cannot function as proper officer. We are not able to accept the above contention. An officer of the Customs who has been assigned certain functions which are to be performed under the Act is a 'proper officer'. Such assignment can be done by the Board or the Commissioner of Customs. It is not in dispute that under Notification 19/90 Additional Director General of DRI is appointed to be a Collector of Customs (presently Commissioner of Customs) for the whole of India. Once he is appointed as Collector of Customs, he will have jurisdiction to exercise all the functions which are to be exercised by the Collector of Customs. The notification does not contain any rider in the matter of exercising jurisdiction by the officers of DRI thus appointed as Customs Officers. The only limitation is with reference to the geographical area. In the case of ADG of DRI such limitation is also not there. He has jurisdiction all over India. In the present case, ADG of DRI having been appointed as Customs Collector shall have the powers of a Customs Collector and can discharge functions as 'proper officer' u/s 28(1). We are also of the view in all cases where the officers of DRI are appointed as Customs officers, they will have jurisdiction to discharge functions as a 'proper officer' in relation to matters where Customs officers are notified as 'proper officer'. The question referred is answered as above in favour of the Revenue and against the assessee. The appeals are returned to the regular bench for hearing.
Issues Involved:
1. Jurisdiction of Additional Director General of DRI to issue notice u/s 28 of the Customs Act, 1962. 2. Validity of the order passed by Commissioner of Customs, Jaipur demanding additional duty and penalties. Summary: Issue 1: Jurisdiction of Additional Director General of DRI to issue notice u/s 28 of the Customs Act, 1962 The primary issue before the Larger Bench was whether the Additional Director General (ADG) of DRI has the authority to issue a notice u/s 28 of the Customs Act, 1962. This question arose due to conflicting opinions from different Tribunal Benches. The appellant contended that the ADG of DRI is not a 'proper officer' as defined u/s 2(34) of the Customs Act, which states that a 'proper officer' is an officer of customs assigned those functions by the Board or the Commissioner of Customs. The appellant argued that the ADG of DRI had not been specifically designated as a 'proper officer' to exercise functions u/s 28(1), making the notice invalid. The Revenue countered that a Notification dated 26-4-1990 appointed the ADG of DRI as a Collector of Customs with jurisdiction over the whole of India, thus making him a 'proper officer' as defined u/s 2(34). They argued that no separate notification was required for the ADG to issue notices u/s 28(1). The Tribunal reviewed various decisions, including CC, Bombay v. Poona Roller and Bakeman's Home Products Pvt. Ltd., which supported the appellant's view that the ADG of DRI was not a 'proper officer' for issuing notices u/s 28(1). Conversely, decisions like Durga Prasad v. H.R. Gomes and South India Exports v. Jt. DGFT supported the Revenue's stance that officers of DRI, when appointed as Customs officers, could exercise the powers of a 'proper officer'. The Tribunal concluded that once the ADG of DRI is appointed as a Collector of Customs, he has the jurisdiction to exercise all functions of a Collector, including issuing notices u/s 28(1). The Tribunal held that the ADG of DRI is a 'proper officer' and can issue notices u/s 28(1), thus resolving the issue in favor of the Revenue. Issue 2: Validity of the order passed by Commissioner of Customs, Jaipur demanding additional duty and penalties The appeal also challenged the order passed by the Commissioner of Customs, Jaipur, which rejected the transaction value declared by the appellant and demanded additional duty of Rs. 5,20,729/- u/s 28 of the Customs Act, along with penalties u/s 112(a) and interest u/s 28AB. The proceedings were initiated based on a show cause notice issued by the ADG of DRI. Given the Tribunal's decision on the first issue, affirming the ADG's jurisdiction to issue the notice, the order by the Commissioner of Customs, Jaipur, demanding additional duty and penalties stands validated. Conclusion: The Tribunal ruled that the ADG of DRI is a 'proper officer' with the authority to issue notices u/s 28(1) of the Customs Act, 1962. Consequently, the order passed by the Commissioner of Customs, Jaipur, demanding additional duty and penalties is upheld. The appeals are returned to the regular bench for further hearing.
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