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2006 (7) TMI 306 - HC - CustomsDispute in the present case pertains to the show cause notice issued by the Directorate of Revenue Intelligence unit of the customs department on 22-3-93 in respect of the goods admittedly cleared on provisional assessment basis. Tribunal by impugned order held that the show cause notice under Section 28 and 124 of the Customs Act, 1962 would not be maintainable in respect of the provisionally assessed goods. The Tribunal further held that where the case is not covered by provisional assessment, the show cause notice issued by D.R.I. cannot be sustained because they are not the proper officers. - in the light of the Judgment of this Court in the case of Electron Textile Exports (P) Ltd. & Anr. the findings recorded by the Tribunal that the officers of D.R.I. are not entitled to issue show cause notice under Section 28 and 124 of the Customs Act cannot be sustained - However, in view of the finding given by the Tribunal that on the date on which the impugned show cause notice was issued, the goods were provisionally assessed, the impugned notice was not maintainable. Therefore, even if the D.R.I, had jurisdiction to issue show cause notice, in the facts of the present case, since the goods were provisionally assessed, there could not be any short levy and consequently show cause notice on the ground of short levy could not be issued.
Issues:
1. Competency of the show cause notice issued by the Directorate of Revenue Intelligence (DRI) under Sections 28 and 124 of the Customs Act, 1962. 2. Validity of the show cause notice in relation to provisionally assessed goods. 3. Authority of DRI officials to issue show cause notices under Sections 28 and 124 of the Customs Act, 1962. Issue 1: The High Court addressed the competency of the show cause notice issued by the DRI under Sections 28 and 124 of the Customs Act, 1962. The Commissioner of Customs had earlier held the notice to be invalid due to the goods being provisionally assessed and a final assessment order being passed after the notice. The Tribunal had also dismissed the appeal by the revenue, stating that the show cause notice under Section 28 would not be maintainable for provisionally assessed goods. However, the High Court referred to a previous judgment where it was held that DRI officers are entitled to issue show cause notices under Sections 28 and 124 of the Customs Act. The Court acknowledged the error in the Tribunal's decision but ultimately found that since the goods were provisionally assessed when the notice was issued, there could be no short levy, rendering the notice invalid. Issue 2: Regarding the validity of the show cause notice in relation to provisionally assessed goods, the High Court emphasized that despite the DRI officers having the authority to issue such notices, in this specific case, the notice was deemed not maintainable due to the provisional assessment status of the goods at the time of issuance. The Court clarified that even though the DRI officials were empowered to issue the notice, the provisional assessment situation prevented any short levy, making the notice groundless. Issue 3: The Court also examined the authority of DRI officials to issue show cause notices under Sections 28 and 124 of the Customs Act, 1962. While acknowledging the previous judgment affirming the entitlement of DRI officers to issue such notices, the Court highlighted that the Tribunal's finding on the matter was not sustainable due to the provisional assessment status of the goods. The Court concluded that given the lack of short levy in the case due to provisional assessment, there was no need to delve further into the jurisdiction of DRI officials to issue show cause notices. In conclusion, the High Court ruled that while DRI officials are authorized to issue show cause notices under the Customs Act, the specific notice in question was invalid due to the provisional assessment status of the goods, which negated any short levy. The Court found no grounds to challenge the Tribunal's decision further, leading to the dismissal of the case without costs.
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