2012 (5) TMI 476 - AT - Customs

Whether Commissioner of Customs (Preventive), has jurisdiction to issue the show-cause notice - Counsel submits that he was not proper officer as defined under Section 2(34) of the Customs Act inasmuch as there is no documentary material to show that the learned Commissioner had been assigned the function of issuing show-cause notice and adjudicating the same in relation to imports Held that - no evidence has been brought on record by the respondent to show that the Commissioner of Customs (Preventive) was specifically assigned the function of issuing the show-cause notice and adjudicating the same in relation to the subject imports, lack of jurisdiction for the Commissioner of Customs (Preventive) in this case becomes the common ground for allowing all the three appeals, order is set aside, appeals are allowed

Summary

Issues:
1. Jurisdictional objection regarding the Commissioner of Customs (Preventive) issuing show-cause notice.
2. Validity of raising jurisdictional objection at a later stage.
3. Lack of jurisdiction of the Commissioner of Customs (Preventive) to issue show-cause notice.

Analysis:

1. Jurisdictional Objection: The appeals were against the order passed by the Commissioner of Customs (Preventive), Mumbai confirming a duty demand against M/s Nylex Traders under the Customs Act, 1962. Two miscellaneous applications sought to add jurisdictional objections, claiming the Commissioner lacked jurisdiction to issue the show-cause notice. The appellants relied on Supreme Court judgments to support their objection. The learned SDR opposed raising the objection at this stage, arguing it should have been raised earlier. However, the Tribunal allowed the objection based on the precedent that jurisdictional issues can be raised at any stage.

2. Validity of Raising Objection: The Tribunal referred to a Supreme Court case where it was established that objections related to jurisdiction can be raised at any stage of the proceedings. Despite not raising the objection earlier, the appellants were allowed to raise it during the appeal stage. The principle that an objection as to jurisdiction goes to the root of the case favored the appellants, leading to the acceptance of their amendment applications.

3. Lack of Jurisdiction of Commissioner of Customs (Preventive): The main issue addressed was whether the Commissioner of Customs (Preventive), Mumbai had jurisdiction to issue the show-cause notice. The appellants argued that the Commissioner was not a 'proper officer' as defined under the Customs Act, as there was no evidence of the assignment of functions related to issuing show-cause notices for imports through New Custom House, Mumbai. The Tribunal cited a Supreme Court ruling in a similar case where it was held that the Commissioner of Customs (Preventive) lacked the authority to issue show-cause notices without the specific assignment of such functions. As no evidence was presented to show the assignment of functions to the Commissioner, the Tribunal concluded that the lack of jurisdiction of the Commissioner of Customs (Preventive) was a valid ground for allowing the appeals of the importers and setting aside the impugned order against them.

In conclusion, the Tribunal allowed the appeals of the importers based on the lack of jurisdiction of the Commissioner of Customs (Preventive) to issue the show-cause notice, as established by the Supreme Court precedent and the absence of evidence of the assignment of relevant functions.