2017 (9) TMI 139 - HC - Customs

Validity of SCN - Jurisdiction - challenge to SCN on the ground that it has been issued with a pre-meditated mind, contrary to the provisions of the Customs Act, 1962 - case of petitioner is that the second respondent has arbitrarily impleaded the petitioner as a party to the proceedings without any investigation or enquiry and therefore, continuance of the proceedings under the impugned notice will result in oppression and harassment to the petitioner - Held that - the impugned proceedings is only a show-cause notice and not an order. The points which are canvassed by the petitioner to state that the impugned show-cause notice is without jurisdiction as against the petitioner, is not purely a question of law, but mixed questions of fact and law. It is relevant to note that the petitioner is not the only noticee, but there are 156 other noticees to whom the impugned show-cause notice has been issued. The question as to whether Section 28 or Section 28-AAA would stand attracted, is also not a pure question of law, but involves adjudication into facts. Therefore, at this juncture, this Court does not propose to interfere with the impugned show-cause notice as if it is done, it would be doing so at the very threshold, which is impermissible - petition dismissed being not maintainable.

Summary

Issues:
Impugned show-cause notice validity under Customs Act, 1962, jurisdiction, Section 28-AAA applicability, allegations against petitioner, legal issues, mixed questions of fact and law, extensive investigation, adjudication into facts, maintainability of writ petition.

Analysis:
The petitioner challenged a show-cause notice issued by the second respondent, alleging pre-meditated issuance contrary to Customs Act, 1962, rendering it invalid. The petitioner contended arbitrary inclusion without investigation would lead to oppression. It was argued that Section 28-AAA could not apply as duty recovery should be from the instrument recipient, not the petitioner. The proviso to Section 28(1) was cited to emphasize action against the importer should not prejudice recovery from the instrument recipient. The petitioner stressed the absence of collusion allegations and exporter statements implicating them, questioning the notice's jurisdiction under Section 28-AAA and Section 114-A of the Customs Act, 1962. The petitioner also argued against invoking the extended limitation period due to lack of allegations, further challenging the notice's jurisdiction.

The court noted the show-cause notice was procedural, not final, and involved mixed questions of fact and law. Highlighting 156 other noticees, the court observed no fraud allegations against the petitioner in the extensive 284-page notice. The court emphasized factual issues like allegations from exporters and petitioner's bona fides should be addressed before the adjudicating authority, not in a writ petition under Article 226. The court deemed questions on Section 28 or Section 28-AAA applicability as requiring factual adjudication, declining interference at the initial stage to allow the petitioner to present evidence and contest jurisdictional issues before the adjudicating authority. Consequently, the court dismissed the writ petition, advising the petitioner to respond to the show-cause notice with all factual and legal contentions before the adjudicating authority, without imposing costs.

In conclusion, the court found the writ petition not maintainable due to the nature of factual and legal issues involved, directing the petitioner to address all concerns in their response to the show-cause notice during the adjudication process. The court's decision emphasized the need for a detailed examination of facts and legal arguments before the adjudicating authority, underscoring the importance of due process and proper adjudication in matters concerning jurisdiction and allegations under the Customs Act, 1962.