2018 (7) TMI 449 - AT - Customs

Rectification of Mistake - Jurisdiction of the Additional Director General of D.R.I to issue the SCN - Held that - The assessee herein is the co-noticee before the Adjudicating Authority. The main noticee had already settled the case before the Ld. Settlement Commission and had not disputed the validity of the show cause notice. Therefore, the demand of duty alongwith interest and penalty as raised in the show cause notice has already been merged with the order of the Ld. Settlement Commission in the case of main noticee. The issue of jurisdiction for issue of show cause notice by the D.R.I officer in the present case, cannot be sustained in view of the order of the Settlement Commission. ROM Application dismissed.

Summary

Issues:
Rectification of Mistake in Final Order, Imposition of Penalties on Co-noticees, Jurisdiction of Additional Director General of D.R.I to issue show cause notice, Principles of law relating to the authority of D.R.I Officers.

Rectification of Mistake in Final Order:
The assessee filed a Misc. Application for Rectification of Mistake in the Final Order passed by the Tribunal. The Tribunal dismissed the appeal filed by the appellants, upholding the imposition of penalties on the appellants for evasion of Customs duty. The Tribunal found that the appellants were involved in the evasion of duty, and hence, the penalties were justified. The Tribunal rejected the contention of the appellants that they had no knowledge of the alleged evasion of duty, citing lack of serious attempt to refute the findings of the Adjudicating Authority and mere citation of case laws by the appellants.

Imposition of Penalties on Co-noticees:
The Tribunal held that the Settlement Commission had imposed penalties on the co-noticees in a similar case, justifying the imposition of penalties on the appellants in the present case. The Tribunal found that the penalties imposed on the appellants were justified, as the main noticee had settled the case before the Settlement Commission without disputing the validity of the show cause notice. Therefore, the demand of duty, interest, and penalty had already been merged with the order of the Settlement Commission in the case of the main noticee.

Jurisdiction of Additional Director General of D.R.I to issue show cause notice:
The assessee contended in their ROM application that the Tribunal had been silent on the issue of jurisdiction of the Additional Director General of D.R.I to issue the show cause notice. The assessee referred to a previous Tribunal order in a different case where the Tribunal allowed the appeal by way of remand, considering the principles of law relating to the authority of D.R.I Officers to issue show cause notices. However, the Tribunal in the present case found that the issue of jurisdiction for the show cause notice by the D.R.I officer could not be sustained, as the demand of duty, interest, and penalty had already been merged with the order of the Settlement Commission in the case of the main noticee.

Principles of law relating to the authority of D.R.I Officers:
The Tribunal considered the principles of law relating to the authority of D.R.I Officers to issue show cause notices, as raised by the assessee in their ROM application. The Tribunal found that in the present case, the assessee, as a co-noticee, could not dispute the validity of the show cause notice, as the main noticee had settled the case before the Settlement Commission without challenging the notice. Therefore, the Tribunal rejected the ROM application filed by the assessee, concluding that the issue of jurisdiction for the show cause notice by the D.R.I officer could not be sustained in light of the Settlement Commission's order.

Conclusion:
The Tribunal dismissed the appeal filed by the appellants, upholding the imposition of penalties on the appellants for evasion of Customs duty. The Tribunal found that the penalties were justified, as the appellants were involved in the evasion of duty and the main noticee had settled the case before the Settlement Commission without disputing the validity of the show cause notice. The Tribunal rejected the ROM application filed by the assessee, concluding that the issue of jurisdiction for the show cause notice by the D.R.I officer could not be sustained based on the Settlement Commission's order.