2018 (11) TMI 715 - HC - Customs

Jurisdiction - power of DRI to issue SCN - Smuggling - Section 124 of the Customs Act - Held that - No effect will be given to any finding in the impugned judgement and order that would divest the Directorate Revenue Intelligence Officer of powers to function as a Customs Officer or to investigate cases and issue and adjudicate show cause notices for contravention of the relevant law. List the appeal for hearing on 28th November, 2018.

Summary

Issues Involved:
1. Validity of show cause notice issued by Directorate of Revenue Intelligence.
2. Authority of Additional Director General to issue show cause notices.
3. Allegation of pre-determined mind in issuing the notice.

Validity of Show Cause Notice:
The judgment dealt with the challenge against the show cause notice issued by the Directorate of Revenue Intelligence under Section 124 of the Customs Act. The main argument was that the notice was not issued by an officer of customs not below the rank of an Assistant Commissioner of Customs, as required by the Act. The respondents contended that the Additional Director General, who issued the notice, was not a Customs officer. The appellant, on the other hand, argued that notifications empowered Directorate of Revenue Intelligence officers to act as Customs officers, making the notice valid. The Court noted the provisions of the Customs Act and the notifications, emphasizing the ostensible authority of the officer issuing the notice. The appeal raised a substantial question of law regarding the validity of the notice.

Authority of Additional Director General:
Another issue raised was the authority of the Additional Director General to issue the show cause notices. The respondents argued that any notification conferring Directorate of Revenue Intelligence officers with Customs officer powers was illegal. They cited a notification by the Government of India regarding appointments to the post of Assistant Commissioner in the Indian Customs and Central Excise Service. The appellant, however, contended that the officer had ostensible authority based on the relevant provisions and notifications. The Court acknowledged the need to determine the actual authority of the officer in question and highlighted the presumption of regular government actions unless rebutted.

Allegation of Pre-Determined Mind:
The judgment also addressed the allegation of a pre-determined mind in issuing the show cause notice. The appellant argued that the notice was meant to be adjudicated by a higher-ranking officer, rendering the allegation baseless. The Court observed that the issue of pre-disposition would be addressed in the appeal. It emphasized the need to hear the appeal expeditiously, dispensing with formalities and maintaining status quo regarding the adjudication of the show cause notices until the appeal's conclusion. The judgment aimed to prevent any adverse impact on the Directorate of Revenue Intelligence Officer's powers pending the appeal's resolution.

In conclusion, the High Court of Calcutta's judgment delved into the validity of the show cause notice issued by the Directorate of Revenue Intelligence, the authority of the Additional Director General to issue such notices, and the allegation of a pre-determined mind in issuing the notice. The Court highlighted the legal arguments presented by both parties, focusing on the relevant provisions of the Customs Act and notifications governing the appointment and powers of Customs officers. The judgment aimed to address the substantial legal questions raised by the appeal promptly while ensuring the maintenance of the status quo regarding the show cause notices until the appeal's finalization.