9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (6) TMI 723 - HC - CustomsJurisdiction - power of DRI to issue SCN - Proper Officer - It is the uniform submission of the respective counsel for the petitioners in the respective writ petitions is that the impugned proceedings under the respective Show Cause Notices as also the respective impugned Order-in-Originals are without jurisdiction as they emanate from a person who is not a proper officer within the meaning of Section 2(34) of the Customs Act, 1962. HELD THAT - What was implicit in the provisions of the Customs Act, 1962 has been now made by explicit in the amendment to the Customs Act, 1962 vide amendment in Finance Act, 2022. Therefore, these writ petitions are liable to be dismissed by giving liberty to the petitioners to work out their remedy before the alternate forum. Thus, under the Customs Act, 1962, there are different Power Centres for appointing persons as Officers of Customs for discharging their powers and functions (duties) imposed under the Act. The contours of powers to be exercised by such Officers of Customs is to be drawn by the Board. Section 3, of the Customs Act, 1962, recognizes the classes of Officers of Customs . It also includes such other classes of Officers of Customs who may be appointed for the purpose of the Act by the Board - Under Sub-Section 2 to Section 4, the Board can also authorize the officers mentioned therein to appoint Officers of Customs below the rank of the Assistant Commissioner of Customs. Officers from Group-B who are already from the Customs Department can be appointed as Officers of Customs . Similarly, the Officers of Directorate of Revenue Intelligence (DRI) are appointed as Officers of Customs under notification issued under Section 4(i) of the Customs Act, 1962 - Apart from the above, the Central Government may by notification can also entrust the function of the Board or any Officers of Customs under the Customs Act, 1962, on any other officer from any other department, viz., the Central Government, the State Government or the Local Authority either conditionally or unconditionally. Thus, under Section 6 of the Customs Act, 1962, the powers and functions(duties) of the Board and/or Officers of Customs specified in Section 5 read with Section 4 and notifications issued there under to implement the same can be entrusted on these officers. The challenges to the impugned Show Cause Notices and the Orders in Original on the strength of the decision of the Hon'ble Supreme Court in M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS 2021 (3) TMI 384 - SUPREME COURT fail. It is made clear that in case the respondent(s) want(s) to rely on the statement of person who may have given statement against the petitioner, such person shall be produced for cross examination by the petitioner - In case such person is not available for cross -examination, the respondent shall pass orders on merits by applying the principle of preponderance of probability and decide the case. Needless to state, the petitioner shall be heard before final orders are passed. The respective petitioners are at liberty to file their reply and written submission within a period of 30 days from the date of receipt of a copy of this order. In case the petitioner(s) fail(s) to file their reply within such time or within such extended time as may be allowed by the jurisdictional adjudicating authority, order shall be passed based on the available records and materials. It is made clear that in case the respondent wants to rely on the statement of person who may have given statement against the petitioner, such person shall be produced for cross examination by the petitioner - In case such person is not available for cross -examination, the respondent shall pass orders on merits by applying the principle of preponderance of probability and decide the case. Needless to state, the petitioner shall be heard. The petitioner is also directed cooperate with the respondent in the de novo proceeding, failing which, the respondent is at liberty to pass appropriate orders on merits based on the available material.Appeal allowed in part by way of remand.
Issues Involved:
1. Jurisdiction of Directorate of Revenue Intelligence (DRI) officers to issue Show Cause Notices (SCNs) and Orders-in-Original (OIOs). 2. Impact of Finance Act, 2022 on the Customs Act, 1962. 3. Validity of SCNs and OIOs issued by DRI officers. 4. Requirement of cross-examination of witnesses in adjudication proceedings. 5. Applicability of Supreme Court decisions in Canon India Private Limited and Commissioner v. Sayed Ali. Issue-Wise Detailed Analysis: 1. Jurisdiction of DRI Officers to Issue SCNs and OIOs: The petitioners argued that the SCNs and OIOs issued by DRI officers were without jurisdiction as they were not "proper officers" under Section 2(34) of the Customs Act, 1962. This argument was based on the Supreme Court's decision in Canon India Private Limited Vs. Commissioner of Customs, which held that DRI officers were not proper officers for issuing SCNs under Section 28 of the Customs Act. The Court noted that the DRI officers had already been appointed as officers of customs under various notifications issued under Section 4(1) of the Customs Act, 1962. Therefore, the DRI officers were competent to issue SCNs and adjudicate them. 2. Impact of Finance Act, 2022 on the Customs Act, 1962: The Finance Act, 2022 amended the Customs Act, 1962, explicitly recognizing DRI officers as officers of customs. Section 97 of the Finance Act, 2022, validated actions taken by customs officers, including DRI officers, before the commencement of the Finance Act, 2022. This validation applied to pending proceedings, which had to be completed in accordance with the amended provisions of the Customs Act, 1962. The Court held that the challenges to the SCNs and OIOs based on the jurisdiction of DRI officers failed due to the validations in Section 97 of the Finance Act, 2022. 3. Validity of SCNs and OIOs Issued by DRI Officers: The Court noted that the SCNs and OIOs issued by DRI officers were valid as they were appointed as officers of customs under Section 4(1) of the Customs Act, 1962. The Court also observed that the amendments to Section 17 of the Customs Act, 1962, with effect from 08.04.2011, introduced self-assessment of Bill(s) of Entry and Shipping Bill(s) by importers and exporters. The proper officer could only verify and re-assess the self-assessment. The Court held that the proper officer at the port became functus officio after accepting the self-assessment or passing a speaking order on re-assessment. Therefore, the SCNs and OIOs issued by DRI officers were valid. 4. Requirement of Cross-Examination of Witnesses in Adjudication Proceedings: The Court held that where reliance was placed on the statements of third parties who were not produced for cross-examination, the impugned OIOs were quashed and remitted back to the adjudicating authority to pass a fresh order. The adjudicating authority was directed to produce such witnesses for cross-examination or pass orders based on independent evidence if the witnesses were unavailable. 5. Applicability of Supreme Court Decisions in Canon India Private Limited and Commissioner v. Sayed Ali: The Court observed that the decision in Canon India Private Limited was based on the provisions of the Customs Act, 1962, as they stood before the amendments introduced by the Finance Act, 2011. The amendments to Section 17 of the Customs Act, 1962, introduced self-assessment of Bill(s) of Entry and Shipping Bill(s) by importers and exporters, which was not considered in the Canon India Private Limited case. The Court held that the decision in Canon India Private Limited required reconsideration in light of the amendments to the Customs Act, 1962, and the validation in Section 97 of the Finance Act, 2022. Conclusion: The Court dismissed the writ petitions challenging the SCNs and OIOs issued by DRI officers, holding that the DRI officers were competent to issue SCNs and adjudicate them. The Court also quashed and remitted back the OIOs where reliance was placed on the statements of third parties who were not produced for cross-examination. The Court directed the adjudicating authority to complete the pending proceedings in light of the validations in Section 97 of the Finance Act, 2022. The Court allowed the petitioners to file statutory appeals before the appropriate appellate tribunal within 30 days.
|
