‘Proper officer’ for the sections 17 and 28 of the Customs Act, 1962 - CBEC's Customs Manual 2023 - Customs

4. Proper officer for the sections 17 and 28 of the Customs Act, 1962 4.1. To address the issue of validity of Show Cause Notices issued by the DRI, which were impacted by the judgement of the Hon ble Supreme Court in the case of Canon India Private Limited vs Commissioner of Customs, Section 97 of the Finance Act, 2022 . Also, certain provisions of the Customs Act have been amended inserted as mentioned below: (i) Sub-Section (34) of Section 2 had been amended to specifically state that assignment of functions to an officer of Customs by the Board or the Principal Commissioner/ Commissioner of Customs shall be done under the newly inserted sub-sections (1A) and (1B) of Section 5 of the Customs Act, 1962. (ii) Section 3 had been amended to specifically include the officers of DRI, Audit and Preventive formation in the class of Officers, so as to remove the ambiguity as regards the class of officers of Customs. (iii) Sub-section (1A) and (1B) have been inserted in section 5 of the Act to explicitly provide power of assignment of function to officers of Customs by the Board or as the case may be, by the principal Commissioner of Customs or Commissioner of Customs. The amendment has been necessitated to correct the infirmity observed by the Courts in recent judgements that the Act required explicit provisions conferring powers for the assignment of function to officers of Customs as proper officers for the purpose of the Act, besides definition clause (34) in section 2 of the Customs Act. (iv) Sub-section (4) to section 5 is inserted to delineate the criteria which the Board may adopt while imposing limitations or conditions under sub-section (1) or while assigning functions under sub-section (1A) to the officers of Customs. For instance, one of the limitations/conditions that the Board currently imposes on officers of customs is that they are required to operate within a specified territorial jurisdiction. However, with the launch of faceless assessments and other trade facilitation initiatives wherein, for instance, a need is felt for the development of industry-specific expertise in assessments the Board may need to confine jurisdiction to certain goods or class of goods. (v) Sub-section (5) to section 5 is inserted to ensure that wherever necessary, for the proper management of work, two or more officers of Customs, can concurrently exercise powers and functions (as in the case of faceless assessment). (vi) Section 110AA is inserted with a view to affirm the principle that, wherever, an original function duly exercised by an officer of competent jurisdiction, is the subject matter of a subsequent inquiry, investigation, audit or any other specified purpose by any other officer of customs, then, notwithstanding, such inquiry, investigation, audit or any other purpose, the officer, who originally exercised such jurisdiction shall have the sole authority to exercise jurisdiction for further action like reassessment, adjudications, etc. consequent to the completion of such inquiry, investigation, audit or any other purpose. 4.2. In alignment with the above provisions, the Proper Officer for issue of demand has been notified under Section 5(1A) vide notification 26/2022-Customs (N.T.) dated 31.03.2022. 4.3. Cases of single jurisdictions may be adjudicated in terms of the guidelines on monetary limit for adjudication of cases by different grades of Customs Officers. Board has decided that cases where SCNs are issued under section 28 of the Customs Act, 1962 , these will be adjudicated as per following norms highlighted in Table 13.1. Table 13.1: Monetary limit for adjudication of cases by different grades of Customs Officers Adjudicating Officer Nature of Cases Amount of Duty involved Commissioner All cases Without limit ADC/JC All cases Upto Rs.50 lakhs AC/DC All cases Upto Rs. 5 lakhs 4.4. Further, the proper officer for the issuance of single jurisdiction Show Cause Notice and adjudication of cases under the provisions of Rule 16 of the Customs, Central Excise and Service Tax Drawback Rules, 1995 shall be as under: (i) In case of simple demand of erroneously paid drawback, the present practice of issuing Show Cause Notice and adjudication of case without any limit by Assistant / Deputy Commissioner of Customs shall continue. (ii) In cases involving collusion, wilful misstatement or suppression of facts etc., the adjudication powers will be as described in Table 13.2. Table 13.2: Adjudication powers in cases involving collusion, wilful misstatement or suppression of facts etc Adjudicating Officer Amount of Drawback Additional / Joint Commissioner of Customs Without limit Deputy / Assistant Commissioner of Customs Upto Rs.5 lakhs 4.5. In case of Export Promotion Schemes i.e. Advance Authorization / DFIA / Reward Schemes etc. the adjudication powers shall be as described in Table 13.3. Table 13.3: Adjudication powers in case of Export Promotion Schemes Level of Adjudicating Officer Duty Duty Incentive amount Commissioner of Customs Without any limit. Additional / Joint Commissioner of Customs Upto Rs.50 lakhs Deputy / Assistant Commissioner of Customs Upto Rs.5 lakhs 4.6. In relation to goods which are liable for confiscation under Chapter XIV of the Customs Act 1962 , the adjudication powers for the purposes of adjudging confiscation or penalty shall be as under described in Table 13.4 Table 13.4: Adjudication powers for the purposes of adjudging confiscation or penalty S. No. Customs Officer Value of goods liable for confiscation (1) Assistant Commissioner of Customs or Deputy Commissioner of Customs Above rupees one lakh but not exceeding rupees ten lakhs (2) A Gazetted Officer of Customs lower in rank than an Assistant Commissioner of Customs or Deputy Commissioner of Customs Not exceeding rupees one lakh [Refer Notification No. 50 /2018-Customs (N.T.) dated 8th June 2018 ] 4.7. However in case of multiple jurisdictions, the following category of cases has been assigned to the officers of Customs for the purpose of issuing Show Cause Notice and adjudication vide Notification No. 28/2022-Customs (N.T.) dated 31st March, 2022, in respect of cases falling under section 110AA. These are discussed in Table 13.5 below. Table 13.5: Proper Officer of Customs for issuing Show Cause Notice in case of multiple jurisdictions S. No. Cases of multiple jurisdictions covered by Section 110AA in respect of -- Proper officer of Customs (1) (2) (3) 1. Clauses (a) or (b) and (d) (i) involving aggregate duty upto rupees five lakhs. (i) Deputy Commissioner of Customs or Assistant Commissioner of Customs who is assigned the function relating to assessment of duty or refund, as the case may be, in the jurisdiction having highest amount of duty or refund, at the stage of transfer. (ii) involving aggregate duty upto rupees fifty lakhs. (ii) Additional Commissioner of Customs or Joint Commissioner of Customs to whom the Officer specified at (i) above in Column (3) is subordinate in accordance with sub-section (2) of section 5. (iii) involving aggregate duty without limit. (iii) Principal Commissioner of Customs or Commissioner of Customs to whom the Officer specified at (i) above in Column (3) is subordinate in accordance with sub-section (2) of section 5. 2. Clauses (c) and (d) (iv) involving aggregate amount of drawback upto rupees five lakhs. (iv) Deputy Commissioner of Customs or Assistant Commissioner of Customs who is assigned the function allowing drawback in the jurisdiction having highest amount of drawback, at the stage of transfer. (v) involving aggregate amount of drawback without limit. (v) Additional Commissioner of Customs or Joint Commissioner of Customs to whom the Officer specified at (iv) above in Column (3) is subordinate in accordance with sub-section (2) of section 5. 3. Clause (d) (vi) involving only interest amount (vi) Deputy Commissioner of Customs or Assistant Commissioner of Customs who is assigned the function relating to assessment of duty or refund or drawback, as the case may be, in the jurisdiction having highest amount of interest, at the stage of transfer. 4.8. Powers to Chief Commissioners to assign the cases for adjudication of show cause notices within their respective jurisdiction. For smooth and expeditious disposal of the pending demands for adjudication, the Board has delegated its powers conferred by clause (a) of section 152 of the Customs Act, 1962 (52 of 1962), to the Principal Chief Commissioner or Chief Commissioner of Customs for the purposes of assigning the cases for adjudication of show cause notices issued under the provisions of the said Act or rules, regulations made there under, within his jurisdiction. [Refer Notification No. 91 /2018-Customs (N.T.) dated 5th November 2018 ]