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TMI Blog2014 (9) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... fication dated 6-7-2011. To our mind, therefore, respondent No. 1 had the jurisdiction to issue show cause notice. - Decided against the petitioner. - Special Civil Application No. 2894 of 2013 - - - Dated:- 8-1-2014 - Akil Kureshi and Sonia Gokani, JJ. Shri Harshadray A. Dave, Advocate, for the Petitioner. Shri Hriday Buch, Advocate, for the Respondent. JUDGMENT [Judgment per : Akil Kureshi, J. (Oral)]. - Petitioners have filed this petition with following prayers :- 17. In view of what is stated hereinabove and the grounds taken, the petitioner most respectfully prays that this Hon ble Court may be pleased - (i) To issue writ of certiorari or other appropriate writ, order or direction to quash the illegal Panchnama dated 3-1-2012 (Annexure No. 2), illegal seizure memo dated 9-2-2012 (Annexure No. 4) and show cause notice dated 24-1-2003 (Annexure No. 23) issued by respondent No. 1 and declare the seizure of the imported goods as illegal, wholly without jurisdiction and unauthorized by law; (ii) To issue writ of certiorari and quash the illegal orders of provisional release and coercive collection and recovery of differential duty of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tus Oil falling under the Customs Tariff Heading No. 3301 29 24. It is not in dispute that Eucalyptus Oil would invite customs duty at the rate of 20% as against Eucalyptol , which would invite duty at 7.5%. 4. Eventually at the request of the petitioners, the goods were cleared provisionally on 21-2-2012 upon the petitioners paying higher duty and also furnishing bond for the full value of goods with 25% bank guarantee. The petitioners have deposited a sum of ₹ 10,04,049/- towards duty and executed bond for a sum of ₹ 68,00,127/- and also gave bank guarantee of ₹ 17,25,000/-. 5. DRI authorities continued inquiries and summoned the petitioners for recording statements and collected documents. Eventually on 24-1-2013, respondent No. 1, Joint Director, Directorate of Revenue Intelligence, Ahmedabad issued a show cause notice and called upon the petitioners to :- 22.... show cause to the Additional/Joint Commissioner of Customs (Export), having his office at Jawaharlal Nehru Custom House, Nhava Sheva, Uran, District, Raigad, Maharashtra, as to why :- (i) The classification of the goods Eucalyptus Oil imported by misdeclaring the same as Eucalypt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the copies of the same are enclosed with this notice. 27. This show cause notice is limited to the seized goods only and is issued without prejudice to any other action that may be taken against them, under this Act or any other law for the time being in force, or against any other company, person(s), goods and conveyances whether named in this notice or not. 6. At this stage, the petitioners filed the present petition. Though number of prayers have been made as noted above, principal grievances of the petitioners are that the DRI had no authority or jurisdiction to intervene when the goods were imported at Nhava Sheva port at Mumbai and that the action of detention and seizure of goods and thereafter release on provisional basis on unfair and harsh conditions according to the petitioners was wholly illegal. Second aspect of the petitioners grievance, which has been extensively debated before us pertains to the validity of the show cause notice dated 24-1-2013. The case of the petitioners is that no DRI authority much less stationed at Ahmedabad would have jurisdiction to issue show cause notice under Section 28 of the Customs Act, 1962 for the goods which were imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms Act which was introduced by way of an amendment by amending Act, 14 of 2011 with effect from 16-9-2011 to save certain proceedings under Sections 17 and 28 of the Customs Act, which would have otherwise been hit by the ratio of the judgment of the Supreme Court in the case of Sayed Ali (supra). Our attention was also drawn to the circular of the Central Board of Excise Customs dated 23-9-2011 explaining the amendments brought in by virtue of sub-section (11) of Section 28 of the Customs Act. 11. Learned counsel for the petitioners also brought to our notice a subsequent Notification No. 40/2012, dated 2-5-2012 issued by the Central Board of Excise and Customs in which the Board assigned the officers mentioned in the notification the functions under the Customs Act, 1962 as specified in Column No. 3 of the Table. On the basis of such notification, the counsel submitted that even in the said assignment of functions the DRI authorities have not been empowered to issue show cause notice and adjudicate on the questions of short-levy or non-levy of duty, etc., under Section 28 of the Customs Act. Reliance was placed on the decision of the Apex Court in the case of Union of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that notification dated 2-5-2012 did not rescind the previous notifications, which continue to hold the field. 16. Having thus heard learned counsel for the parties and having perused the documents on record, a short question that calls for consideration is whether in facts of the present case, the impugned show cause notice issued by respondent No. 1 Joint Director of Revenue Intelligence had authority to do so. Section 2(34) of the Customs Act, 1962 defines the term proper officer as under :- 2(34) proper officer , in relation to any functions to be performed under this Act, means the officer of customs who is assigned those functions by the Board or the Commissioner of Customs; 17. The term proper officer is used at various places under the Act. Under Section 17 it is proper officer who can verify the self-assessment of goods and examine or test any imported goods or exported goods as may be necessary. Likewise under Section 18, 1t is the proper officer, who may undertake the exercise of provisional assessment and direct the importer to pay difference in duty or furnish security as deemed fit for provisional release of the goods. 18. Section 28 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector, granted liberty to the Department to re-adjudicate the case after issuing proper show cause notice. Fresh notice was issued on 16-4-1994 why the goods should not be confiscated and customs duty amounting to ₹ 5,07,274/- be not levied in terms of Section 28(1) of the Customs Act. Such notice was questioned on the ground of jurisdiction of the Collector of Customs (Preventive). It was in this background that the Supreme Court rendered its decision holding that only such Customs Officer who has been assigned the specific functions of assessment and reassessment of duty either by the Board or the Commissioner of the Customs in terms of Section 2(34) in the jurisdictional area where the import concerned has been effected, who is competent to issue notice under Section 28. 22. Perhaps since the decision of the Supreme Court in the case of Sayed Ali (supra) would upset large number of pending or even concluded proceedings, the Legislature introduced sub-section (11) to Section 28, which provides as under :- (11) Notwithstanding anything to the contrary contained in any judgment, decree or order of any Court of law, Tribunal or other authority, all persons appointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys had the power of assessment under Section 17 and should be deemed and always should be considered as proper officers for the purpose of the said section. 25. In the context of the inquiry, whether the respondent No. 1 can be stated to be a proper officer we may refer to the different notifications of C.B.E. C. placed for our consideration. 26. Notification dated 7-7-1997 provided as under :- In exercise of the powers conferred by sub-section (1) of section 4 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 38/63-Customs, dated 1st February, 1963 the Central Government hereby appoints the following persons to be the Officers of Customs, namely :- 1. Appraisers, Examiners, Superintendent Customs (Preventive), Preventive Officers, Women Searchers, Ministerial Officers and Class IV Officers in the Customs Department in any place in India. 2. Superintendents, Inspectors, Women Searchers, Ministerial staff and Class IV staff of Central Excise Department, who are for the time being posted to a Customs port, Customs airport, Land-Customs station, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 28 of the said Act, namely :- Table Sl. No. Designation of the officers 1 2 1. Additional Director Generals, Additional Directors or Joint Directors, Deputy Directors or Assistant Directors in the Directorate General of Revenue Intelligence. 2. Commissioners of Customs (Preventive), Additional Commissioners or Joint Commissioners of Customs (Preventive), Deputy Commissioners or Assistant Commissioners of Customs (Preventive). 3. Additional Director Generals, Additional Directors or Joint Directors, Deputy Directors or Assistant Directors in the Directorate General of Central Excise Intelligence. 4. Commissioners of Central Excise, Additional Commissioners or Joint Commissioners of Central Excise, Deputy Commissioners or Assistant Commissioners of Central Excise. [F. No. 437/143/2009-Cus.IV] (Vikas) Under Secretary to the Government of India 29. Under the notification dated 2-5-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Director, Deputy Directors and Assistant Directors for the purposes of Sections 17 and 28 of the Customs Act. 31. We may recall, in the present case that the show cause notice was issued on 24-1-2013, that is, after the notification dated 6-7-2011. To our mind, therefore, respondent No. 1 had the jurisdiction to issue show cause notice. The show cause notice under sub-section (1) of Section 28 could be issued by a proper officer. A proper officer is one, who is defined in Section 2(34) as the officer of Customs, either by the Board or by the Commissioner of Customs, who is assigned specific functions. Under notification dated 6-7-2011, Joint Director of Revenue Intelligence is assigned the function for the purpose of Sections 17 and 28 of the Customs Act by a specific reference to sub-section 2(34) of the Act. 32. In that view of the matter by the settled position, we cannot hold that respondent No. 1 lacked the jurisdiction to issue a show cause notice. Had this notification not been issued, the question perhaps would be whether under sub-section (17) of Section 28 despite the decision of the Supreme Court in the case of Sayed Ali (supra), the respondent No. 1 could be cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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