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TMI Blog2016 (1) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... aljeet Singh Shri S Vasudevan, Advs. For the Respondent : Shri Shri Rajiv Tandan, (Principal Commr.), Shri Govind Dixit Shri Amresh Jain, DRs ORDER PER: R K SINGH: Vide Misc. Order No. 52733 dated 28.7.2015, CESTAT with reference to the appeal filed by M/s Bhagwati (422/2010-CU(DB), noted that the appellant has sought to urge additional ground to support its challenge to the jurisdiction of DRI to initiate proceedings. CESTAT further noted that a large number of appeals raising an identical issue i.e. incompetence and unsustainability of adjudication orders on the ground that officers of DRI are not proper officers authorised to initiate proceedings whether for assessment, re-assessment or levy of short remitted Customs duty under Section 17 and 28 of Customs Act, 1962 without specific allocation of functions to operate as proper officer under Section 2(34) of Customs Act, 1962, are pending with CESTAT. CESTAT in para 4 and 5 of the said order observed as under: 4. We have heard Shri Kamaljeet Singh, Shri Vasudevan and other Counsel representing the several assessees who are parties to appeals wherein jurisdictional competence of the DRl is also in i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 28 which was introduced on 8th April, 2011 and Explanation 2 appended to Section 28(11) ibid clearly states that any non-levy or short-levy before the date on which the Finance Bill 2011 receives the assent of the President shall continue to be governed by the provisions of Section 28 as it existed prior to April 8, 2011. A harmonious reading of Section 28(11) which was introduced on 16.9.2011 makes it clear that the said sub section 11 did not cover old Section 28 (as it existed prior to 8.4.2011] and therefore the show cause notices issued prior to that date (i.e. 8.4.2011] would not be governed by the provisions of Section 28(11]. (iii] Section 28 confers authority on the proper officer and not on 'a' proper officer and as the assessment in these cases have been done by different officers, other than DRI officers, the former became the proper officers. In such circumstances, DRI officers issuing show cause notices would mean more than one authority assuming the role of the proper officer which would cause utter confusion as observed by Supreme Court in the case of CC Vs. Syed Ali - 2011 (265) ELT 17 (SC) and therefore such amendment would not be constitut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the ld. Advocate with regard to the constitutional validity of Section 28(11). 7. Section 28(11) was introduced with effect from September 16, 2011 and is reproduced below : (11) Notwithstanding anything to the contrary contained in any judgement, decree or order of any court of law, Tribunal or other authority, all persons appointed as officers of Customs under sub-section (1) of Section 4 before the sixth day of July, 2011 shall be deemed to have and always had the power of assessment under Section 17 and shall be deemed to have been and always had been the proper officers for the purposes of this section. A mere perusal of the language of 28(11) leaves no doubt that all officers appointed as officers of Customs under sub section 1 of Section 4 before 6.7.2011 shall be deemed to have been and always had the power of assessment under Section 17 and shall be deemed to have been and always had been the proper officers for the purpose of this section (i.e. Section 28). It is not in dispute that DRI officers who issued the show cause notices were appointed as officers of Customs under sub-section 1 of Section 4 before 6.7.2011, Therefore in terms of Section 28(11) show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As such the Commissioner of Customs (Preventive) who has not been assigned the function of a proper officer for the purposes of assessment or re-assessment of duty and issue of show cause Notice to demand Customs duty under Section 17 read with Section 28 of the Act in respect of goods entered for home consumption is not competent to function as a proper officer which has not been the legislative intent. 2. In view of the above the Show Cause Notices issued over the time by the Customs officers such as those of the Commissionerates of Customs (Preventive), Directorate General of Revenue Intelligence and others, who were not specifically assigned the functions of assessment and re-assessment of customs duty may be construed as invalid. The result would be huge loss of revenue to the exchequer and disruption in the revenue already mobilized in cases already adjudicated. However, having regard to the urgency of the matter, the Government issued notification on 6th July, 2011 specifically declaring certain officers as proper officers for the aforesaid purposes. 3. In the circumstances, it has become necessary to clarify the true legislative intent that Show Cause Notices is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of one or the other meaning on the object to be achieved. Indeed a harmonious interpretation of the said Explanation is that the provisions of Section 28 as it existed prior to 8.4.11 shall govern the non-levy/short levy before 8.4.2011, like the period within which the demand can be raised would be six months against one year as per the new Section 28 effective from 8.4.11. On the other hand subsection 11 of Section 28 is not regarding non-levy or short levy but regarding competence of officers. Further elaboration on this point by reference to the various aspect of interpretation of statutes is eschewed in the wake of judgement of Bombay High Court in the case of Sunil Gupta (Supra). Para 25 of that judgement has taken note of this very issue and observed as under: 25. As a result of the above discussion and finding that Explanation 2 has not been dealing with the case, which was specifically dealt with by sub-section (11) of Section 28 of the Act, that we are of the opinion that the challenge in the Writ Petition is without any merit The Explanation removes the doubts and states that even those cases which are governed by Section 28 and whether initiated prior to the Fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een done in the instant case. 24. If that has been done, then, no assistance can be derived from the Judgment of the Hon'ble Supreme Court in the case of Sayed Ali (supra]. There, for want of jurisdiction or competence in the Collector of Customs (Preventive), the show cause notice was quashed by the Tribunal and that order was upheld by the Supreme Court. Before us, the issue is not whether any Collector of Customs (Preventive) could be said to be on par with the officers mentioned in the earlier Notification dated 26th April, 1990. The assignment of functions to these officers, who were earlier carrying on preventive work came w.e.fi 6th July, 2011. That Notification was not, at the relevant time, given retrospective effect It is in such circumstances that the Hon'bie Supreme Court held that in terms of the Notifications, which were issued and holding the field, not designating the Collector of Customs (Preventive) as a proper officer for the purpose of Section 28 as it then stood, he was not competent to issue show cause notice (see para 24 of Sayed Ali's Judgment). This position has now undergone a change and from 6th July, 2011, admittedly, they have been assi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra) and India Household and Healthcare Ltd. [supra] to the effect that the exercise of jurisdiction by one officer will exclude the jurisdiction of all others. We need not dwell on this issue in the present case because this involves the realm of constitutional validity of a provision and also because such a situation does not arise in the present appeals inasmuch as once DRI/Preventive Commissionerates had exercised jurisdiction by issuing the show cause notices, no other authority has done so with regard to the same transactions involving the same issue. Further, the Supreme Court judgement in the case of Sayed Ali (supra] which inter alia spoke of the utter confusion which would be caused by more than one authority assuming the role of 'the' proper officer, has been taken note of by both Bombay High Court and Gujarat High Court in the judgements quoted earlier. 11. While the Bombay and Gujarat High Courts have categorically held that the DRI officers have been rendered competent to issue show cause notice under Section 28 even during the period prior to 8.4.2011, the challenge before Delhi High Court which, inter alia involves challenge to the constitutional validity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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