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TMI Blog2016 (5) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment or assessment in favour of such officers who issued such SCNs since they were not “proper officers” for the purposes of Section 2(34) of the Act and further because Explanation 2 to Section 28 as presently enacted makes it explicit that such non-levy, short-levy or erroneous refund prior to 8th April 2011 would continue to be governed only by Section 28 as it stood prior to that date and not the newly re-cast Section 28 of the Act. Section 28(11) interpreted in the above terms would not suffer the vice of unconstitutionality. Else, it would grant wide powers of assessment and enforcement to a wide range of officers, not limited to customs officers, without any limits as to territorial and subject matter jurisdiction and in such event the provision would be vulnerable to being declared unconstitutional. As regards the period subsequent to 8th April 2011, it is evident that if the administrative chaos as envisaged by the Supreme Court in Sayed Ali (supra) should not come about, there cannot be any duplicating and/or overlapping of jurisdiction of the officers. It would have to be ensured through proper co-ordination and administrative instructions issued by the CBEC that on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 003 and all proceedings pursuant thereto are hereby quashed. Validity of SCN dated 30th April 2010 issued by the ADG, DRI, Delhi - Search conducted at the residential premises of Petitioner No.4 - Challenge is on the ground that Respondent No. 3 was not authorised to issue such SCN as he was not a “proper officer” within the meaning of Section 2(34) of the Act. Counter affidavit filed where it is denied that at the time when the SCN was issued i.e. 30th April 2010, the ADG, DRI was not assigned the function of assessment under Section 17 and reassessment under Section 28 of the Act and was, therefore, not a “proper officer” for the purposes of Section 2(34) of the Act - Held that:- the recourse to Section 28(11) of the Act as introduced with effect from 8th July 2011 cannot be had to validate the impugned SCN particularly in view of Explanation 2 to Section 28 as it presently stands. Consequently, the Court quashes the impugned SCN dated 18th April 2010, and SCN dated 12th February 2013 and all proceedings consequent thereto. Writ Petition (C) No. 1185/2013 and the pending application, if any, are disposed of. Validity of SCN dated 9th March 2011 issued by the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther period beyond 8th April 2011 will proceed in accordance with law. Validity of SCN dated 31st October 2008 issued by the ADG, DRI, Delhi and Circular No. 44/2011-Cus dated 23rd September 2011 issued consequent upon the insertion of Section 28(11) of the Act - Reassessment of imported goods during the period prior to 8th April 2011 - Admittedly, the case pertains to a period prior to 8th April 2011. Further it is not in dispute that at the time when the SCN was issued, the ADG, DRI was not assigned the functions of reassessment under Section 28 of the Act and, therefore, was not a “proper officer” for the purposes of Section 2(34) of the Act - Held that:- for the reasons already discussed, the impugned SCN dated 31st October 2008 and the Circular dated 23rd September 2011 are hereby quashed. Validity of SCN dated 14th March 2011 issued by the ADG, DRI - alleged imports made through the ICD, Tughlakabad during the period prior thereto - Held that:- in light of the above discussion, with the ADG, DRI not being the “proper officer” under Section 2(34) of the Act at the time when the SCN was issued, Section 28(11) of the Act cannot be referred to for validating the acts and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsustainable in law and the said SCN and all proceedings pursuant thereto are hereby quashed. Validity of SCN dated 7th November 2013 issued by the ADG, DRI - Imports of “Narrow Woven Fabrics” from China during the period 8th November 2008 to 30th November 2010, i.e., a period prior to 8th April 2011 - Held that:- for the reasons already discussed, the said SCN dated 7th November 2013 and all proceedings consequent thereto are hereby quashed. Validity of SCN dated 9th June 2014 issued by the ADG, DRI - Invokation of Section 124 of the Act and Section 28 read with Section 9A of the Customs Tariff Act, 1975 - Imports of Color Picture Tubes made through the ICD, Tughlakabad as well as ICD, Dadri for the period May 2009 to January 2011 - Held that:- for the reasons already mentioned, the said impugned SCN and all proceedings pursuant thereto are unsustainable in law and are hereby quashed. Validity of SCN dated 10th September 2004 issued by the ADG, DRI - alleged mis-declaration of value of export of Alloy Steel Forgings (Machined) from ICD, Tughlakabad and CFS, Patparganj - availing higher DEPB credit for the period prior to 8th April 2011 - Held that:- for the reasons alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P.(C) 9379/2015 CM 21818/2015 , W.P.(C) 5191/2015 CM 9414/2015, 9416/2015, W.P.(C) 11041/2015 CM 28502/2015, W.P.(C) 11806/2015 CM 31354/2015 SONY INDIA PRIVATE LIMITED K.S.TRADERS SENNHEISER ELECTRONICS INDIA PVT LTD COMET IMPEX RAJESH GUPTA DAIKIN AIRCONDITIONING INDIA PRIVATE .LTD. GODREJ AND BOYCE MANUFACTURING CO. LTD. CORTEL INDIA EASTRON OVERSEAS INC DIVYA ELECTRONICS RAJESH TRIPATHI M/S LAKSHMAN OVERSEAS AND ORS M/S PACE INTERNATIONAL ANR. BHARAT SANCHAR NIGAM LIMITED SATYAM MARKETING THROUGH: ITS PROPRIETOR MANOJ SABOO @ MANOJ MAHESHWARI HANSRAJ BHATIA CO. THROUGH: ITS PROPRIETOR SHRI SANJEEV BHATIA M/S. J.R. INTERNATIONAL BHAGWATI COMPONENTS MFG.CO. THROUGH: ITS DIRECTOR MR. SURJIT SINGH JUDGMENT Dr. S. Muralidhar, J. Introduction 1. The common question in this batch of matters pertains to the constitutional validity of Section 28 (11) of the Customs Act, 1962 ( Act ) which was inserted by the Customs (Amendment and Validation) Act, 2011 ( Validation Act, 2011 ) with effect from 16th September 2011. In terms of Section 28 (11) of the Act, all persons appointed as Customs Officers under Section 4 (1) of the Act prior to 6th July 2011 shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointment of officers of customs. It states that the Central Board of Excise and Customs may appoint such persons as it thinks fit to be officers of customs . The concept of proper officer becomes relevant for the purpose of assessment of duty under Section 17, provisional assessment of duty under Section 18, the exercise of the power to issue SCN under Section 28 where there has been non-levy, short-levy or erroneous refund of customs duty or where any interest payable has not been paid or part-paid or erroneously refunded. It is only a proper officer who can exercise jurisdiction under the above provisions and certain other provisions which explicitly state that the powers therein are to be exercised only by a proper officer. 9. In order to determine which of the officers of the customs are proper officers one has to necessarily examine, in terms of Section 2 (34) of the Act, whether such proper officer has been assigned those functions by the CBEC or the Commissioner of Customs. Section 28 of the Act as it stood prior to the recasting of the entire Section 28 by the Validation Act, 2011, reads as under: 28. Notice for payment of duties, interest, etc. (1) When any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of the amount specified in the notice) and thereupon such person shall pay the amount so determined. (2A) Where any notice has been served on a person under sub-section (1), the proper officer (1) in case any duty has not been levied or has been short-levied, or the interest has not been paid or has been part paid or the duty or interest has been erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts, where it is possible to do so, shall determine the amount of such duty or the interest, within a period of one year: and (2) in any other case, where it is possible to do so, shall determine the amount of duty which has not been levied or has been short-levied or erroneously refunded or the interest payable which has not been paid, part paid or erroneously refunded, within a period of six months, from the date of service of the notice on the person under sub-section (1). (2B) Where any duty has not been levied, or has been short-levied or erroneously refunded, or any interest payable has not been paid, part paid or erroneously refunded, the person, chargeable with the duty or the interest, may pay the amount of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of the Supreme Court in Sayed Ali (supra). The facts of the case were that Respondent No. 1 was a partner of Respondent No. 2 firm, M/s. Handloom Carpet, which was engaged in the business of carpet manufacture and export. The firm was charged with having misused the Export Passbook Scheme by selling goods cleared duty free in the open market or selling the passbook on premium in violation of the ITC restriction imposed on such sale. The investigations in the matter were conducted by the Marine and Preventive Wing of the Customs. 12. On 28th August 1991, the Assistant Collector of Customs (Preventive), Mumbai issued to Respondent No. 2 firm as well as Respondent No. 1, Sayed Ali alleging violation of the provisions of Section 111 (d) of the Act. This was followed by an adjudication order being passed on 3rd February 1993 by the same Officer who issued the SCN, i.e., Assistant Collector of Customs (Preventive), confirming the demands raised in the SCN. Aggrieved by the above order, the Respondents preferred an appeal before the Collector of Customs (Appeals). By an order dated 14th December 1993 the Collector of Customs (Appeals) allowed the appeal of the Respondents b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice and in view thereof he could not have the jurisdiction to adjudicate the matter when imports have taken place at Bombay Customs House. 16. Aggrieved by the above order of the CEGAT, the Customs Department went in appeal before the Supreme Court. The plea of the Department before the Supreme Court was that once the Commissioner (Preventive) had been appointed as Collector of Customs (Preventive), Bombay by virtue of Notifications Nos. 250/83 and 251/83, issued by the Central Government under Section 4 of the Act, the Commissioner (Preventive) became proper officer in terms of Section 2 (34) of the Act and was, therefore, competent to issue an SCN under Section 28 of the Act since the goods were cleared for home consumption in Bombay. Inter alia reliance was placed on the decision of the Supreme Court in Union of India v. Ram Narain Bishwanath (1998) 9 SCC 285 and the larger bench of the Tribunal in Konia Trading Co. v. Commissioner of Customs (2004) 170 ELT 51 (Tri.) and another decision of the Tribunal Manohar Bros. (Capacitors) v. Collector of Customs-II, Bombay 1998 (98) ELT 821 (Tri), which attained finality by the dismissal of the Revenue s appeal by the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s accordingly observed as under: We are convinced that Notifications Nos. 250-Cus. And 251-Cus. both dated 27th August 1983, issued by the central government in exercise of the powers conferred by sub-section (1) of the Section 4 of the Act, appointing Collector of Customs (Preventive), etc. to be the Collector of Customs for Bombay, Thane and Kolaba Districts in the State of Maharashtra did not ipso facto confer jurisdiction on him to exercise power entrusted to the proper officers for the purpose of Section 28 of the Act. 19. The Supreme Court rejected the contention of the Department that the source of power to act as proper officer was Sections 4 and 5 of the Act and not sub-section (34) of Section 2 of the Act. The Supreme Court observed that Sections 4 and 5 merely authorise the Board to appoint officers of Customs and confer on them the powers and duties to be exercised/discharged by them, but for the purpose of Section 28 of the Act, an officer of Customs has to be designated as proper officer by assigning the function of levy and collection of duty, by the Board or the Commissioner of Customs. The argument is rejected accordingly. 20. The Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been paid, part-paid or erroneously refunded, for any reason other than the reasons of collusion or any wilful mis-statement or suppression of facts,- (a) the proper officer shall, within one year from the relevant date, serve notice on the person chargeable with the duty or interest which has not been so levied or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice; (b) the person chargeable with the duty or interest, may pay before service of notice under clause (a) on the basis of,- (i) his own ascertainment of such duty; or (ii) the duty ascertained by the proper officer, the amount of duty along with the interest payable thereon under section 28AA or the amount of interest which has not been so paid or part-paid. (2) The person who has paid the duty along with interest or amount of interest under clause (b) of sub-section (1) shall inform the proper officer of such payment in writing, who, on receipt of such information shall not serve any notice under clause (a) of that sub-section in respect of the duty or in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oper officer is of the opinion- (i) that the duty with interest and penalty has been paid in full, then, the proceedings in respect of such person or other persons to whom the notice is served under sub-section (1) or sub- section (4), shall, without prejudice to the provisions of sections 135, 135A and 140 be deemed to be conclusive as to the matters stated therein; or (ii) that the duty with interest and penalty that has been paid falls short of the amount actually payable, then the proper officer shall proceed to issue the notice as provided for in clause (a) of sub-section (1) in respect of such amount which falls short of the amount actually payable in the manner specified under that sub-section and the period of one year shall be computed from the date of receipt of information under sub-section (5). (7) In computing the period of one year referred to in clause (a) of sub-section (1) or five years referred to in sub-section (4), the period during which there was any stay by an order of a court or tribunal in respect of payment of such duty or interest shall be excluded. (8) The proper officer shall, after allowing the concerned person an opportunity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egories demarcated in terms of Section 28 (4) as amended, the time period is five years . 25. The concept of relevant date has been elaborated in Explanation 1. This is more or less conforms to the erstwhile Section 28 (3) of the Act. What is new as far as the recasting of Section 28 is concerned, is that Explanation 2 begins with the expression For the removal of doubts . It categorically states that for any non-levy, short-levy or erroneous refund prior to the date on which the Finance Bill, 2011 receives assent of the President, it should continue to be governed by the provisions of Section 28 as it stood immediately prior to the date on which such assent is received. In other words any non-levy, short-levy or erroneous refund prior to 6th July 2011 would be governed by the un-amended Section 28. The 6th July 2011 Notification 26. On 6th July 2011 itself, Notification No. 44 of 2011-Customs was issued which purportedly designates proper officer for the purpose of Sections 17 and 28 of the Act. The said notification reads as under: In Exercise or the powers conferred by sub-Section (34 of Section 2 of the Customs Act, 1962 (52 of 1962), the Central Board of Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een specifically assigned the duties of assessment and re-assessment in the jurisdiction area is competent to issue a notice for the demand of duty as a proper officer. 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 offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 011 with immediate effect. According to the said Circular, Notification No. 44/2011-Customs (N.T.) dated 6th July 2011 whereby the officers of the DRI, DGCEI, Commissionerate of Customs (Preventive) and Central Excise Commissionerates were assigned the functions of the proper officer and the amendment to Section 28 of the Act settled the issue of validity of SCNs issued by them. The only additional clarification was that the said officers would not exercise authority in terms of Section 28 (8) of the Act. It was clarified that in other words, there shall be no change in the present practice and officers of DRI and DGCEI shall not adjudicate the Show Cause Notices issued under Section 28 of the said Act. Petitions in this Court 32. Two things happened after the issuance of the above instructions. One was that the adjudication proceedings in terms of the SCNs already issued prior to 6th July 2011, even by the DRI, and DGCEI continued on the strength of the above amendment. Consequently, as in the case of Sony India Private Limited [Writ Petition (Civil) No. 8196 of 2013], for instance, an SCN came to be issued on 12th/15th April 2013 by the DRI in respect of the period even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or order of any court of law, tribunal or other authority and not in relation to the other provisions of the Act which includes Explanation 2 of Section 28 which had come into force earlier. It is for this reason that we are issuing notice. Notice is accepted by the learned counsel appearing for Respondent No. 2. Notice is also accepted by the learned counsel appearing for Respondent No. 1. Notice shall be sent to Respondent Nos. 3 and 4. The counter affidavits be filed within four weeks and rejoinder affidavits, if any, be filed within two weeks thereafter. List on 9th April 2013. In the meanwhile, the proceedings may go on and the adjudication order may be passed by the adjudicating authority. However, that order shall not be given effect to until further directions from this Court. 34. Similar interim orders permitting the proceedings to go on but that the adjudication shall not be given effect to, were passed in each of the writ petitions. 35. On behalf of the Petitioners, arguments have been addressed by Mr. V. Lakshmi Kumaran, learned counsel, Mr. C. Hari Shankar and Mr. Arshad Hidyatullah, learned Senior counsel, Mr. Rajesh Mahna and Mr. Naveen Mal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 28, as it existed prior to 8th April 2011. Explanation 2 to Section 28 provides that any non-levy or short-levy prior to 8th April 2011 would continue to be governed by the provisions of Section 28 as it stood immediately prior to 8th April 2011. (iv) Mere deeming of all the officers of the customs to be prior officers without validating the SCNs issued prior to 8th April 2011 would not validate such SCNs by merely the amending Section 28 of the Act. Relying on the decision of the Supreme Court in Satchidananda Misra v. State of Orissa 2004 8 SCC 599, it was submitted that the very purpose of a Validating Act is to remove the cause of ineffectiveness or invalidity. However, there is no specific provision in the Customs (Amendment and Validation) Act, 2011 which validates the past actions/SCNs. (v) The impugned SCNs purport to empower the DRI, DGCEI to issue SCNs even for the period prior to 8th April 2011 and therefore, those SCNs were without jurisdiction and void ab initio. Section 28 of the Act confers authority on the proper officer and not a proper officer or any proper officer . Relying on the decisions in Consolidated Coffee Limited v. Coffee Board (1980) 3 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to. 39. It was submitted that in the normal course, the customs duty is only assessed by the jurisdictional custom officers of the Board. The officers of the Customs (Preventive) have been appointed for the purposes of investigating evasion of customs duty in their specified jurisdictions. The issuing and adjudication of SCNs under Section 28 of the Act usually is undertaken by the jurisdictional Customs officer. 40. According to the Respondents, it is a well-settled legal proposition that the legislature can make a retrospective legislation after curing the defects that led to their invalidation in the first place. A validation Act can be enacted to retrospectively negate the effect of the judgments and orders of competent courts provided the validating legislation removes the cause of invalidity or the basis that had led to those decisions. It was submitted that inadvertent defects in statutes should be permitted to be corrected by the legislature through the device of small repairs . There is no vested right in any of the Petitioners, as a result of the decision of the Supreme Court in Sayed Ali (supra). Reliance was placed on the following passage in Craies on Statue L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act which seeks to deal with the very same period, i.e., the period prior to the date on which the Finance Act, 2011 receives the assent of the President i.e., 8th April 2011. Although what is intended to be done by the legislature, as is evident from the SOR appended to the Validation Act, 2011, is to validate the notices issued prior to 8th April 2011, the opening words of sub-section (11) of Section 28 is a non-obstante clause only in a limited sphere. It makes sub-section (11) apply notwithstanding anything contained in any judgment, decree or order of the Court . It does not make it apply notwithstanding anything contained elsewhere in the same statute or in any other law for the time being in force. 45. There could be different kinds of non-obstante or clarificatory provisions that can be enacted. For e.g., Section 18 (1) of the Act opens with the words notwithstanding anything contained... . Section 12 of the Act opens with the words except as otherwise provided in this Act, or any other law for the time being in force, duties of customs ... Section 28A opens with the words notwithstanding anything contained in this Act . As far as Section 28AA is concerned, it b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served with an SCN dated 5th February 2009 by the DRI on the ground that the electronic goods imported had been mis-declared. The challenge to the SCN and the consequent adjudication was on the basis that the DRI was not competent to issue the notice. A reference was made to an earlier Notification No. 19/90-Cus. (NT) dated 26th April 1990 which dealt with appointment of officials of the DRI as Customs Officers for the area mentioned in column 1 of the Notification which referred to the different states in India or to the whole of India. On the basis of the above Notification and the subsequent Notification dated 6th July 2011, the Bombay High Court negatived the plea that the Central Government and the CBEC have not entrusted or assigned the functions of the proper officer to the Additional Director of DRI . It held that the Notification dated 6th July 2011 refers to Section 17 and 28 of the Act and therefore there was no force in the argument that DRI was not competent to issue the SCN. 49. The judgment in Sunil Gupta v. Union of India (supra), proceeds on the basis of the effect of Section 28(11) of the Act and that it has been given retrospective effect. The judgment does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... administrative chaos that is likely to result, as was pointed out in the Sayed Ali case, would persist. The powers conferred would be overbroad since it would be without any territorial or pecuniary jurisdictional limit. This type of a validation, therefore, does not remove the defect pointed out in the Sayed Ali case. 53. There are two specific assignments of functions in the present context. One is the assignment of the functions under Section 17 and the other is the power of reassessment under Section 28 of the Act. The mere empowering of officers as proper officers will not tantamount to assigning them any specific function of every assessment or reassessment even if it is taken that because the power of assessment under Section 17 has been mentioned there should have been a deemed assignment of that power. Clearly, such power of assessment has to be in relation to a territorial or pecuniary jurisdictional limit. The scope of the Validation Act 54. In this context a brief discussion of what a validation legislation is expected to do is required to be examined. It is perfectly possible and valid for the legislature to remove the defect pointed out by the Court whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [T]here are different modes of validating the provisions of the Act retrospectively, depending upon the intention of the legislature in that behalf. Where the Legislature intends that the provisions of the Act themselves should be deemed to have been in existence from a particular date in the past and thus to validate the actions taken in the past as if the provisions concerned were in existence from the earlier date, the Legislature makes the said intention clear by the specific language of the validating Act. It is open for the Legislature to change the very basis of the provisions retrospectively and to validate the actions on the changed basis. 57. In Bakhtawar Trust v. M.D. Narayan (2003) 5 SCC 298, the Court explained the device of enacting a validation statute in the following words: 14. ...It is well settled that Parliament and State Legislatures have plenary powers of legislation within the fields assigned to them and subject to some constitutional limitations, can legislate prospectively as well as retrospectively. This power to make retrospective legislation enables the legislature to validate prior executive and legislative Acts retrospectively after curing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se is not to destroy any statutory provision or to render it otiose . 60. In State of Tamil Nadu v. Thirumagal Mills Ltd. (1972) 1 SCC 176, it was explained as under: The principle which has been laid down clearly is that validation of tax which has been declared to be illegal may be done only if the grounds of illegality or invalidity are capable of being removed and are in fact removed. Sometimes this is done by providing for jurisdiction where jurisdiction had not been properly invested before. Sometimes this is achieved by re-enacting retrospectively a valid and legal taxing provision and then by fiction making the tax already collected to stand under the re-enacted law. The Legislature can give its own meaning and interpretation of the law under which the tax was collected and by legislative that makes the new meaning binding upon the Courts. None of these methods has been adopted in the present case. See Prithvi Cotton Mills Ltd. v. Broach Borough Municipality . 61. Keeping the above principles in mind when Section 28 has been re-casted by Act 8 of 2011 with effect from 8th April 2011 read with Section 28(11) which was introduced by the Customs (Amendment and Va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vy or erroneous refund prior to 8th April 2011. (vi) It is only for a period between 8th April 2011 and 6th July 2011 that such deemed proper officer can be said to have been given retrospective power to deal with non-levy, short-levy or erroneous refund for any period subsequent to 8th April 2011, i.e., the date on which Section 28(11) read with Explanation 2 could be said to have come into force. Section 28 (11) gives untrammelled power 62. There is merit in the contention that Section 28(11) is overbroad in as much as it confers jurisdiction on a plurality of officers on the same subject matter which would result in chaos, harassment, contrary and conflicting decisions. Such untrammelled power would indeed be arbitrary and violative of Article 14 of the Constitution. 63. A reference requires to be made at this stage to the decision in Sri Balaji Rice Company v. Commercial Tax Officer (supra). In that case, the challenge was to the validity of a government order issued by the Government of Andhra Pradesh whereby Assistant Commissioners and Commercial Tax Officers (Intelligence) were empowered to exercise powers of assessment over the entire State of Andhra Pradesh. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1992. The Bench also held that the conferment of concurrent jurisdiction on several officers in respect of the same area was likely to result in discriminatory consequences, resulting in violation of Article 14. I am in agreement with this reasoning. 65. The attempt by the Department to refer to the SOR to justify overlooking Explanation 2 in favour of Section 28(11) cannot be possibly countenanced. The statute has to be read for what it actually states. It is only where there is some ambiguity which requires clarification that a reference can be made to the SOR as an external aid of construction. However, there cannot be a presumption of validity by reference to such SOR. (See Gujarat University, Ahmedabad v. Krishna Rangnath Mudholkar AIR 1963 SC 703 para 20) Effect of Section 28 (11) 66. The mere fact that Section 28(11) has been given retrospective effect does not solve the essential problem pointed out by the Supreme Court in the Sayed Ali case, which is the absence of the assigning of functions to proper officers under Section 2(34) of the Act. The even more serious problem is the impossibility of reconciling two contradictory provisions, viz., Explanation 2 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act as authorising the officers of the Customs, DRI, the DGCEI etc. to exercise powers in relation to non-levy, short-levy or erroneous refund for a period prior to 8th April 2011 if, in fact, there was no proper assigning of the functions of reassessment or assessment in favour of such officers who issued such SCNs since they were not proper officers for the purposes of Section 2(34) of the Act and further because Explanation 2 to Section 28 as presently enacted makes it explicit that such non-levy, short-levy or erroneous refund prior to 8th April 2011 would continue to be governed only by Section 28 as it stood prior to that date and not the newly re-cast Section 28 of the Act. 70.2 Section 28 (11) interpreted in the above terms would not suffer the vice of unconstitutionality. Else, it would grant wide powers of assessment and enforcement to a wide range of officers, not limited to customs officers, without any limits as to territorial and subject matter jurisdiction and in such event the provision would be vulnerable to being declared unconstitutional. 70.3 As regards the period subsequent to 8th April 2011, it is evident that if the administrative chaos as env ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 011, Section 28 of the Act as it stood prior to that date will apply and not the new Section 28 of the Act. 75. That being the position, the proceedings pursuant to the above SCNs issued by the ADG, DRI regarding non-levy, short-levy or erroneous refund prior to 8th April 2011, cannot be legally sustained and are hereby quashed. All proceedings consequent thereto are also hereby quashed. However, insofar as the SCNs cover the period subsequent to 8th April 2011, the adjudication proceedings shall go on in accordance with law. 76. Writ Petition (C) No. 8196/2013 and the pending application, if any, are accordingly disposed of. Mangali Impex Ltd. 77. The prayer in W.P. (C) No. 441 of 2013 by Mangali Impex Ltd. is for quashing of the SCN dated 31st October 2003 issued under Section 28/124 of the Act. 78. The petition has a long history beginning with samples having been drawn from 27 consignments of Calcium Stearate that were exported by the Petitioner as well as J.K. Impex between November 1998 and January 1999. The Special Intelligence and Investigation Branch ( SIIB ), which is a unit of the Customs Department, raided the premises of the Petitioner and the residence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... main portion of the judgment, the Department cannot seek to rely on Section 28(11) of the Act to validate the SCN issued by the Assistant Commissioner of Customs, SIIB to the Petitioner on 31st October 2003. As has already been held by the Court, Section 28 (11) of the Act cannot validate SCNs or proceedings pursuant thereto in relation to non-levy, short-levy or erroneous refund for a period prior to 8th April 2011 if such SCNs have been issued or proceedings conducted by officers of the Customs, DRI or DGCEI or as in the present case by the SIIB, who are not 'proper officers' within the meaning of Section 2 (34) of the Act. In that view of the matter, the SCN issued to the Petitioner on 31st October 2003 and all proceedings pursuant thereto are hereby quashed. 83. W.P. (C) No. 441 of 2013 and the pending application, if any, are disposed of in the above terms. M/s. Lakshman Overseas 84. The challenge in Writ Petition (C) No. 1185/2013 by M/s. Lakshman Overseas, M/s V-4 Manufacturing Co., M/s Everest Exports and Mr. Ashwani Aggarwal is to an impugned SCN dated 30th April 2010 issued to the Petitioner by the ADG, DRI, Delhi pursuant to a search conducted at the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court in the Sayed Ali (supra) case. 93. Thereafter, on enactment of Section 28(11) of the Act, a Circular dated 23rd September 2011 was issued seeking to validate the actions prior to 6th July 2011. A fresh SCN was issued under Section 124 of the Act on 9th March 2011 by the Commissioner of Customs (Preventive). 94. While directing notice to be issued in the present petition, the Court directed that the adjudication order will not be given effect to. 95. In light of what has been held in the earlier part of the present judgment, it is clear that in relation to the events that took place prior to 8th April 2011 no SCN could have been issued to the Petitioner by the Commissioner of Customs (Preventive) who admittedly is not a proper officer in terms of the Section 2(34) of the Act. Section 28(11) of the Act cannot be resorted to for validating the said SCN and proceedings pursuant thereto. 96. Consequently, the Court quashes the impugned SCN dated 9th March 2011 and the subsequent Circular dated 23rd September 2011 issued by the Department consequent upon the enactment of Section 28 (11) of the Act. Writ Petition (C) No. 7383/2013 and the pending application, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCN dated 3rd April 2013. 103. Pursuant to the notice issued in the present petition, a counter affidavit was filed by the DRI. There is no denial of the fact that at the time when the SCN was issued to the Petitioner by the DRI there was no assignment of the functions of assessment or reassessment under the Act in favour of the DRI in so far as it pertains to events that occurred prior to 8th April 2011. 104. For the reasons explained hereinbefore, Section 28(11) of the Act cannot be relied upon to validate the SCN issued in relation to non-levy, short-levy or erroneous refund for a period prior to 8th April 2011 by officers of the DRI even subsequent to the deeming fiction brought about by Section 28(11) of the Act. 105. Consequently, the Court quashes the impugned SCN dated 3rd April 2013 and all proceedings consequent thereto including the impugned orders dated 23rd May 2013 and 16th December 2013. 106. Writ Petition (C) No. 225/2014 and the pending application, if any, are disposed of in the above terms. Sennheiser Electronics India Pvt. Ltd. 107. The SCN under challenge in Writ Petition (C) No. 863/2014 by Sennheiser Electronics India Pvt. Ltd. is dated 24t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsuant thereto. 117. Writ Petition (C) No. 5262/2014 and the pending application, if any, are disposed of in the above terms. Daikin Airconditioning India Private Ltd. 118. The challenge in Writ Petition (C) No. 5877/2014 by Daikin Airconditioning India Pvt. Ltd. is to one consolidated SCN dated 29th May 2014 was issued to the Petitioner for alleged short levy during the period 27th May 2009 to July 2013. 119. There are three separate Commissionerates at Nhava Sheva, Chennai and Kolkata to which the Petitioner has been made answerable in terms of the said SCN. 120. As far as the period involved covers the period 27th May 2009 to 8th April 2011, it cannot be sustained in law since during the said period the ADG, DRI had no power of assessment or reassessment. To that extent the impugned SCN and all proceedings pursuant thereto for the period prior to 8th April 2011 are hereby quashed. However, for the period subsequent to 8th April 2011 the proceedings may go on in accordance with law. 121. Writ Petition (C) No. 5877/2014 and the pending application, if any, are disposed of in the above terms. Godrej and Boyce Manufacturing Co. Ltd. 122. The prayer in Writ Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ADG, DRI in relation to imports made for the period 24th June 2009 to 8th April 2011. While 8 bills of entry pertain to ICD, Tughlakabad, 6 pertain to Mumbai Port and 2 pertain to ICD, Mulund in Bombay. 131. For the reasons already explained, the said SCN is unsustainable in law and the said SCN and all proceedings pursuant thereto are hereby quashed. 132. Writ Petition (C) No. 9379/2015 and the pending application, if any, are disposed of in the above terms. M/s. J. R. International 133. The SCN impugned in the present petition Writ Petition (C) No. 11041/2015 by M/s. J. R. International is dated 7th November 2013 issued by the ADG, DRI. This, however, pertains to bills of entry in relation to imports of Narrow Woven Fabrics from China during the period 8th November 2008 to 30th November 2010, i.e., a period prior to 8th April 2011. 134. For the reasons already discussed, the said SCN dated 7th November 2013 and all proceedings consequent thereto are hereby quashed. 135. Writ Petition (C) No. 11041/2015 and the pending application, if any, are disposed of in the above terms. Cortel India 136. The challenge in this Writ Petition (C) No. 11285/2015 by Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to Color Picture Tubes imported from January 2009 to February 2011. 146. For the reasons already mentioned, the impugned SCN and all proceedings consequent thereto are unsustainable in law and hereby set aside. 147. Writ Petition (C) No. 11854/2015 and the pending application, if any, are disposed of in the above terms. Rajesh Tripathi 148. The facts of this Writ Petition (C) No. 563/2016 are that searches were conducted in the residential premises of the Petitioner Rajesh Tripathi who is the publisher/owner/controller of Ghaziabad Samasya, Bharat Samasya and Aaj Ki Roshni all newsprint and Light Weight Coated ( LCW ) paper on 28th December 2005 on intelligence that the said parties were evading customs duty by allegedly mis-declaring and undervaluing the import in connivance with the various Registrars of Newspapers in India. Consequent thereto, a SCN bearing DRI F No. 23/118/2005-DZU-Ghaziabad Samasya was issued on 17th December 2007 by the DRI to be adjudicated by the Commissioner of Customs. This resulted in an adjudication order passed by the Commissioner of Customs confirming the demand. The appeal filed before the CESTAT against the said order is still pending ..... X X X X Extracts X X X X X X X X Extracts X X X X
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