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TMI Blog2016 (8) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... sely and cohesively towards avoiding loss thereof. Central Excise Officers deemed to be Customs Officers had gathered material which forms the basis of the show cause notice. Such Excise officials/ Customs officers are deemed to be proper officers for the purposes of Sections 17 and 28 of the Customs Act, 1962. Thus, when viewed through the prism of Section 28(11) of the Customs Act, 1962, it can be seen that what petitioners are complaining about is what really is in the nature of intra departmental communications, a course not open to them. It is for the company to respond to the show cause notice and satisfy the authority concerned that the allegations against them are unfounded. The contention of the company having met its export obligations with the consequence that it was free to dispose of imported materials is also to be raised only before the authority concerned. We find no merit either in the W.P.(MD) No.626 of 2015 or W.A.(MD) No.705 of 2011. Accordingly, both the writ petition and writ appeal are dismissed. No costs. - Writ Appeal (MD) No.705 of 2011 & Writ Petition (MD) No.626 of 2015 and M.P.(MD) Nos.1 of 2011 and 1 of 2014 in W.A.(MD) No.705 of 2011 and M.P.(M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (o) and 111 (d) of the Customs Act 1962 for violation of the conditions of the Notifications and provisions of the Foreign Trade Policy subject to which they were allowed clearance and as the goods are not available for confiscation, and since exemption under the said Notifications were extended against the bonds executed by them, why redemption fine should not be imposed in terms of the said Bonds under Section 125 of the Customs Act 1962; (d) a penalty should not be imposed on them under Section 112(a)(ii) of the Customs Act, 1962. 53. Shri S.Varadharajan, Vice President, M/s.Sterlite Industries (India) Ltd, DTA Unit, Tuticorin is, hereby required to show cause to the Commissioner of Customs, Custom House, Tuticorin within 30 days of receipt of this notice as to why a penalty should not be imposed on him under Section 112(b) of the Customs Act, 1962 for abetting the commission of the above offence by SIIL. 54. M/s.Sterlite Industries (India) Ltd, Unit-I and Shri S.Varadharajan, Vice President, M/s.Sterlite Industries (India) Ltd, Unit-I are directed to produce all the evidences upon which they intend to rely in support of their defense. They may also state in their writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, Tuticorin/sixth respondent issued summons in C.No.IV/06/02/2010-DPU dated 26.07.2010 calling for appearance of the company officials. Having challenged the communication dated 08.06.2010 and 09.06.2010 in W.P.(MD) Nos.8123 and 8135 of 2010, the Company moved W.P.(MD) No.9744 of 2010 seeking issuance of a writ of mandamus directing the first respondent to appoint 'proper officers' of customs to investigate and examine issues, if any, not arising or connected to orders passed by the fourth respondent dated 08.06.2010 and 09.06.2010 inasmuch as respondents 3 to 6 lack jurisdiction to enquire into the alleged offences under the Customs Act, 1962 and the Foreign Trade Regulation Act, 1994 read with the EXIM policy and in any way have disqualified themselves to enquire any further into the matter in view of the personal bias and malice in fact and law which stands reflected in the arbitrary and high-handed manner in which the present proceedings have been conducted so far in willful disobedience of the order of this Court. The summons dated 26.07.2010 was challenged in W.P.(MD) No.9745 of 2010. Under common orders in W.P.(MD) Nos.9744 and 9745 of 2010 dated 29.04.2011, a lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice. Learned senior counsel submitted that the show cause notice in paragraph No.50 informed that the company attempted to redeem its advance licenses by DGFT suppressing the fact regarding violation of Foreign Trade Policy and the same was indicative of the malice of the Commissioner of Customs, Tuticorin, against the company. Learned senior counsel further submitted that in requiring the DGFT to keep the issue of redemption under abeyance pending vacation of stay and issuance of show cause notice under C.No.VIII/48/55/2014-SIIB dated 14.08.2014 was totally without jurisdiction. 6. Mr.C.Natarajan, learned senior counsel for petitioner, submitted that though the Commissioner of Customs, Tuticorin, was empowered to issue the show cause notice in C.No.VIII/48/61/2013-SIIB dated 13.01.2015, he had done so not on his own accord but at the instance of Commissioner of Central Excise, Tirunelveli. The draft show cause notice had been prepared by one who is not a Proper Officer. Learned senior counsel referred to copies of communication obtained under the Right to Information Act. Learned senior counsel also referred to the following in the communication in C.No.VIII/10/4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Videtur He who does an act through another is deemed in law to do it himself, to submit that the Commissioner of Central Excise, Tirunelveli, has used the hands of the Commissioner of Customs, Tuticorin, to carry out his intention and as such the show cause notice must be seen as one issued by him. Learned senior counsel contended that issue of show cause notice was quasi-judicial in nature and the power to do so must be exercised in a neutral and untainted manner. Learned senior counsel submitted that a reading of the show cause notice informed overt hostility towards the company and indicated lack of neutrality on the part of Commissioner of Customs, Tuticorin, who issued the show cause notice, abdicating his responsibility. Learned senior counsel referred to the following observations in Orient Paper Mills Ltd. v. Union of India [1969(1) SCR 245]: 8. If the power exercised by the Collector was a quasi judicial power as we hold it to be that power cannot be controlled by the directions issued by the Board. No authority however high placed can control the decision of a judicial or a quasi judicial authority. That is the essence of our judicial system. There is no provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the present writ appeal. It contains a preamble which seeks to justify the issue thereof and informs thus: Thus, there is no restraint on the Department from issuing this SCN. The earlier orders passed by the Hon'ble Court were only up to 28.09.2011 and no restraining order has been passed today either. Hence, this SCN is being issued without prejudice to any order of the Hon'ble High Court in the aforesaid Writ Appeals and any other related Petitions. This SCN shall be kept pending and shall not be adjudicated unless and until directions are obtained from the High Court enabling such adjudication. 10. Learned senior counsel contended that in the decision in Siemens Ltd. v. State of Maharashtra and others [2006 (12) SCC 33], the Apex Court had held that a show cause notice issued with premeditation may be challenged by way of writ petition since directing the authority to hear the matter afresh would not yield any fruitful purpose. Reliance was also placed on the judgment of this Court in Rajam Industries P Limited v. DCTO, Sriperumbudur Assessment Circle and another [2010 (34) VST 303 (Mad.)]. 11. Mr.P.Paul Pandi, learned Central Government Standing Counsel, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorised officer competent to issue show cause notice. Such finding had not been challenged. The notice of the Assistant Commissioner of Central Excise, Tuticorin, dated 08.06.2010 referred to a matter exclusively of the concern of the Central Excise Department. 13. Mr.B.Vijay Karthikeyan, learned counsel for Customs, referred to amendment to Section 28 of the Customs Act. Section 28 of the Customs Act, as amended, reads as follows: 2. In section 28 of the Customs Act, 1962, after subsection (10), the following sub-section shall be inserted, namely:- (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 as officers of Customs under sub-section (1) of section 4 before the 6th 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. 14. Learned counsel submitted that such amendment came about pursuant to judgment of the Apex Court in Commissioner of Customs vs. Sayed Ali and another, Civil Appeal Nos.4294 and 4295 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the show cause notice had been issued. In the decision in Sunil Gupta v. Union of India [2015 (315) E.L.T. 167 (Bom.)], the High Court of Bombay, had held thus: 23. We have found that Section 28(11) was inserted by Act 14 of 2011 w.e.f. 16th September, 2011. That alters the basis of the Judgments, which have been delivered by any Court of law, Tribunal or other autority. Once this section says that all persons appointed as officers of Customs under Section 1(4) before 6th July, 2011 shall be deemed to have been and always to be the proper officers for the purpose of this section, then, the Notifications, which are referred by us above at page 369 and 373 of the paper book are specifically saved and validated. They have been given a retrospective effect. These Notifications were holding the field and were not quashed or set aside. In the teeth of such Notifications, the legislature stepped in to clarify the position that if the functions of the Customs Act, 1962, then, all such Notifications, have been validly issued and enforced. They enable the Parliament to clarify that the officers mentioned therein shall be deemed to be the proper officers for the purposes of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly upto 28.09.2011 both Customs and Central Excise Departments had moved petitions to vacate stay and taken steps to have the same listed by letters dated 17.09.2011 and 07.09.2014 addressed to the Registrar and cited that huge Government revenue is at stake. The same was done only by way of abundant caution and informing the position in the preamble show cause notice could not be complained against. The excise authorities having access to the manufacturing units of the company, had, on the basis of verification of records maintained therein as also the submissions of the Companies, employees, had learnt that goods manufactured duty free and which were bound for export, willfully were cleared into the local market as if the same had suffered duty on import. Such major violation having taken place out of duty free imports under advance licence availed of through Customs Department at the Tuticorin Court, a draft show cause notice had been prepared and forwarded to the authority, who had issued the show cause notice. As per the Notification No.31/97 Cus (NT) dated 07.07.1997 all Central Excise Officers are Customs Officers and hence, it is wrong to contend that the Central Excise O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overed whereas in communication dated 09.06.2010, besides the issue of availment of Cenvat Credit, it also dealt with misuse of advance license scheme in procurement of duty free copper concentrate. While disposing of W.P.No.8135 of 2010, this Court clearly has held that there shall be stay of the communication dated 09.06.2010 insofar as it relates to non-compliance of Cenvat Credit Rules only. No stay was granted regards misuse of advance license scheme. 16. This Court has considered the rival submissions and perused the materials on record. 17. We straightaway would observe that the distinction between a 'proper officer' and 'customs officer' has been missed in the order of learned Single Judge. Even so, we do not find reason to interfere. The entire matter is to be considered in the light of amendment to Section 28 of the Customs Act, 1962 and introduction of sub-section 11 thereto. Superintendents of Central Excise working in any place in India were appointed as officers of Customs under notification No.31/97 Cus (NT) dated 07.07.1997. Once subsection 11 of Section 28 of the Customs Act, 1962, informs us that officers of Customs would be deemed to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e' was indicative that the same had not been issued in a predetermined manner. We have perused the order in W.P.(MD) No.8135 of 2010 and found that learned counsel for Customs is right in informing that there was no impediment to the issue of show cause notice regards misuse of the advance license scheme and the pendency of the writ appeal would not stand in the way. In the light of Section 28(11) of the Customs Act, 1962, a discussion on whether Central Excise Officers are empowered to investigate customs violations becomes unnecessary. The decision of the Apex Court in Grindlays Bank Ltd. v. Income-Tax Officer, Calcutta and others [(1980) 122 ITR 55 (SC)], carves out an exception to the general rule that a show cause notice cannot be challenged by way of writ proceedings. We have herein above informed why we do not consider the show cause notice premeditated. It is for the company to respond to the show cause notice and satisfy the authority concerned that the allegations against them are unfounded. The contention of the company having met its export obligations with the consequence that it was free to dispose of imported materials is also to be raised only before the authori ..... X X X X Extracts X X X X X X X X Extracts X X X X
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