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TMI Blog2018 (1) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... The demands of duty and / or imposition of penalties on the appellants herein which have been confirmed in the impugned orders cannot sustain - appeal allowed. - C/289/2009, C/313/2009 C/314/2009 C/316/2009 C/317/2009 C/318/2009 C/319/2009 C/324/2009 C/325/2009 C/328/2009 C/329/2009 C/330/2009 C/331/2009 C/332/2009 C/333/2009 C/522/2009 C/523/2009 C/172/2010 - Final Order No.40048-40065/2018 - Dated:- 9-1-2018 - Ms. Sulekha Beevi C.S. Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) S/ Shri S.Murugappan, G. Derrick Sam, Leejoy Mathew, Mansoor Elahi, Advocates Ms. Minchu Mariam Punnoose, Advocate For the Appellants Shri A. Cletus, ADC (AR) Sheri S.Govindarajan, AC (AR) For the Respondent ORDER Per Bench All these appeals relating to the question of imposability of penalty under Section 114 (iii) of the Customs Act, 1962 on the Custom House Agents/Shipping Lines in respect of alleged drawback fraud committed by concerned exporters, are taken up for common disposal. 2. The facts of the case are that on intelligence gathered by the Directorate of Revenue Intelligence (D.R.I.), investigations were conducted in respect of various consignment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notices and that D.R.I officers have no jurisdiction to issue such SCNs. (iii) The proceedings in all these appeals will not sustain ab initio since the SCNs themselves are not valid. (iv) When the recovery of drawback itself in these SCNs is not sustainable, therefore the consequential proposals for imposition of penalty and confiscation also will not sustain. (v) In all the appeals filed by M/s.Manasa Impex (Appeal Nos.C/289/2009, C/318/2009, C/328/2009, C/331/2009) the concerned SCNs have also proposed recovery of the allegedly irregular availed drawback amounts from them jointly and severally. (vi) However, in respect of other appellants there have been no proposals in the concerned SCNs for recovery of drawback from them and there is only proposal to impose penalty against them. Without determination or decision on the recoverability of the drawback amounts, there can be no imposition of penalty on persons who are the exporters or the CHAs/ freight forwarders/shipping line. (vii) A single SCN cannot be held as invalid for one portion and valid for another portion. 4. On the other hand, Ld.A.R Shri A. Cletus supports the impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quently followed in the number of decisions referred (supra). It is seen that after declaration of law by the Hon ble Supreme Court in the case of Syed Ali, the law was amended with retrospective effect conferring jurisdiction on DRI officers as also on Commissioner of Customs, (Prev.) for the purpose of issuance of Show cause notice in terms of Section 28 of the Customs Act with retrospective effect. However, no such amendment was made in respect of show cause notices issued under Rule 16 of Drawback Rules, 1995. Infact it is seen that even when the law was amended subsequently, on 6-7-2011 and Section 28 was amended retrospectively with effect from 16-9-2011, the Boards Circular No. 24/2011 was issued on 31-5-2011, wherein the issuance of show cause notice in terms of Rule 16 of Drawback Rules was considered and the proper officers were specified only in relation to the monetary limits. In the said circular, DRI officers were never considered to be proper officers for demanding drawback under Rule 16. There was no retrospective amendment carried out in the said Rule 16 so as to confer jurisdiction on the DRI officer for issuance of show cause notices. Bombay High Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue Intelligence (DRI) under Rule 16 16A of the Drawback Rules read with Section 75A (1) and 124 of the Customs Act, 1962. The impugned orders which have resulted in these appeals inter alia demands recovery of irregularly availed drawback amounts against the exporters. The exporters implicated in these cases are not parties before the Tribunal in these appeals. 5.3 The adjudication orders have also imposed penalties on the Custom House Agents, Steamer Agents, Shipping Lines, Logistics Services etc. on the grounds that they have not observed due diligence in verifying the correctness of information given by their clients and have or otherwise by their acts and omissions abetted fraudulent claims of drawback by the exporters concerned. Penalties have been imposed on these agents etc. under Section 114 (iii) and 117 of the Customs Act, 1962. 5.4 The common contention of all the appellants herein is that SCNs have been issued by the DRI under Rule 16 and 16A of the Drawback Rules and hence are not valid since the DRI officers have no jurisdiction to issue such notices. The Ld. Advocate for appellants have drawn our attention to Tribunal s decision in the case of Monte Inter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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