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TMI Blog2021 (8) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... er is passed, such objection regarding jurisdiction of the authority if found in the affirmative would vitiate the whole proceedings including the assessment orders or orders passed on an appeal and other orders of the superior authorities. Accordingly, the contention regarding jurisdiction as raised by the second respondent is liable to be rejected. Alternate Remedy - HELD THAT:- The Apex Court in the case of M/s.Canon India Private Limited has unequivocally dealt with the point of jurisdiction of the Officers of DRI in the context of proper officer and in light of the unequivocal findings made there is no necessity for any re-adjudication of such an issue and accordingly, the question of relegating the party to avail of the statutory remedy would not arise. Res Judicata - HELD THAT:- The dispute on hand in the present case however is one that relates to valuation and not as regards to the tariff applicable and that comes out clearly from the contents of the show-cause notice dated 07.01.2008 and this position regarding distinct nature of dispute of the show-cause notice relating to the judgment of the Supreme Court in the case of GIAVUDAN INDIAN PVT. LTD. VERSUS COMMISSIONER OF C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner: Sri S.S. Naganand, Senior Advocate a/w Sriyuths B. Venugopal And Hariradhakrishnan, Advocates Respondents: Sri M.B. Nargund, Additional Solicitor General And Sri Amit Deshpande, Advocate ORDER Writ Petition No.10773/2018 and Writ Petition No.4628/2018 are taken up together and disposed off by a common order in light of the prayer sought for in both the petitions being identical as the Order-in-original Sl.No.BLR- CUSTM-AIR-003/16-17 dated 27.02.2017 at Annexure-G passed by the first respondent has been called in question. 2. Further in both the petitions, a writ of mandamus is also sought to direct the respondent to keep the adjudication proceedings arising out of the show-cause notice dated 07.01.2008 at Annexure-B in call book in terms of the Master Circular bearing No.1053/02/2017-CX dated 10.03.2017 passed by the Central Board of Excise and Customs. The petitioner in W.P.No.4628/2018 is the Company, while the petitioner in W.P.No.10773/2018 is the Director of the Company. 3. The relevant facts are that the petitioner Company (in W.P.4628/2018) is stated to be engaged in the business of trading and manufacture of flavours and fragrances and is stated to be 100% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 827/2018 and connected matters) has laid down the law as regards to the aspect of who is 'the proper officer' for the purpose of Section 28 of 'The Customs Act, 1962' and wherein the proceedings initiated by the Additional Director General of DRI who had issued the show-cause notice was declared invalid as he was not a 'proper officer' as defined under the Act and that the said judgment would enure to the benefit of the petitioners also insofar as orders-in-original that were passed which were the subject matter of litigation has commenced with show-cause notice dated 07.01.2008 which was issued by the Additional Director General of Directorate of Revenue Intelligence, Bengaluru ("DRI" for short) who has been held as not being 'the proper officer'. It is contended that in light of the said judgment in M/s. Canon India Private Limited (supra), the impugned Order-in-Original dated 27.02.2017 which was culmination of the proceedings starting with the show-cause notice issued by an incompetent authority is liable to be set aside. 10. Sri. M.B.Nargund, the learned Additional Solicitor General appearing for the second respondent has argued exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein, while noticing the identical contention raised regarding the definition of 'the proper officer' in the context of the judgment in M/s.Canon India Private Limited (supra), the court was of the view that as against the orders-in-original passed by the Authorities as there was a remedy by way of an appeal under Section 128 and 129 of the Customs Act, the petitioners having approached the court directly without exhausting such remedy ought to be relegated to avail of the substantive remedy of filing an appeal. 12. It was further contended that the case of M/s.Canon India Private Limited (supra) cannot be made applicable without examining the relevant facts and it was submitted that the court needs to keep in mind that Section 28(11) remains undisturbed and accordingly, the petitioners are not entitled for the relief sought for. It was further pointed out that the question of jurisdiction for issuance of show-cause notice and that the officer of the Directorate of Revenue Intelligence is not 'the proper officer', has not been taken note of at the first instance. 13. It was submitted on behalf of the petitioners while adverting to the contention of res judicata ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015) 1 SCC (LS) 582 and has drawn attention to the observation of the Apex Court that it is not open for the High Court to go beyond the judgment of the Apex Court and hold that it is per-incurium. Attention is also drawn to the judgment of the Apex Court in the case of Suganthi Suresh Kumar vs. Jagdeeshan reported in AIR 2002 SC 681 to contend that it is a matter of discipline that in light of Article 141, the law declared by the Supreme Court is to be followed and the correctness of the said judgment cannot be gone into even if the point urged has not been considered by the Supreme Court. 16. It is also submitted that the proceedings in the present case relates to the period 2003-07 and that the law that would be applicable would be that of the Apex Court in the case of Commissioner of Customs vs. Sayed Ali reported in 2011 (265) E.L.T. 17 (SC) and the subsequent amendment made to Section 28 including Section 28 (11) would only be prospective and this is made clear by virtue of Explanation 2 to Section 28 which clarifies that with respect to non-levy, short-levy or erroneous refund before coming into force of the Finance Bill 2011, the same would be continued to be governed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration is : "Whether the Order-in-Original dated 27.02.2017 is liable to be set aside as not being passed by a proper Officer in light of the judgment of the Apex Court in the case of M/s.Canon India Private Limited vs. Commissioner of Customs ?" 22. Prior to answering the aforesaid point for consideration, certain other objections raised regarding maintainability of the present petitions and calling upon the court to dismiss the petitions and bar the petitioners from availing the discretionary jurisdiction under Article 226 of the Constitution of India, due to suppression of facts and also on the ground of res judicata is required to be answered. 1) Objection to Jurisdiction raised at a belated stage: (i) It was the contention raised on behalf of the second respondent that the petitioners had not raised the objection to jurisdiction at the first stage of adjudication. (ii) It is not in dispute that the proceedings that were initiated at the first instance was remanded for fresh consideration to the authority as per the order dated 20.01.2016 and in such de novo enquiry, the contention regarding absence of jurisdiction has been raised. This comes out un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory right of appeal by itself would not bar the court from entertaining the writ petition. It would be appropriate to refer to the judgment of the Apex Court in the case of Whirlpool Corporation (supra), wherein the Apex Court at Para 15 has observed that in case of three contingencies, a writ could be directly entertained viz., where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of principles of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. The said observation reflects a position of settled law with respect to which there is no dispute. (iv) The Apex Court in the case of M/s.Canon India Private Limited (supra) has unequivocally dealt with the point of jurisdiction of the Officers of DRI in the context of proper officer and in light of the unequivocal findings made there is no necessity for any re-adjudication of such an issue and accordingly, the question of relegating the party to avail of the statutory remedy would not arise. 3) Res judicata: (i) As has been observed above, it is the contention putforth by the second responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oup companies of Givaudan Switzerland and wrong availment of concession under Sl.No.119 of Customs Notification No.21/02 dtd. 01.03.02. This importer admitted the fact of suppression and misdeclaration of alcohol content and availment of ineligible concession under Customs notification No.21/02 dtd. 01.03.02 and paid ₹ 2.10 Crores during the stage of investigation itself before the issue of Show Cause Notice No.S/IV/16/2006 dtd. 25.01.07. 3. During the course of investigation of the offence case mentioned in para 2.2 above, the preliminary scrutiny of seized records/data downloaded by DRI revealed that the imports of aromatic chemicals [termed as Fragrance Ingredients Business Unit (FIBU) items] made by VPL were undervalued and the undervaluatoin was found to be in the range of 3% to 375% during the period 2002 to 2007. The said undervaluation has been witnessed from the following: (i) The evidences such as the International price lists for FIBU items issued by Givaudan Suisse, S.A. Switzerland to VPL. (ii) FIBU items price lists issued to various independent Indian importers, which were unearthed from the seized documents, computers and documents recovered from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material on record and does not involve any complicated factual enquiry necessitating relegation of the parties to the remedy of appeal. Accordingly, the question of res judicata would not be a bar to the adjudication of the present proceedings nor does it necessitate the relegating authority to avail of the statutory remedy of appeal. (viii) In fact, it ought to be noticed that during the previous round of litigation, the question of proper officer was not considered by the Apex Court nor raised and even otherwise, during the pendency of the present proceedings the judgment of the Apex Court in the case of M/s.Canon India Private Limited (supra) has clarified as to who is the proper officer, and it cannot be stated that the assessee is debarred from taking the benefit of law laid down by the Apex Court which goes to the root of the matter. In light of the law laid down by the Apex Court, the officer who has issued the show-cause notice clearly does not have jurisdiction and if that were to be so, the assessment orders are liable to be set aside on that sole ground. (ix) It is also pointed out at the time of dictating the order that the Apex Court in the case of Givaudan Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates to the show cause notice dated 07.01.2008 which relates to the period prior to 2011. Certain amendments were made to the Customs Act, 1962 in 2011. Under Section 28 of the Customs Act as was applicable during the relevant period of time, the power is vested in 'the proper officer' to take action where duty has not been levied or has been short-levied or erroneously refunded and such proceedings was to be taken by 'the proper officer.' Subsequent to the amendment of Section 28, 'the proper officer' still retains jurisdiction, though there are certain procedural modifications. (ii) The aspect of who is 'the proper officer' as regards to Section 28 of the Customs Act prior to the amendment was considered by the Apex Court in the case of Commissioner of Customs v. Sayed Ali and Another reported in (2011) 265 ELT 17. Subsequent to the judgment of Apex Court in Sayed Ali's case (supra), certain amendments were effected to the Customs Act, including the introduction of Section 28(11) inserted by the Customs (Amendment and Validation Act) 2011 with effect from 16.09.2011 to the effect that "..... all persons appointed as officers of Customs un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Apex Court while referring to ' the proper officer' found in Section 28 has specifically recorded a finding that it is only 'the proper officer', and 'that proper officer' alone can adjudicate the matter. Further Apex Court has clarified at para 15 as follows: "15. ...... We find it completely impermissible to allow an officer, who has not passed the original order of assessment, to re-open the assessment on the grounds that the duty was not paid/not levied, by the original officer who had decided to clear the goods and who was competent and authorised to make the assessment. The nature of the power conferred by Section 28(4) to recover duties which have escaped assessment is in the nature of an administrative review of an act. The section must therefore be construed as conferring the power of such review on the same officer or his successor or any other officer who has been assigned the function of assessment. In other words, an officer who did the assessment, could only undertake re-assessment [which is involved in Section 28(4)]." Accordingly, the Apex Court has held that Section must therefore be construed as conferring the power of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra) clearly, the proceedings that have been initiated by issuance of a show cause notice dated 07.01.2008 by the Additional Director General, DRI is also liable to be set aside in light of the law laid down by the Apex Court as referred to above. 23. While judgment of High Court of Madras in the case of Commissioner of Customs (Air) vs. M/s. Premier Tours & Travels (Chennai) Pvt. Ltd. and another, in C.M.A. No.2746/2009 and M.P. No.1/2009 dated 04.02.2021 where identical contentions were raised and the consideration of such aspect has been relegated to be decided in the appeal, however this Court does not find any reason to take the same view, in light of the clear findings in the case of M/s.Canon India Private Limited (supra) which does not leave any scope for further adjudication and the law laid down by the Apex Court ought to enure to the benefit of the petitioners. 24. It needs to be noted that the High Court of Madras (Madurai Bench) by order dated 16.03.2021 in the case of Quantum Coal Energy Pvt. Ltd. vs. The Commissioner of Customs in W.P.(MD) Nos.10186 & 10187 of 2014 and M.P.(MD) Nos.1 & 1 of 2014 has taken a different stand by setting aside the proceedings initiated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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