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TMI Blog2022 (4) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... as proper officers for the purpose of the said section. The question, however, as to whether by virtue of the notifications dated 07.07.1997, 07.03.2002 and 06.07.2011, the DRI would have the authority to act under Section 28 of the Customs Act and whether by virtue of the decision of the Hon'ble Supreme Court in the case of COMMISSIONER OF CUSTOMS VERSUS SAYED ALI [ 2011 (2) TMI 5 - SUPREME COURT] this position would be altered. It is evident from the notification dated 07.07.1997 that all officers of the DRI are appointed as officers of the Customs under the notification dated 07.03.2002. The officers of the Directorate of Revenue Intelligence have been given jurisdiction over the whole of India. From the perusal of the notifications circulars and clarifications issued from time to time it is more than apparent that the Respondent No.2 had the jurisdiction to issue impugned show cause notice and the Respondent No.4 has the jurisdiction to adjudicate the same. The show cause notice under Section 28(1) could be issued by the Proper Officer . A Proper Officer is one, who is defined in Section 2(34) as the officer of Customs, either by the Board or by the Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise and Service Tax Kanpur are two different officers, the former being a non-existent and the later being not the Proper Officer under Section 2(34) or an officer appointed under Section 4(1) of the Customs Act, 1962 and thus lacking jurisdiction to adjudicate the proceedings under Section 28 of the Customs Act pursuant to the impugned show cause notice dated 22.06.2011. Accordingly, a relief to quash the further proceedings, pursuant to the show cause notice dated 22.06.2011 issued by the Respondent No.2 so far as it relates to the petitioner, has been sought. In the alternative, a direction in the nature of mandamus has been sought to direct the Respondent No.4 to proceed with the adjudication of the show cause notice only after making available the documents/evidences etc. sought to be summoned by the petitioner vide its submission dated 09.02.2021 and affording an opportunity of cross examination of the witness relied upon by the DRI. 4. The facts shorn of unnecessary details relevant for the purpose of deciding the writ petition briefly stated are that the petitioner is a company engaged in the business of manufacture and export of finished leather having IEC No.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... personal hearing before the Respondent No.3. The petitioner on receipt of the Notice is stated to have filed a detailed objection alleging incompetence of the Respondent No.4 to adjudicate the matter in terms of Section 32(4) of the Customs Act, which objections are stated to be pending. Besides, the above objections the petitioner is stated to have filed detailed written submissions dated 09.02.2021 with request to be made available all documentary evidences and for affording opportunity to cross examine which too is stated to be pending consideration with the respondents. 6. The counsel for the petitioner has assailed the show cause notice dated 22.06.2011 as also the entire proceedings consequent thereto principally on the following grounds:- (i) The Respondent No.4 has no authority in law to adjudicate the show cause notice dated 22.06.2011 and the Respondent No.2 has no authority in law to issue the impugned show cause notice dated 22.06.2011. (ii) The Respondent No.2 is not competent to issue show cause notice under Section 75 of Customs Act read with Rule 16 of the Drawback Rules, 1995. (iii) Proposal for confiscation and imposition of penalties conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is wholly without jurisdiction and without authority of law. Reliance has been placed upon Para 22 of the decision of the Apex Court in Canon India Private Limited versus Commissioner of Customs (2021 SCC Online SC 200) to buttress the above submissions wherein the Apex Court held that the Notification No. 40 of 2021 dated 02.05.2021 as invalid having been issued by an Authority which had no power to do so in purported exercise of powers under a section which does not confer any such power. The Para No. 22 of the decision is quoted here-under: If it was intended that officers of the Directorate of Revenue Intelligence who are officers of Central Government should be entrusted with functions of the Customs officers, it was imperative that the Central Government should have done so in exercise of its power under Section 6 of the Act. The reason why such a power is conferred on the Central Government is obvious and that is because the Central Government is the authority which appoints both the officers of the Directorate of Revenue Intelligence which is set up under the Notification dated 04.12.1957 issued by the Ministry of Finance and Customs officers who, till 11.5.2002 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62 appointing the Commissioner of Customs, Central Excise and Service Tax, Kanpur as officer of Customs, such officers are the Proper Officer s within the meaning of Section 2 (34) of the Customs Act, 1962 and in such view of the matter, the DRI Officer are competent to issue notices for adjudication under Section 28 of the Customs Act, 1962. He further submits that in view of the law laid down by the Hon'ble Supreme Court in the case of Canon India Private Limited versus Commissioner of Customs (2021 SCC Online SC 200) , the jurisdiction has been conferred by the statute upon the officers of DRI which cannot be taken away either by any law or by any judgment. Reliance is placed upon the decision of the Hon'ble Supreme Court in the case of Pahwa Chemicals (P) Ltd. versus Commissioner of Central Excise, New Delhi [2005 (2) Supreme Court Cases 720] . He further submits that the reliance placed by the counsel for the petitioners upon the decision in the case of Canon India Pvt. Ltd. (supra) is completely misplaced as neither the aforementioned notifications nor the provisions of Section 28 (11) of the Customs Act, 1962 have been considered therein. He goes on to submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit for provisional release of the goods. Section 28 of the Customs Act pertains to recovery of duties not levied or short-levied or erroneously refunded and provides for a complete mechanism for recovery of duties not levied or short-levied or erroneously refunded or any interest has been paid, part paid or erroneously refunded in which case Proper Officer shall serve a notice on the person chargeable with the duty or interest requiring to show cause why he should not pay the amount specified in the notice. The period of limitation prescribed for issuance of the notice is one year in normal cases and extended period in cases of collusion, willful misstatement or suppression of facts is five years. 16. As noticed herein above, that under Section 2(34) of Customs Act, 1962 a Proper Officer is defined as a person in relation to any function to be performed under the Act to mean the Officer of Customs who is assigned those functions by the Board or Commissioner of Customs. Thus, the Proper Officer is a person, who has been assigned functions by the Board or the Commissioner of Customs in relation to such functions to be performed under the Act. 17. The Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment u/s 17 and shall be deemed to have been and always had been the proper officers for the purposes of this section. 19. The Board in its Circular dated 23.09.2011, in connection with the newly added sub-Section (11) of Section 28, clarified as under:- *** **** *** 2. Further, as a prospective remedial measure, in terms of Section 2(34) of the Act, 1962, the Board issued Notification No. 44/2011-Customs (N.T.) dated 6-7-2011. By virtue of this notification, officers of Directorate General of Revenue Intelligence (DRI), Commissionerates of Customs (Preventive), Directorate General of Central Excise Intelligence (DGCEI) and Central Excise Commissionerates were assigned the functions of the 'proper officer' for the purposes of Sections 17 and 28 of the said Act. *** **** *** 4. Accordingly, as per the amended Section 28 of the Customs Act, 1962, show cause notices issued prior to 6-7-2011 by officers of Customs, which would include officers of Commissionerates of Customs (Preventive), Directorate General of Revenue Intelligence (DRI), Directorate General of Central Excise Intelligence and similarly placed officers stand validate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igence post or a Customs warehouse. 3. Superintendents, and Inspectors of Central Excise Department in any place in India. 4. All Officers of the Directorate of Revenue Intelligence. 5. All Officers of the Narcotics Control Bureau. 6. All Intelligence Officers of the Central Economic Intelligence Bureau. 23. Under Notification dated 07.03.2002, the Government of India appointed officers mentioned in Column No. 2 of the table, notification dated 07.03.2002 provided as under:- S.O. (E). - In exercise of the powers conferred by sub-section (34) of Section 2 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise and Customs hereby assigns the functions of the proper officer to the following officers mentioned in column (2) of the Table below, for the purposes of Section 17 and Section 28 of the said Act, namely:- Sr. No. Designation of the Officers 1. Additional Director Generals, Additional Directors or Joint Directors, Deputy Directors or Assistant Directors in the Directorate General of Revenue Intelligence. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned in Column No. 2 of the Table corresponding functions mentioned in column No. 3 thereof. Relevant portion of the Table reads as under:- Sl. No. Designation of the officers Functions under Section of the Customs Act, 1962 *** *** 4. Deputy Director or Assistant Director in the Directorate General of Revenue Intelligence and Directorate General of Central Excise Intelligence (i) Section 28B; and (ii) Section 72 *** *** 6. Intelligence Officer in the Directorate General of Revenue Intelligence and Directorate General of Central Excise Intelligence (i) Section 37; (ii) Section 100; (iii) Section 103; (iv) Section 106; (v) Section 106A; (vi) Sub-sections (1) and (3) of Section 110; (viii) Section 144; and (ix) Section 145 *** *** ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DRI F.No/VIII/DRI/LZU/2 6/26/2008/Crescent dated 04.04.2011 Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow. M/s Crescent Tanners Pvt. Ltd., Kanpur 3 DRI F.No.VIII/DRI/LZU/2 6/26/2008/Iqbal dated.05.04.2011 Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow. M/s Iqbal Leathers Limited, Kanpur 4 DRI F.No/VIII/DRI/LZU/2 6/26/2008/Model Exims dated 06.04.2011 Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow. M/s Model Exims, Kanpur 5 DRI F.No/VIII/DRI/LZU/2 6/26/2008/Allied Leather dated.07.04.2011 Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow. M/s Allied leather Finishers Pvt. Ltd., Kanpur 6 DRI F.No.VIII/DRI/LZU/2 6/26/2008/Seema dated.08.04.2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I/LZU/26/26/2008/Indian/704 both Dt.13.06.2011 The Commissioner of Customs Export, JawaharLal Nehru Custom House, Nhava Sheva, Tal Ura, District Raigarh, Maharashtra- 400707. M/s Indian Tanning Industries, Kanpur 14 F.No.S-10/Misc.- 14/1/2011-12 Adj(X) VIII/DRI/LZU/26/26/2 008/The Const/779 both Dt.22.06.2011 The Commissioner of Customs (Export), JawaharLal Nehru Custom House, Nhava Sheva, Tal Ura, District Raigarh, Maharashtra- 400707. M/s The Construction and Industries Ltd., c.No.VIII/(6)/ICD/Cus/KNP/197/ 2000 Dt.23.06.2011 (b)The Assistant Commissioner (Customs) ICDChakeri, Kanpur 15 F.No.S-10/Misc./14/02/2011- 12-12 Adj(X) VIII/DRI/LZU/26/26/2 008/Sultan/738 both Dt.22.06.2011 The Commissioner of Customs (Export), JawaharLal Nehru Custom House, Nhava Sheva, Tal Ura, District Raigarh, Maharashtra- 400707. M/s Sultan Leather and Tanneries Products Ltd. 16 DRI.F.No.VIII/DRI/LZ U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow. M/s Best Tanning Industries (P) Ltd., Kanpur (M. V. Vasudevan) Under Secretary to the Government of India F.No.437/17/2011 Cus. IV 29. Then again the Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise and Customs vide Circular dated 09.06.2015 regarding appointment of common adjudicating authority it was directed as under:- Circular No. 18/2015- Customs F.No. 450/145/2014- Cus IV Government of India Ministry of Finance Department of Revenue Central Board of Excise and Customs New Delhi, Dated: 09.06.2015 To All Chief Commissioner of Customs / Customs (Preventive) All Chief Commissioners of Customs and Central Excise All Commissioners of Customs All Commissioners of Customs and Central Excise Sir / Madam, Subject: Appointment of common adjudicating authority regarding Reference is invited to Notification No 60/2015-Customs (N.T.), dated 04.06.2015 whereby the power to appoint common adjudicating author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pending cases where common adjudicating authorities have not been appointed so far or where the common adjudicating authorities have been appointed but adjudications have not been done should be disposed of expeditiously in terms of aforementioned guidelines. However, while doing so in regard to the latter category of cases, Principal DG, DRI will take into consideration the fact whether or not personal hearings have taken place and the stage of passing the adjudication order. This is to ensure that cases about to be finalized are not reallocated to another adjudicating authority thereby defeating the objective of expediting the finalization of disputes. 5. Difficulty faced, if any, may be brought to the notice of the Board at an early date. Yours faithfully (Pawan Khetan) OSD (Customs IV) 30. Further, vide Circular dated 17.10.2018 the Government of India, Ministry of Finance, Department of Revenue (Central Board of Indirect Taxes and Customs) issued clarification as under:- F.No.437/17/2011-Cus-IV Government of India Ministry of Finance Department of Revenue (Central Board of Indirect Taxes and Customs) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notices. Our conclusion is supported by the decision rendered by the High Court of Gujarat in the case of Swati Menthol and Allied Chemical Ltd. Vs. Joint Director, Directorate of Revenue Intelligence, reported in 2014 (304) ELT 21 (Gujarat) . 34. The relief nos. a and b, as claimed by the petitioner, cannot be granted and the same are declined. So far as the alternative relief claimed by the petitioner for issuance of mandamus directing the Respondent No.4 to proceed with the adjudication of the show cause notice only after making available the documents/evidence etc. and also affording an opportunity to cross examine the witnesses whose testimony is stated to have been relied upon during the investigation by the Directorate of Revenue Intelligence is concerned, similar relief was considered and repealed by this Court in the case of Commissioner of Central Excise, Meerut-I and another Vs. M/s Parmarth Iron Pvt. Ltd., Bijnor (Special Appeal No.741 (D) of 2010 decided on 29.11.2010, reported in 2011(2) ADJ 83 (DB) . The conclusion of the learned Division Bench in paragraph 16 and 17 is quoted below:- 16. We, therefore, have no hesitation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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