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TMI Blog2022 (6) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... 189 VII Note on the Cadre in the Customs Department. 190 - 201 VIII Changes to Section 17 w.e.f. 11.04.2011- The Assessment of Bill(s) of Entry and Shipping Bill(s). 202 - 235 IX Officers of Directorate of Revenue Intelligence (DRI) are already officers of Customs. 236 - 289 X Conclusion. 290 - 313 PART I - INTRODUCTION 2. Part I - Introduction is divided into two parts namely, Part - A and Part - B. There are 5 Writ Petitions in Part - A. In these 5 Writ Petitions, the respective petitioners have challenged the impugned Order in Original and impugned Recovery Notice as detailed below:- Table I - (Part - A) Sl. No. W.P.Nos Name Date Order in Original No. 1 33099/ 2015 M/s.N.C.Alexander 29.06.2015 39839 of 2015 2 27344/ 2017 M/s.E.Duraisamy & Bros., 18.07.2017 58133 of 2017 3 18918/ 2016 Mr.Chirag U Jain 05.02.2016 44560 of 2016 4 12929/2021 Shri.Farooq Ubaithulla 30.12.2015 44421 of 2016 5 12933/ 2021 Shri.Farooq Ubaithulla 06.05.2019 impugned Recovery Notice No.F.No.RRU 18/2019-RRU II (Gr-6) 3. There are 12 Writ Petitions in Part - B. In these 12 Writ Petitions, the respective writ petitioners have challenged the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emanate from a person who is not a "proper officer" within the meaning of Section 2(34) of the Customs Act, 1962. 6. In all these writ petitions, the challenge to the impugned Show Cause Notices and the impugned Order-in-Originals are inspired from the decision of the Hon'ble Supreme Court in Commissioner v. Sayed Ali 2011 (265) E.L.T. 17 (S.C.) and the decision of the Hon'ble Supreme Court in Canon India Private Limited Vs. Commissioner of Customs 2021(376) E.L.T. 3(S.C.). The said decision is now the subject matter of a review before the Hon'ble Supreme Court. 7. The Hon'ble Supreme Court in Canon India Private Limited Vs. Commissioner of Customs 2021(376) E.L.T. 3(S.C.) the above case has held that the officer from the Directorate of Revenue Intelligence (DRI), are not the "Proper Officer" within the meaning of Section 2(34) of the Customs Act, 1962 for issuing Show Cause Notice under Section 28 of the Customs Act, 1962. The Hon'ble Supreme Court held that "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 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f their appointment and assigning of functions by the Central Government or the Board under the Customs Act, 1962. 11. The explanation to Section 97 of the Finance Act, 2022 further makes it clear that any proceeding arising out of any action taken under this Section and pending on the date of commencement of this Act shall be disposed of in accordance with the provisions of the Customs Act,1962 as amended by the Finance Act 1962. Section 97 of the Finance Act, 2022 reads as under:- Validation of certain actions taken under Customs Act. 97. Notwithstanding anything contained in any judgment, decree or order of any court, tribunal, or other authority, or in the provisions of the Customs Act, 1962 (hereinafter referred to as the Customs Act),-- (i) anything done or any duty performed or any action taken or purported to have been taken or done under Chapters V, VAA, VI, IX, X, XI, XII, XIIA, XIII, XIV, XVI and XVII of the Customs Act, as it stood prior to its amendment by this Act, shall be deemed to have been validly done or performed or taken; Validation of certain actions taken under Customs Act. (ii) any notification issued under the Customs Act for appointing or assignin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29.06.2015 passed by the respondent, Commissioner of Customs. The prayer in this writ petition reads as follows: " Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus calling for the records of the Respondent pertaining to the Order in Original No.39839/2015 dated 29.06.2015 and quash the same and forbear the Respondent from proceeding with any recovery of the Adjudicated dues pursuant to the said Order In Original, as it is partisan, one sided and issued with a closed mind besides being passed in clear violation of the Principles of Natural Justice and in passed in gross judicial indiscipline, as the petitioner had relied upon Judgements of this Hon'ble Court in W.P.No.1641 of 2008 dated 10.01.2011 and W.P.No.3720/2009 dated 01.12.2014; besides the orders of Commissioner of Customs (Appeals), pertaining to the Valuation of Import of Apples in the preceding years; and also for the reason that the Imports in question, impugned in the Order under Challenge in the present writ petition were on the basis of an "Apostilled Contract", issued in terms of "the Hague Convention, 1961", to which India as a Sovereign Country is a signator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the imports were made on the basis of an "Apostilled Contract" issued in terms of Hague convention, 1961 and that such contract is not only binding on the signatories but also the authorities functioning under the aegis of the Indian Constitution. 24. The facts of the case indicate that the petitioner had earlier filed W.P.No.3720 of 2009, for a Writ of Mandamus, to direct the respondents to assess the Bills of Entry filed by the petitioner during April 2003 to January 2009. 25. During the pendency of the above writ petition, the petitioner was issued with the above mentioned Show Cause Notice dated 26.03.2010 bearing Reference F.No.VIII/371/2009-DRI-CZU by the Additional Director General of Directorate of Revenue Intelligence. 26. In the light of the submissions of the petitioner, the said writ petition in W.P.No.3720 of 2009 was disposed by this Court by its order dated 01.12.2014. 27. The petitioner also appears to have also filed another writ petition in W.P.No.1641 of 2008, wherein the petitioner had challenged an earlier impugned Order-in Original and that the writ petition came to be allowed on 10.01.2011 and therefore, a direction was issued to the officers to ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal No.58133/2017 dated 18.07.2017 and quash the same as the same is contrary to the judgments of the Hon'ble Apex Court and the circulars issued by the Central Board of Excise and Customs (CBEC)." 31. By the impugned Order-in-Original, the respondent Commissioner of Customs has confirmed the demand under Section 28 of the Act and has also imposed penalty and ordered confiscation of the imported goods under Section 124 of the Act as proposed in the Show Cause Notice dated 10.02.2012 bearing reference No.VIII 26/363/07 issued by the Directorate of Revenue Intelligence(DRI). 32. The dispute in this case also pertains to alleged wrongful availing of the benefit of Customs Notification No.41/2005-Cus dated 09.05.2005 read with Appendix of 37-B of Hand Book Procedure, Foreign Trade Policy. 33. The Show Cause Notice seems to indicate that the statements were recorded from the partner of the petitioner namely, the second petitioner herein on 10.10.2007 and that the said petitioner also under took to pay the difference customs duty. 34. However, thereafter, filed W.P.No.33715 of 2007 before this Court for a mandamus to restrain the Officers of the Directorate of Revenue Intelligence f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Customs. The prayer in this writ petition reads as follows: "Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus calling for the records of the respondent pertaining to the Order in Original No.44560/2016 dated 05.02.2016 and quash the same and forbear the Respondent from proceeding with any recovery of the Adjudicated dues pursuant to the said Order In Original, as it is partisan, one sided and issued with a closed mind besides being passed in clear violation of the Principles of Natural Justice." 41. By the impugned Order-in-Original, the first respondent Commissioner of Customs has confirmed the demand proposed in the Show Cause Notice dated 25.04.2013 bearing reference No.VIII 48/41/2012-DRI issued by the Additional Director General, Directorate of Revenue Intelligence(DRI). 42. It was alleged that the petitioner had imported fire crackers in the name of M/s.Malar Agencies which were restricted items of import and disguised the import with birthday party poppers to conceal the imported fire crackers. 43. It is submitted that the impugned Order-in-Original dated 05.02.2016 was without jurisdiction. It was f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06.05.2019 issued in F.No.RRU 18/2019-RRU II (Gr-6) issued by the second respondent and quash the same." 48. It is the case of the petitioner that the petitioner was no way connected with import of goods and therefore the impugned order passed pursuant to show cause notice dated 30.06.2015 issued by the third respondent/Additional Director General, Directorate of Revenue Intelligence was without jurisdiction. 49. The Show Cause Notice dated 30.06.2015 bearing reference F.NO.DRI/CZU/VIII/48/ENQ-01/INT-25/2014 was issued by the third respondent/Additional Director General, Directorate of Revenue Intelligence to the petitioner Shri.Farooq Ubaithulla as a co-noticee. 50. The petitioner was called upon to show cause as to why, the penalty should not be imposed on him under Section 112 and Section 114 AA of the Customs Act, 1962 along with the co-noticee named in the paragraph 117 of the Show Cause Notice. 51. It was alleged that the petitioner had destroyed evidence to facilitate evasion of Customs Duty by the main Noticee in the Show Cause Notice, bearing reference F.NO.DRI/CZU/VIII/48/ENQ-01/INT25/2014 issued by the Additional Director General, Directorate of Revenue Intelligence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances under which he was being summoned had been detailed. A summons dated 17.02.2015 for his appearance on 20.02.2015 was also enclosed along with the said letter. The said summons was also not honoured by him. The purpose of dodgining the summons and entering into unwanted and undesired correspondence seemed to drag the proceedings and to brow-beat the officers investigating the case. 109.3. In the above said circumstances, DRI filed a petition under Section 174 IPC with the Hon'ble Additional Chief Metropolitan Magistrate, E.O.I, Egmore and its proceedings are pending before the Hon'ble Court at the time of issue of this Notice. 109.4. Shri Farook Ubaidullah is an ex-cofeposa detenue. He was detained on two occasions by the State Government of Tamil Nadu vide Detention Order in S.R.1/280-5/94 datd 04/04/1994 for the offence in O.S.No.46/1994 (Air) concerned with seizure of foreign currency valued at Rs/36,74,984/- and in S.R.I/844-8/99 dated 26.10.1999 for the offence in O.S.No.44/1999 (Air) concerned with seizure of electronic goods valued at Rs.9.03 lakhs". 52. The petitioner was called upon to show cause notice as to why penalty under Sections 112 and 114A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 which has culminated in impugned Order-in-Original No.4442 of 2016 dated 30.12.2015 is liable to be quashed in the light of the decision of the Hon'ble Supreme Court in Canon India Private Limited Vs. Commissioner of Customs 2021 (376) E.L.T. 3(S.C.). 59. The learned ASG assisted by Mr.V.Sundareswaran, learned Senior Panel Counsel submitted that the Show Cause Notice was issued on 30.06.2015 and the case was adjudicated on 30.12.2015 five years before the aforesaid decision of the Hon'ble Supreme Court in Canon India Private Limited Vs. Commissioner of Customs 2021 (376) E.L.T. 3(S.C.). 60. It is submitted that the petitioner was silent after the Show Cause Notice was issued and failed to reply to the Show Cause Notice was issued. Further, long after the adjudication of the said Show Cause Notice vide Order-in-Original No.44421/2016 dated 30.12.2015 by the first respondent, Commissioner of Customs, the petitioner has filed this writ petition. The petitioner as per his own admission admitted to have came to knowledge about the case against him in the subject case through a detention notice dated 26.04.2019 served on him by the second respondent for payment of penalty of Rs.55,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore submitted that in the light of the development since the proceedings against the main noticee has been dropped, the proceedings against the petitioner cannot be sustained. PART- B (TABLE II CASES) CHALLENGE TO IMPUGNED SHOW CAUSE NOTICES: W.P.No.9484 of 202 & W.P.No.9434 of 2021 1- [ M/S.Sneha Glasses Private Ltd. And M/S.Bagrecha Enterprises Ltd.,- Sl.Nos.6 and 7 in Table-II] 66. The petitioners have challenged the impugned Show Cause Notices issued by the Additional Director of Directorate of Revenue Intelligence. The prayer in these Writ Petitions read as under:- W.P.No.9484 of 2021 W.P.No.9434 of 2021 "Writ Petition filed under Article 226 of the Constitution of India to issue a Writ of certiorari calling for the entire records connected with the Show Cause Notice F.No.VIII/48/28/2008-DRI, dated 26.10.2009, passed by the third respondent herein and quash the same". "Writ Petition filed under Article 226 of the Constitution of India to issue a Writ of certiorari calling for the entire records connected with the Show Cause Notice F.No.VIII/48/33/2008-DRI, dated 26.10.2009, passed by the third respondent herein and quash the same". 67. The challenge to the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , ii. Mentha & Allied Products Ltd Vs. Commr. Of CGST, Chandigarh 2021 (376) E.L.T. 41 (P&H), iii. Mahalakshmi Traders Vs. Assistant Commissioner of Customs (GR.7B-DEPB), Chennai 2021 (378) E.L.T. 51 (Mad), iv. Swathi Menthol & Allied Chemicals Limited Vs. Commr., GST & C.Ex. Commissionerate, Chandigarh 2021 (378) E.L.T. 110 (P&H) and v. Sushitex Exports (India) Ltd, & Ors Vs. Union of India & Anr, W.P.(L).No.9641 of 2020; vi. Babu Verghese and others Vs. Bar Council of Kerala and Ors, AIR 1999 SC 1281; vii. Commissioner of Customs Vs. Sayed Ali, 2011(265) E.L.T.17(S.C.); viii. Mangali Impex Ltd., Vs. Union of India, 2016 (335) E.L.T.605(Del.)". 73. The learned counsel for the petitioners further submits that the Hon'ble Division Bench of the Bombay High Court in Commissioner of Customs Vs. Reliance Industries Limited, 2021 SCC Online 5914 has discussed at length. 74. Opposing the prayer in this writ petition, the learned ASG duly assisted by the learned Senior Panel Counsel for the third respondent submits that the petitioner had attempted to take a adjournment in the show cause notice stating that the petitioner was settling the dispute with the Settlement Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore that the submissions that case was settled before the Settlement Commission cannot be countenanced. W.P.No.9306 of 2021: [ M/s.SUN NETWORK LIMITED-Sl.No.8 of Table-II] 81. The petitioner has challenged the impugned Show Cause notice dated 19.07.2013 issued by the second respondent Additional Director of DRI, Mumbai seeking to demand customs duty and to appropriate an amount of Rs.60,17,61,981/- paid by the petitioner. Thereafter, no summons were issued by the Office of the second respondent on 05.03.2013. The prayer in the said writ petition reads as under:- "Writ Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus to quash the show cause notice dated 19.07.2013 in File No:DRI/MZU/E/13/2012/5518 issued by the second respondent now pending adjudicating before the first respondent and consequently direct the second respondent to refund the said sum of Rs.60,17,62,000/- (Rupees Sixty Crores Seventeen Lakhs Sixty Two Thousand Only) paid by the petitioner by way of demand draft dated 05.03.2013 bearing No: 544861 drawn at City Union Bank Ltd., Mandaveli Branch, Chennai with applicable interest." 82. The challenge to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the petitioner has also relied on the decision of the Hon'ble Supreme Court in Raza Textiles Limited Vs Income Tax Officer, (1973) 1 SCC 633. A specific reference was made to Paragraph 3 from the said decision to support the case of the petitioner to state that the second respondent cannot assume jurisdiction and deny refund of the amount under protest and without prejudice. 88. It is submitted that the entire proceedings are vitiated and are therefore liable to be interfered notwithstanding that the petitioner has replied to the Show Cause Notice in the light of the decision of the Hon'ble Supreme Court in Canon India Private Limited case (referred to supra). 89. The learned Senior Counsel for the petitioner has also placed reliance on the decision of the learned Single Judge of this Court in Alston Transport India Limited Vs The Additional Director General, Directorate of Revenue Intelligence, Zonal Unit, G.N.Chetty Road, T.Nagar, Chennai and 16 others, passed in W.P.No.19919 of 2021 dated 25.10.2021 and the Madurai Bench of this Court in Quantum Coal Company Private Limited, Represented by its Managing Director Vs The Commissioner, Office of the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th M/s Johnrose. It further appears M/s Johnrose also earlier had filed Writ Petition and secured an order for provisional release of the goods. 94. It appears that the proprietor of M/s.Johnrose had also retracted his earlier statements given before the DRI by contending that the statement given by him was not voluntary, and that the statement was recorded under duress, coercion and force. 95. The learned counsel for the petitioner submitted that with regard regards to the adjudication of Show Cause Notice, they had vide by their various representations, had sought for to provide with the relied upon documents to the impugned Show Cause Notice, while also had sought for cross-examination of certain persons as referred to in the said letter/representation addressed by the petitioner to the respondents herein. 96. The counsel for the petitioner submitted that in the impugned Show Cause Notice issued by the 1st respondent Additional Director Directorate of Revenue Intelligence is yet to be adjudicated by the 2nd respondent herein, the proceedings initiated is contrary to demur of the Hon'ble Supreme Court in Canon India Private Limited Vs. Commissioner of Customs 2021(376) E.L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, as applicable: ii. The imported Glass Chatons, Cup Chain and Glue Sheets, as detailed in Annexure-A to this Notice, valued at Rs.1,22,03,964/-(Rupees One Crore Twenty Two Lakhs Three Thousand Nine Hundred and Sixty Four Only) (re-determined value), should not be held liable for confiscated under the provisions of Section 111(d) and 111(m) of the Customs Act,1962; iii. Customs Duty amounting to Rs.19,12,746/(Rupees Nineteen Lakhs Twelve Thousand Seven Hundred and Fourty Six Only) leviable on various imported goods of Chinese origin totally valued at Rs.1,22,03,964/-(Rupees One Crore Twenty Two Lakhs Three Thousand Nine Hundred and Sixty Four Only) (re-determined value) as detailed in Annexure-A to this Show Cause Notice, should not be demanded and recovered from them under Section 28(4) of the Customs Act, 1962; iv. Interest should not be recovered from them on the leviable Customs Duty mentioned at (iii) above under Section 28AA of the Customs Act,1962; v. Penalty should not be imposed on them under Section 112(a)/114A of the Customs Act, 1962. 101. The impugned Show Cause Notice has been i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court in Harkaran Dass Vedpal Vs Union of India, 2019 (368) E.L.T. 546 (P & H) and in Super Oil Company Vs Union of India, 2020 (372) E.L.T. 536 (P & H). 108. The learned counsel for the petitioner submits that after the writ petition was listed for admission on 12.05.2021 and notice was ordered, the second respondent has passed Order-in-Original dated 31.12.2021 and thereby attempted to make these writ petitions infructuous. 109. On a query as to whether the petitioners have filed any appeal or challenged the aforesaid order of the second respondent, it is submitted that the petitioners have not initiated any proceedings against the order dated 31.12.2021. 110. It is the further case of the petitioner that the impugned Show Cause Notice issue is contrary to the decision of the Hon'ble Supreme Court in Canon India Private Limited Vs. Commissioner of Customs 2021(376) E.L.T. 3(S.C.) and therefore the show cause notice was without jurisdiction. 111. On merits, a reference was made to the Bombay High Court dealing with the circular issues . A specific reference was made to the Bombay High Court in Commissioner of Customs Vs. Reliance Industries Limited, 2021 SCC Online 5914 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent submits that under Section 124 of the Customs Act, 1962, a notice can be issued with an approval from the officers of the Assistant Commissioner of Customs. 118. It is submitted that the expression "Proper Officer" has not been used in Section 124 and in Section 111 of the Customs Act and therefore the decision of the Hon'ble Supreme Court in Canon India Private India Ltd. cannot be applied to the facts of the case. He further submits that in any event Order-in-Original has been passed. In view of the same, the writ petition is liable to be dismissed as infructuous. 119. By way of rejoinder, the learned counsel for the petitioner made a specific reference to the decision of the Principal Bench of the Customs, Excise & Service Tax Appellate Tribunal in Customs Appeal No.51570 of 2019 in M/s.Schweitzer Engineering Laboratories Pvt Ltd Vs. Commissioner of Customs (Import). 120. It is submitted that the pursuant of the Tribunal considered the decision of the Hon'ble Supreme Court in Canon judgement in the context of Section 124 had dropped the 121. Opposing the prayer, the learned senior standing counsel for the respondents submits that the decision of the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.9405 and 9407 of 2021, reads as follows:- W.P.No.9405 of 2021 W.P.No.9407 of 2021 "Writ Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorari to quash the show cause notice dated 23.06.2020 in File No: DRI/BZU/S-IV/ENQ-17(INT-NIL) 2019/318 issued by the second respondent now pending adjudicating before the first respondent". Writ Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorari to quash the show cause notice dated 23.06.2020 in File No: DRI/BZU/SIV/ENQ-17(INT-NIL) 2019/317 issued by the second respondent now pending adjudicating before the first respondent". 127. W.P.No.9405 of 2021 has been filed by the Managing Director Sun Direct TV Pvt.Ltd. Dispute pertains to import of viewing cards and set Top Box by allegedly mis-declaring the correct classification by wrongly classifying the viewing card as smart card under CTH 85235290 instead of CTH 85299090 and by making a wrong claim of country of origin on set Top Box by pre-loading the software from supplier located in Non Asean Country and thereby wrongly availed the benefit of Notification No.46/2011 dated 01.06.2011, Notification No.189/2009 Cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation (as the goods are not physically available for confiscation) under Sections 111(d), 111(m) and 111(o) of the Customs Act, 1962: (iv) Differential duty amount of Rs. 18,12,85,676/- (Rupees Eighteen Crore Twelve Lakh Eighty-Five Thousand Six Hundred Seventy-Six Only), arising due to wrong classification of the imported viewing cards resulting in non-payment of applicable Basic Customs Duty thereon, as detailed in Annexure A2.1 to this notice, should not be recovered from them, in terms of Section 28(4) of the Customs Act, 1962, for the period upto 30.06.2017 and in terms Of Section 28(4) of the Customs Act, 1962 read with Section 5(1) of IGST Act, 2017 from 01.07.2017, read with Section 6 of Chapter V of the Taxation and other laws (relaxation of certain provisions) Ordinance, 2020 (2 of 2020) dated 31-3-2020; (v) it should not be held that the imported Set Top Boxes with Cardless Client embedded inside these Set Top Boxes imported through Chennai Air Cargo, as detailed in Annexure B3, is a single product and with consolidated value; and hence, as to why their declaration in the Bills of Entry, as two items under two different CTHS i.e. 85287100 for Set Top Boxes and 852380 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Act, 1962, for the period upto 30.06.2017 and in terms of Section 28(4) of the Customs Act, 1962 read with Section 5(1) of IGST Act, 2017 from 01.07.2017, read with Section 6 of Chapter V of the Taxation and other laws (relaxation of certain provisions) Ordinance, 2020 (2 of 2020) dated 31-3-2020; (xi) interest at the appropriate rate, on the duty recoverable from them as at (iv), (vii) and (x) above, should not be demanded and recovered from them under Section 28 AA of the said Act. (xii) Penalty should not be imposed on them, under Sections 112 and/or 114A of the Customs, Act, 1962, for the offences committed by them as detailed supra; and (xiii) Penalty should not be imposed on them underSection 114AA of the Customs Act, 1962,for the offences committed by them as detailed in the above paras. 11.2.2 Now therefore, Shri L.Subramanian, General Manager-Logistics of M/s. SDTVPL and Shri Swaminathan, Managing Director of M/s. SDTVPL, are called upon to show cause individually, independently and separately, to the Principal Commissioner/Commissioner of Customs, GST Road, New Customs House, Chennai-VII, Meenambakkam, Chennai 600027, within 30 days of receipt of this noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se Notice in F.No.DRI/CZU/VII/48/Enq - 01/INT-03/2021 dated 30.11.2021 issued by the respondent herein and to quash the same in view of the judgement rendered by the Hon'ble Supreme Court in the case of Canon India Private Limited Vs. The Commissioner of Customs in Civil Appeal No.1827 of 2018 dated 09.03.2021." 131. It is the case of the petitioner that the petitioner is merely a Customs House Agent (CHA) who has proceeded for having filed the Shipping Bills under Section 50 of the Customs Act, 1962 for the export of goods for the exporter. It is submitted that based on the information provided by the exporter, the petitioner had filed seven shipping bills by declaring the export goods as garments. 132. It is submitted that after the shipping bills were assessed, the Let Export Orders (LED) were issued and the goods were moved from Bangalore to Chennai. It is further submitted that during transit, the exporter in collusion with others has substituted the garments which were declared with red sanders which is the prohibited item and which the petitioner had no role to play in the alleged attempt to export. 133. The learned counsel for the petitioner submits that the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1962 (52 of 1962) and in super session of notification of the Government of India in the Ministry of Finance (Department of Revenue) No.19/90-Customs (N.T.), dated the 26th April, 1990, the Central Government appoints the officers ADG, DRI to be Commissioner of Customs, Additional Director/Joint Director to be Additional Commissioner/Joint Commissioner of Customs and Deputy Director/Assistant Director to be Deputy Commissioner/Assistant Commissioner of Customs for the whole of India (area of jurisdiction). 139. The learned Additional Government Pleader for the respondent submits that the officers of the Directorate of Revenue Intelligence are the officers of customs and therefore they are competent to issue the impugned notice and therefore the petitioner should submit to the jurisdiction of the respondent by filing a reply and participate in the adjudication mechanism prescribed under Section 124 of the Customs Act, 1962 in the impugned Show Cause Notice. 140. That apart, it is submitted that the role of the petitioner as to whether the petitioner though indeed indulged in facilitating the smuggling of red sanders in the guise of export garments. As a matter of fact which ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RU/VIII/26/ENQ1/INT-6/2019 dated 19.01.2021, issued by the first respondent and quash the same." 143. The Challenge to the impugned show cause notice is primarily on the strength of the decision of the Hon'ble Supreme Court in Canon India Private Limited Vs. Commissioner of Customs 2021 (376) ELT 3 (SC). It is submitted that though in Canon judgment, the Hon'ble Supreme Court has dealt with a definition of proper officer in Section 2(34) of the Customs Act, 1962 and Notification issued therein vide Notification No.40/2012-Customs (N.T.) dated 02.05.2012 the impugned Show Cause Notice has been issued on the strength of Notification No.44/2011-Customs (N.T) dated 06.07.2011. 144. It is submitted that the decision of the Hon'ble Supreme Court in Canon India Private Limited Vs. Commissioner of Customs 2021 (376) E.L.T. 3(S.C.). rendered in the context of Notification No.40/2012Customs (N.T) dated 02.05.2012 will apply for interpretation to be placed for notification issued under the same provisions vide the Notification No.44/11-Customs (N.T) dated 06.07.2011. 145. It is submitted that under Section 2(34), the "Proper Officer" in relation to any functions to be performed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate authority and finally by the Hon'ble Supreme Court in the hierarchy of the appellate authorities under the Customs Act, 1962. 151. Therefore, I will confine in this order only on the broad issue of jurisdiction of the officers of Directorate of Revenue Intelligence who have issued the Show cause notices to the petitioners. 152. In the case, if it is held that the initiation of proceedings by Directorate of Revenue Intelligence (DRI) was bad in law in the light of the decision of the Hon'ble Supreme Court in Canon India Private Limited Vs. Commissioner of Customs 2021(376) E.L.T. 3 (S.C.) and decision of the Hon'ble Supreme Court in The Commissioner of Customs Vs. Sayed Ali, 2011 (265) ELT 17 (SC) cited supra, and these writ petitions will have to be allowed. 153. On the other hand, if it is held, that the initiation of proceedings by the officers of the Directorate of Revenue Intelligence (DRI) were valid, only option is to give liberty to the respective petitioner(s) to work out their remedy before the adjudicating authority or the Appellate Authority under the Customs Act, 1962. 154. Therefore, I shall confine only to examination of the jurisdictional issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rochemicals Ltd., 2019(367)E.L.T.530 (Mad.) xvi. Masterstroke Freight Forwarders P.Ltd. vs. C.C.(1) Chennai-1, 2016(332) E.L.T.300 (Mad.); xvii. Vendhar Movies vs. Jt.Dir.,D.G.Of GST Intelligence, Chennai, 2019(28) G.S.T.L.545(Mad.); xviii. Simplex Infrastructures Ltd., vs. Union of India, 2020(374) E.L.T.574(Mad.) xix. Siements Ltd. vs. State of Maharashtra, 2006(12)TMI 203; xx. SBQ Steels Ltd., vs. Commissioner of Customs, Central Excise and Service Tax, Gundur, 2013(1)TMI 359; xxi. Oryx Fisheries Private Ltd. vs. Union of India, 2010(10) TMI 660; xxii. xxiii) Westinghouse Saxby Farmer Ltd. vs. Commr.of Central Excise Calcutta, 2021(3)TMI 291; 156. The decision of the Hon'ble Supreme Court in Canon India Private Limited Vs. Commissioner of Customs, 2021(376) E.L.T. 3 (S.C.) which was followed by the Hon'ble Supreme Court in M/s.Agarwal Metals and Alloys Vs. Commissioner of Customs, Kandla reported in Civil Appeal No.3411 of 2020, was also followed by a Single Judge of this Court vide order dated 25.10.2021 in W.P.No.19919 of 2021. 157. Before proceeding further, it will be useful to refer to the decision of the Hon'ble Supreme Court in the case of Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 2(34) and Section 28 of the Customs Act, 1962, it is manifest that only such a customs officer who has been assigned the specific functions of assessment and reassessment of duty in the jurisdictional area where the import concerned has been affected, either by the Board or the Commissioner of Customs, in terms of Section 2(34) of the Customs Act, 1962 was competent to issue notice under Section 28 of the Customs Act, 1962. 162. The Hon'ble Supreme Court further held that "The Any other reading of Section 28 would render the provisions of Section 2(34) of the Act otiose in as much as the test contemplated under Section 2(34) of the Act of the Act is that of specific conferment of such functions". It further held that "Moreover, if the Revenue's contention that once territorial jurisdiction is conferred, the Collector of Customs (Preventive) becomes a "proper officer" in terms of Section 28 of the Act is accepted, it would lead to a situation of utter chaos and confusion, in as much as all officers of customs, in a particular area be it under the Collectorate of Customs (Imports) or the Preventive Collectorate, would be "proper officers" ". 163. The Hon'ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agarwal Metals and Alloys, was issued with show cause notice. It appears that statements were recorded before the Directorate of Revenue Intelligence ( DRI) as is evident from a reading of para No.11.5 of the order of the Hon'ble Supreme Court in the said decision, which reads as under:- "11.5 The Adjudicating Authority in order to justify the LME based valuation has relied upon the statements iof Shri Vipul Agarwal and Samir Agarwal. The appellant has objected to such reliance, as the statements were retracted immediately and the same are contradictory to documentary evidence i.e. Contemporaneous import price. The appellant has pleaded that retracted statements cannot be accepted as evidence for confirmation iof demand and the said retraction was immediately sent by RPAD to the office of DRI. The adjudicating authority in the impugned order has chosen to not consider the retraction letter on the ground that looking at the same it cannot be inferred that the same were received by the DRI. We are of the view that the said approach of the adjudicating authority is incorrect as the reason for not considering the retracting appears to be presumptive in nature as no evidence has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th Notification issued thereunder. It will be therefore useful to refer to the history of the Directorate of Revenue Intelligence (DRI). 173. The Directorate of Revenue Intelligence (DRI) was constituted on the 4th of December, 1957 when Sea Custom Act, 1876 was in force. It was intended for dealing exclusively with the work relating to the collection and study of information on smuggling activities and the deployment of all anti-smuggling resources at the All India level, besides arrangement of training for the Intelligence and Investigation Officers of the Custom Houses and Central Excise Collectorates deployed on similar work. They have been now recognised as Officers of Customs. The Directorate predates the enactment of Customs Act, 1962, when Sea Customs Act, 1876 was in force. 174. The pre-dominant functions of the Directorate of Revenue Intelligence (DRI) at the time of its conception were as follows:- (a) To study and disseminate intelligence about smuggling; (b) To identify the organised gangs of smugglers and areas vulnerable to smuggling, targeting of intelligence against them and their immobilization; (c) To maintain liaison with the intelligence and enforcement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ligence Bureau), charged with the responsibility of dealing with all matters connected with anti-smuggling and anti-corruption in the Customs and Central Excise organizations all over India was constituted. It was a small unit consisting of an Assistant Collector and two Superintendents within the Directorate of Inspection (Customs and Central Excise), New Delhi but working directly under the Central Board of Revenue. By its very composition, a cell like C.R.I.B., could have a very limited scope for wider activities. But various studies undertaken in this small Cell itself revealed that the menace of smuggling had established deep roots in India, which, in turn, spelt out the dire need for establishing a well-organized Central anti-smuggling Organization for planning and directing the anti- smuggling efforts of the various Custom Houses and Central Excise Collectorates throughout India in a scientific manner for successfully meeting the menace of organized smuggling. Various studies were undertaken by C.R.I.B. and suggestions were submitted to the Government of India in the Ministry of Finance (Revenue Division) The proposals made by Chairman, Central Board of Revenue and Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich it has necessarily to deal in order to become effective; iv. It will consist of selected officers, that is, those who by temperament and experience, are equipped to do this specialized kind of work; v. It will have no routine job of its own in the sense that it is required to collect a certain amount of revenue. It will have complete liberty to act on 'hunches' and only the ends will justify the means it adopts." 176. However, with the increase in import and exports, the Role of the officers of Directorate of Revenue Intelligence (DRI) was expanded. From merel collection of information and investigation of tax evasion and dissemination of informations and tipping the field formations about possible smuggling and evasion of customs duty, they have been recognized as "Officers of Customs" by notification issued under Section 4 of the Customs Act, 1962. Thus, there is no difficulty in their being appointed as "Proper Officers". Currently, the senior officers in the Directorate of Revenue Intelligence (DRI) consist of Officers of the Customs who are on deputation to the Board. The Officers of the Directorate of Revenue Intelligence (DRI) like their counterparts in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as may be appointed for the purpose of this Act. There shall be the following classes of officers of customs, namely:-- a) Principal Chief Commissioner of Customs or Principal Chief Commissioner of Customs (Preventive) or Principal Director General of Revenue Intelligence; b) Chief Commissioner of Customs or Chief Commissioner of Customs (Preventive) or Director General of Revenue Intelligence; c) Principal Commissioner of Customs or Principal Commissioner of Customs (Preventive) or Principal Additional Director General of Revenue Intelligence or Principal Commissioner of Customs (Audit); d) Commissioner of Customs or Commissioner of Customs (Preventive) or Additional Director General of Revenue Intelligence or Commissioner of Customs (Audit); e) Principal Commissioner of Customs (Appeals); f) Commissioner of Customs (Appeals); g) Additional Commissioner of Customs or Additional Commissioner of Customs (Preventive) or Additional Director of Revenue Intelligence or Additional Commissioner of Customs (Audit); h) Joint Commissioner of Customs or Joint Commissioner of Customs (Preventive) or Joint Director of Revenue Intelligence or Joint Commissioner of Customs (Audi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issued under section 28 of the Customs Act, 1962. All along the, the adjudication of the SCN was with a different officer from the officer who may have made assessment at the time of import or export. 186. In the context of assessment under under un-amended Section 17 of the Customs Act, 1962 prior to 8.4.2011, in Escorts Ltd Vs. Union of India, 1998 (97) ELT 211(SC), it was held that in the very nature of opinion, no formal orders of assessment can be expected in such a case. It is more like 'across-the-counter' affair. The Court further held that where a Bill of Entry presented was signed, signifying approval by the assessing officer, that itself was an order of assessment in such a situation. No separate order of assessment was required. This was the position of law before 2011 amendment to Section 17 of the Custom Act, 1962. 187. In fact, the above position was reiterated in Priya Blue Industries Limited Vs. Commissioner of Customs Preventive, 2004 (172) E.L.T. 145 (SC) in the context of refund also. The Court there followed its earlier decision in Collector of Central Excise, Kanpur Vs. Flock India Private Limited, 2000 (120) E.L.T. (285), by holding that unless as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Customs Act, 1962. 193. The Group-B Cadre Officers in the Customs and Central Excise (Now Central Tax Officers) consist of:- i. Group 'B' Executive Cadre; and ii. Group 'B' Ministerial Cadre. 194. For the purpose of the present writ petition a reference to Group 'B' Executive Cadre is sufficient. It is further divided into two groups:- i. Group 'B' Executive - Gazetted Officers; and ii. Group 'B' Executive - Non-Gazetted Officers. 195. Group 'B' Executive - Gazetted Officers and Group 'B' Executive-Non-Gazetted Officers consist of three Grades as detailed below:- Sl. No. Group 'B' Executive - Gazetted Officers Group 'B' Executive - Non Gazetted Officers 1 Superintendent of Central Excise Inspector (Central Excise) 2 Superintendent of Customs (Preventive) Inspector (Preventive Officer) 3 Appraiser of Customs Inspector (Examiner) 196. The Board or the Principal Commissioner of Customs or Commissioner of Customs may also appoint any person as it thinks fit to be the "Officer of Customs" under Section 2(34) and under Section 4(1) of the Act. It is the officers at the Sl.No.2 and 3 who are the first interface with an exporter or importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (s). This appears to have not been brought to the knowledge of the Hon'ble Supreme Court. 203. With effect from 08.04.2011, assessment of Bill(s) of Entry and Shipping Bill(s) was no longer left with the "proper officer" appointed for the purpose under Section 17 of the Customs Act, 1962. 204. With effect from 08.04.2011 there is only self-assessment of Bill(s) of Entry and/or Shipping Bill(s). Self assessment in the Bill(s) of Entry and Shipping Bill(s) were to be either accepted or rejected by the proper officer. 205. The "Proper Officer" appointed for the purpose of Section 17 of the Customs Act, 1962 under a Notification issued under Section 2(34) of the Act, could only make a re-assessment of the Bill(s) of Entry and Shipping Bill(s) in case they did not agree with the self assessment of the importer or the exporter as the case may be. 206. In case of re-assessment, such a "proper officer" is bound to pass a "Speaking Order" to enable the aggrieved party to file an appeal. This aspect appears to have not brought to the knowledge of the Hon'ble Supreme Court in Canon India Private Limited Vs. Commissioner of Customs, 2021 (376) E.L.T.3(S.C). Section 17 as it read be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts made in the entry relating thereto and the documents produced and the information furnished under sub-section (3); but if it is found subsequently on examination or testing of the goods or otherwise that any statement in such entry or document or any information so furnished is not true in respect of any matter relevant to the assessment, the goods may, without prejudice to any other action which may be taken under this Act, be re-assessed to duty. (4) Where it is found on verification, examination or testing of the goods or otherwise that the self-assessment is not done correctly, the proper officer may, without prejudice to any other action which may be taken under this Act, re-assess the duty leviable on such goods. Amendment of section 18. (5) Where any assessment done under sub-section (2) is contrary to the claim of the importer or exporter regarding valuation of goods, classification, exemption or concessions of duty availed consequent to any notification therefor under this Act, and in cases other than those where the importer or the exporter, as the case may be, confirms his acceptance of the said assessment writing, the proper officer shall pass a speaking orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es made in the Bill(s) of Entry under Section 46 (in case of import) or Shipping Bill(s) under Section 50 (in case of export). The "Proper Officer" may examine or test imported goods or export goods or such part thereof as may be necessary. If required, such an officer can only re-assess the goods under Section 17 of the Act. Thus, a "Proper Officer" under Section 17(1) & 17(4) of the Act is merely required to re-assess the imported goods or export goods where he differs with the self assessment of an importer or an exporter. This important change was not brought to the attention of the Hon'ble Supreme Court in Canon India Pvt Ltd Case. 210. As mentioned above, an importer or an exporter is merely required to make a self-assessment in the Bill(s) of Entry or Shipping Bill(s) as may be in the case of import or export respectively and file the same. 211. Officers who are appointed as "Proper Officers" for the purpose of Section 17 of the Customs Act, 1962 are "Officers of Customs" like any "Officer of Customs" as per Section 3 and 4 read with notification issued under these provisions. There is delegation of functions by the Board and senior officers to different class of offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dre Officer of the Custom Department in terms of Notification issued under Section 2(34) of the Act. The Officers from the Directorate of Revenue Intelligence (DRI) being "Officers of Custom" have been recognized as a "Proper Officer" for the aforesaid purpose. 218. The "proper officer" who is/was involved at the stage of assessment under Section 17 of the Act upto 08.04.2011 and reassessment after 08.04.2011 have rarely been involved in collateral adjudication of notices issued under Section 28 of the Act. However, once again at the stage of recovery of duty or penalty under other provision of the Customs Act, 1962 or redemption fine under Section 125 of the Customs Act, 1962, they are authorized. 219. Mostly, at the time of clearance of imported goods or export goods for the purpose of assessment under Section 17 of the Custom Act,1962, it is the Superintendent/Appraisers of Customs from Group 'B' Executive - Gazetted Officers who act as "proper officers". They are merely required to verify the entries made in the Bill(s) of Entry filed under Section 46 of the Act (in case of import) and or Shipping Bill(s) filed under Section 50 of the Act (in case of export). As "prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent 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 reassessment [which is involved in Section 28(4)] was made without taking note of the above mentioned amendment and changed to Section 17 of the Customs Act, 1962 with effect from 08.04.2011 vide Section 38 of the Finance Act, 2011. 224. Further, in Canon India Private Limited, Vs. The Commissioner of Customs, 2021 (376) E.L.T.3(S.C.) Show Cause Notice was dated 19.09.2014 in respect of Bill of Entry filed on 20.03.2012. The Court appears to have applied provisions of Section 17 of the Customs Act, 1962, as it stood prior to 08.04.2011 without actually referring to the said provision. 225. In Canon India Private Limited Vs. Commissioner of Customs, 2021 (376) E.L.T.3(S.C), the Hon'ble Supreme Court straightaway concluded that the officer from the Directorate of Revenue Intelligence (DRI) were not officer of customs and therefore cannot function as a "Proper Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oard has no power to appoint "Proper Officer". 232. As per Section 4 of the Customs Act, 1962, Board constituted under the provisions of Central Board of Revenue Act, 1963 is vested with the power to appoint such persons as it thinks fit to be "Officers of Customs". 233. Under sub-section (1) to Section 4(1) of the Act, the Board may appoint such person as Officers of Customs as it thinks fit. Under Section 4(2) of the Act, the Board can even authorize a Chief Commissioner of Customs or a Joint or Assistant or Deputy Commissioner of Customs to appoint any officers below the rank of Assistant Commissioner of Customs as an "Officer of Customs". This aspect has not been brought to the attention of the Hon'ble Supreme Court in Canon India Private Limited Vs. Commissioner of Customs, 2021 (376) E.L.T. 3 (S.C). 234. For an easy reference, Section 4 of the Act is reproducedbelow:- Section 4 Appointment of "Officers of Customs":- 1) The Board may appoint such persons as it thinks fit to be Officers of Customs. 2) Without prejudice to the provisions of subsection (1), [Board may authorise a Principal Chief Commissioner of Customs or a Chief Commissioner of Customs Princi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts the officers mentioned in Column (2) of the Table below to the Commissioner of Customs, the officers mentioned in column (3) thereof to be the Additional Commissioners or Joint Commissioners of Customs and Officers mentioned in column(4) thereof to be the Deputy Commissioners or Assistant Commissioners of Customs for the areas mentioned in the corresponding entry in column(1) of the said Table with effect from the date to be notified by the Central Government in the Official Gazette:- Table Area of Jurisdiction Designation of the Officers (1) (2) (3) (4) Whole of India Additional Director General, Directorate General of Revenue Intelligence posted at Headquarters and Zonal/regional units Additional Directors or Joint Directors, of Directorate of Revenue Intelligence posted at Headquarters and Zonal/regional units. Deputy Directors, or Assistant Directors of Directorate of Revenue Intelligence posted at Headquarter s and Zonal/region al units. [Notification No.17/2002-Cus. (N.T.), dated 07.03.2002] 239. Notification No.17/2002-Cus. (N.T.), dated 07.03.2002 came into force on 25.10.2002 vide Notification No.63/2002-Cus. (N.T.) dated 03.10.2002. Notification No.17/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... telligence (DRI) who are primarily drawn from the Customs Department were also given the task of issuing show cause notice and adjudicating the same in terms of Notifications issued as "Proper Officer", as defined in Section 2(34) of the Customs Act, 1962. 246. Now, under the amended Section 2(34), the word "under Section 5" has been inserted. Thus, what was implicit in the Customs Act, 1962 has now been made explicit in the amendment to the Customs Act, 1962 vide Finance Act, 2022. 247. As per Section 5(1) of the Act, an "Officer of Customs" may exercise the powers and discharge the duties conferred or imposed on him under the Customs Act, 1962, subject to such conditions and limitations as the Board may impose. 248. The power to be exercised may be subject to such conditions and limitations as the Board may impose on such an "Officer of Customs". Such officers can also exercise the powers and discharge the duties conferred or imposed on any other officers of customs who is subordinate to such officers. This aspect was also not brought to the attention of the Hon'ble Supreme Court in Canon India Private Limited Vs. Commissioner of Customs case referred to supra. 249. Only exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification, specify. - (5) The Board may, by notification, wherever necessary or appropriate, require two or more officers of customs (whether or not of the same class) to have concurrent powers and functions to be performed under this Act.". (Note: The portion in Bold represents the amendment) 251. During the interregnum in 2012, a more comprehensive notification was issued vide Notification No.40/2012-Cus. (N.T.), dated 02.05.2012. This notification fell for consideration in Canon India Private Limited Vs. Commissioner of Customs, 2021 (376) E.L.T.3(S.C). However, No.40/2012-Cus. (N.T.), dated 02.05.2012 cannot be read in isolation. It had to be read along with notifications issued under Section 4 of the Customs Act, 1962. 252. Notification No.40/2012-Cus. (N.T.), dated 02.05.2012 was also amended from time to time and has now been eventually rescinded/superseded by Notification No.26/2022-Cus. (N.T.), dated 313-2022 in tune with the amendment proposed in the Finance Bill, 2022 and passed by Finance Act, 2022. 253. Both Notification No.44/2011-Cus. (N.T.), dated 06.07.2011 and Notification No. 40/2012-Cus. (N.T.), dated 02.05.2012 as amended from time to time have also not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention that he has been so entrusted with the functions of a proper officer under Section 28 of the Customs Act, Shri Sanjay Jain, Learned Additional Solicitor General relied on a Notification No. 40/2012, dated 2-5-2012 issued by the Central Board of Excise and Customs. The notification confers various functions referred to in Column (3) of the notification under the Customs Act on officers referred to in Column (2). The relevant part of the notification reads as follows :- "[To be published in the Gazette of India, Extraordinary, Part I, Section 3, Sub-section (i)] Government of India Ministry of Finance (Department of Revenue) Notification No. 40/2012-Customs (N.T. New Delhi, dated the 2nd May, 2012 S.O. (E). - In exercise of the powers conferred by subsection (34) of section 2 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise and Customs, hereby assigns the officers and above the rank of officers mentioned in Column (2) of the Table below, the functions as the proper officers in relation to the various sections of the Customs Act, 1962, given in the corresponding entry in Column (3) of the said Table :- Sl. No. Designation of the officers Fun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercise 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 4-12-1957 issued by the Ministry of Finance and Customs officers who, till 115-2002, were appointed by the Central Government. The notification which purports to entrust functions as proper officer under the Customs Act has been issued by the Central Board of Excise and Customs in exercise of non-existing power under Section 2(34) of the Customs Act. The notification is obviously 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. 22. In the above context, it would be useful to refer to the decision of this Court in the case of Commissioner of Customs v. Sayed Ali and Another [(2011) 3 SCC 537 = 2011 (265) E.L.T. 17 (S.C.)] wherein the proper officer in respect of the jurisdictional area was considered. The consideration made is as hereunder :- "16. It was submitted that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h him that customs duty has not been levied or short levied or erroneously refunded on an import made by any individual for his personal use or by the Government or by any educational, research or charitable institution or hospital, within one year and in all other cases within six months from the relevant date, may cause service of notice on the person chargeable, requiring him to show cause why he should not pay the amount specified in the notice. It is evident that the notice under the said provision has to be issued by the 'proper officer'. 19. Section 2(34) of the Act defines a 'proper officer', thus : '2. Definitions. - ...................... (34)'proper officer', in relation to any functions to be performed under this Act, means the officer of customs who is assigned those functions by the Board or the Commissioner of Customs;' It is clear from a mere look at the provision that only such officers of customs who have been assigned specific functions would be 'proper officers' in terms of Section 2(34) the Act. Specific entrustment of function by either the Board or the Commissioner of Customs is therefore, the governing test to determine whether an 'officer of custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken by such officers under Section 97 of the Finance Act, 2022. I have already extracted Section 97 of the Finance Act, 2022 earlier in this order. Therefore, these writ petitions are liable to be dismissed and the ground that the officers of the Directorate of Revenue Intelligence (DRI) have indeed the power to issue Show Cause Notice. The defence that they are incompetent is no longer available to these petitioners. 261. In fact, the Hon'ble Supreme Court while considering the issue in paragraph 16 as to whether the officers namely the Additional Director General of Directorate of Revenue Intelligence (DRI) can be considered as the "Proper Person" has indicated the test by stating that Additional Director General can be considered to be a proper officer only if it is shown that he was a Customs Officer under the Customs Act, 1962. However, Section 4 and the notification was not brought to the attention of the Hon'ble Supreme Court. 262. Both the revenue and assesses have not brought to the attention of the Hon'ble Supreme Court in Canon India Private Limited Vs. Commissioner of Customs, 2021 (376) E.L.T. 3 (S.C.) that the officers of Directorate of Revenue Intelligence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. 268. To recognize the officers from Directorate of Revenue Intelligence as officers of Customs, the mechanism under Notification of the Central Government under Section 6 of the Customs Act, 1962 is not warranted. When Section 6 of the Customs Act, 1962 is invoked, the Central Government can entrust the function of Board and Customs officers on officers from other Departments specified therein. 269. By such entrustment, these officers of other Departments do not become Officers of Customs. They can merely function as such officers. Since entrustment under Section 6 is on the officers from other department, the Parliament by design has given the powers to the Central Government and not to the Board. 270. As the Officers from the Directorate of Revenue Intelligence, Ministry of Finance (MOF) are already "Officers of Customs" before their induction and deputation to the Board in various Directorates, there is no impediment on their being appointed as proper officers for the purpose of Section 2(34) of the Customs Act, 1962. 271. Merely because the Officers of the Customs and Central Excise Department are selected and are deputed in the respective Directorates does not mean that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove, assessment is neither by the Group 'B' Executive - Gazetted Officer nor by Group 'B' Executive - Non-Gazetted Officer after 08.04.2011. Only, prior to 08.04.2011, the assessment of goods at the port was vested with the Group 'B' Executive - Gazetted Officer. However, after the said date, the fundamental of assessment has undergone a sea change and changed permanently as mentioned above. 278. These fundamental changes brought to the manner of the assessment under the Customs Act, 1962 with effect from 08.04.2011 appear to have not been brought to the attention of the Hon'ble Supreme Court and therefore the assumption in the paragraph Nos.12 to 15 in the case of Canon India Private Limited Vs. Commissioner of Customs, 2021 (376) E.L.T.3(S.C.) may require a re-consideration insofar as pending cases before the Hon'ble Supreme Court and other Courts. 279. Further, union tax laws undergo periodical amendments during successive Finance Act. The Central Excise Act, 1944, the Customs Act, 1962, Chapter V of the Finance Act, 1994 as also the Income Tax Act, 1961 are no exception. They have undergone several amendments. These changes have a bearing on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(b) defines "Central Excise Officer" and it is mentioned therein that any officer of the Central Excise Department or any person who has been invested by the Board with any of the powers of the Central Excise Officer would be a Central Excise Officer. Thus, the Board has power to invest any Central Excise Officer or any other officer with powers of Central Excise Officer. By virtue of Section 37-B the Board can issue orders, instructions or directions to the Central Excise Officers and such officers must follow such orders, instructions or directions of the Board. However, these directions can only be for the purpose of uniformity in the classification of excisable goods or with respect to levy of duties of excise on such goods. It is thus clear that the Board has no power to issue instructions or orders contrary to the provisions of the Act or in derogation of the provisions of the Act. The Board can only issue such direction as is necessary for the purpose of and in furtherance of the provisions of the Act. The instructions issued by the Board have to be within the four corners of the Act. If, therefore, the Act vests in the Central Excise Officers jurisdiction to issue show-ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the alternate forum. 291. Thus, under the Customs Act, 1962, there are different Power Centres for appointing persons as "Officers of Customs" for discharging their powers and functions (duties) imposed under the Act. The contours of powers to be exercised by such "Officers of Customs" is to be drawn by the Board. Section 3, of the Customs Act, 1962, recognizes the classes of "Officers of Customs". It also includes such other classes of "Officers of Customs" who may be appointed for the purpose of the Act by the Board. 292. Under Sub-Section 2 to Section 4, the Board can also authorize the officers mentioned therein to appoint "Officers of Customs" below the rank of the Assistant Commissioner of Customs. 293. For giving effect to the last Sub-clause of Section 3 of the Customs Act, 1962, the Board has been vested with the power to appoint such officers as it fit to be the "Officers of Customs". 294. The other specified officers in Section 3 are from Group-A Cadre who mostly belong to the Indian Revenue Service (IRS), either appointed by direct recruitment by the Union Public Service Commission (UPSC) or those promoted from Group-B Cadre. 295. Thus, officers from Group-B wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d list the case on their turn for final hearing before the Tribunal 302. Needless to state that the respective petitioners shall predeposit amount under Section 129E of the Customs Act, 1962 and produce the proof thereof along with the appeal. 303. W.P No.18918 of 2016 filed by Chirag U Jain is partly allowed and the impugned Order-in-Original No.44560 of 2016 dated 05.02.2016 is quashed and and case is remitted back to the competent officer of the respondent to pass a fresh order on merits and in accordance with law preferably within a period of 120 days from the date of receipt of a copy of this order. 304. Considering the fact that the Order-in-Original dated 31.12.2021 has been passed pending disposal of W.P.Nos.11268, 11271, 11274 & 11156 of 2021, I am also inclined to quash the same and remit the cases back to the respondent therein to pass appropriate orders on merits. 305. It is made clear that in case the respondent(s) want(s) to rely on the statement of person who may have given statement against the petitioner, such person shall be produced for cross examination by the petitioner. 306. In case such person is not available for cross -examination, the respondent shall ..... 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