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TMI Blog2024 (3) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... mentary notice may be issued? HELD THAT:- The provisions states that no order confiscating any goods or imposing any penalty on any person shall be made under Chapter (XIV) of the Act unless the owner of the goods are such persons-(a) is given a notice in writing with the prior approval of the officer of the Customs not below the rank of Assistant Commissioner of Customs, informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty. Clause (b) and (c) would not be relevant for the purpose of this case equally the first proviso is also not relevant. The second proviso which was inserted by the Act 13 of 2018 with effect from 29.03.2018 states that notwithstanding issue of notice under Section 124 the proper officer may issue a supplementary notice under such circumstance and in such manner as may be prescribed. Whether prior to insertion of the second proviso with effect from 29.03.2018 can it be said that there was no power conferred on the authority to issue a supplementary show cause notice or an addendum to a show cause notice already issued under Section 124 of the Act? - HELD THAT:- In STATE OF RAJASTHAN VERSUS. LEELA JAIN [ 1964 (9) TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with these three noticees who are the officers of the department one more person who has been included as a noticee who was not a noticee in the notice dated 26.08.2016 is Jyoti Biswas. The other noticees namely 5 to 10 are the noticees in the notice dated 26.08.2016. Therefore, it is clear that the show cause notice dated 18.05.2017 is a notice issued based on new facts which emerged pursuant to the investigation conducted after the issuance of the show cause notice dated 26.08.2016 and for all the purposes it shall be treated as show cause notice and the word supplementary used therein is only to indicate that it needs to be adjudicated along with the notice dated 26.08.2016. Therefore, the adjudicating authority was correct in rendering the finding in his order dated 09.01.2023 that the supplementary show cause notice, although termed as the supplementary, is actually an independent show cause notice even though it relates with the case of smuggling which is also a subject matter of the first show cause notice dated 26.08.2016. The tribunal has committed an error in interfering with the order dated 09.01.2023 passed by the adjudicating authority - The order passed by the trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein to Sub-Section (2)(f) was inbuilt with the wordings the Circumstances under which, and the manner in which, the supplementary notice may be issued ? 2. We have heard Mr. K.K Maiti, Learned Senior Standing Counsel assisted by Mr. Tapan Bhanja learned advocate appearing for the appellant revenue and Mr. Arijit Chakraborty advocate assisted by Mr. Nilotpal Chaudhury and Mr. Pradip Bera, learned advocates appearing for the respondent. 3. The officers of the Directorate of Revenue Intelligence, Kolkata (DRI) acting on specific intelligence intercepted one consignment of M/s. Srijita Export on 04.03.2016 and on examination recovered 14,790 kilograms of red sanders valued at Rs. 6,65,55,000/-. During the course of investigation, it was found that one Sudhir Jha had handled the export consignment and submitted documents before the customs for the purpose of shipment. These documents were found to be forged and false and it was also found that there were 15 other exports shipments made earlier by the same group or on the strength of fake shipping documents using IEC for some parties namely M/s. Srijita Export, M/s. Akash Ganga Enterprise, M/s. Gopal Associates and M/s. Sayantika Ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signments in the office of the DRI, Kolkata and that he returned the documents after shipment. The respondent had paid freight and transport charges for all the 16 consignments. He further stated that he knew the Deputy Commissioner, Vikas Kumar when he met him at the Customs House, License department in connection with the grant of CHA License and Dock Sircar License. Sudhir Jha is said to have confirmed that the seized DVD contained 10 forged copies of ARE-(1) used in relation to smuggling of red sanders in the name of M/s. Sayantika Enterprise, M/s. Gopal Associates and M/s. Kailash Ganga Enterprise. The DVD was sent for forensic examination at CFSL, Chandigarh and was confirmed that the contents of the DVD are genuine, unedited and untampered. The analysis of the voice clips showed deep involvement of the respondent in the fraudulent transactions and illegal exports. Statements of the Deputy Commissioner Vikas Kumar, the respondent and Kislay were recorded who have stated to have given evasive replies to most of the questions put to them. All the three of them refused to give voice samples citing privacy issue. 5. It is further stated that the CDR analysis of the mobile numbers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certifying the authenticity of the contents of the DVD and the voice samples sent for testing as that of the Jyoti Biswas. The department would contend that the findings of the investigation clearly suggested that the three departmental officers which includes the respondent were deeply involved and had masterminded the smuggling of red sanders for pecuniary gain. Separate criminal prosecution has been initiated by the CBI and department proceedings were also initiated against the respondent and the two officers under the provisions of the CCS (CCA) Rules, 1965. 7. The respondent filed the writ petition before this court in WPO No. 290 of 2018 challenging the validity of the notice dated 18.05.2017 and the addendum dated 22.09.2017. By order dated 02.03.2022, the department was directed to consider and dispose of the objections given by the respondent. The Commissioner of Customs (Port), the appellant herein considered the representation of the respondent and by order dated 09.01.2023 held that there was no reason to set aside the notice dated 18.05.2017 titled as Supplementary Show Cause Notice . Aggrieved by the same, the respondent preferred appeal before the tribunal. The tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ency 2018 (360) ELT 77 (Bom) . Reliance was also placed on the decision in the case of Alpa Laboratories Versus Deputy Collector of Customs, ACC, Mumbai 2004 (177) ELT 93 (Bom) which decision was upheld by the Hon ble Supreme Court as reported in 2005 (129) ELT A 100 (SC) Reliance was also placed on the decision in the case of Krishna and Company Versus Union of India 2003 (159) ELT 32 (Del). Reliance was placed on the decision of the Hon ble Supreme Court in the case of Commissioner of Customs, Kolkata Versus Grand Prime Limited 2003 (155) ELT 417 (SC) to point out that in the said case also, a supplementary show cause notice was issued to the respondent therein. Reliance has been placed on the decision of the tribunal in the case of Vijay N. Naik Versus Collector of Customs, Kolkata 1996 88 ELT 65 (Tribunal) wherein the directions was issued to the authority to decide the matter after opportunity to the appellant therein and the issue regarding the legality or illegality of the issuance of the supplementary show cause notice was not disputed in the said case. 10. Further it is submitted that the tribunal ought to have appreciated that the respondent is an officer of the departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rank of Assistant Commissioner of Customs has to be obtained whereas in the second proviso, it has been stated that the proper officer may issue a supplementary notice under such circumstances and in such manner as may be prescribed. Section 2(34) was referred to which defines the term proper officer and it is submitted that the power given under Section 124(a) and the power given in the second proviso are distinct and different. Apart from that, the supplementary notice can be issued by the proper officer in terms or the power conferred under the second proviso in the manner that may be prescribed which was prescribed in the form of a Regulation in the year 2019. Thus, it is submitted that the combined reading of the words under such circumstances and in such manner as may be prescribed occurring in the second proviso can only mean that the second proviso is only prospective in operation and prior to the insertion of the second proviso which was inserted with effect from 29.03.2018, there was no power vested with the department to issue a supplementary show cause notice. The learned advocates further urged that the Additional Director General of the DRI is not a proper officer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nspector of Customs formed a syndicate along with others for smuggling red sanders and took active part in the smuggling of seized 14,790 kilograms of red sanders and suspected smuggling of 225 metric tonnes of red sanders that he actively engaged himself in the well planned modus operandi of smuggling of prohibited goods involving tampering with material facts related to the case, manipulating evidences, forging Central Excise and Customs and other related documents. It is further stated that the respondent appears to have created forged documents which was for smuggling of red sanders in respect of 15 consignments. Further it is stated that the respondent arranged finance for transportation and other logistic support for export of red sanders. The respondent challenged the show cause notice dated 18.05.2017 in WPO No. 290 of 2018 on the ground that it is without jurisdiction and law does not permit the issuance of the supplementary show cause notice. The writ petition was disposed of by order dated 02.03.2022 after taking note of the facts that the respondent had filed their objections to this notice on 14.05.2018 and therefore the court deemed fit to direct the appellant to cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty on any person shall be made under this Chapter unless the owner of the goods or such person- (a) is given a notice in writing with the prior approval of the officer of customs not below the rank of an Assistant Commissioner of Customs, informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty; (b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; and (c) is given a reasonable opportunity of being heard in the matter: Provided that the notice referred to in clause (a) and the representation referred to in clause (b) may at the request of the person concerned be oral. Provided further that notwithstanding issue of notice under this section, the proper officer may issue a supplementary notice under such circumstances and in such manner as may be prescribed. 16. The above provisions deals with issues of the show cause notice before confiscation of the goods, etc. The provisions states that no order confiscating any goods or imposing any penalty on any person shall be made under Chapter (XI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Versus Bezwada Municipality AIR 1944 (PC) 71 Lord Macmillan observed that the proper function of a proviso is to except and deal with a case which would otherwise fall within the general language of the main enactment, its effect is combined to that case. Thus, the law and the subject is very clear to the effect that the provisos are clauses of exception or qualification in the Act, excepting something out of or qualifying something in the enactment which but for the proviso would be within it. It has been held that the correct manner of interpretation of a proviso is that when one finds so in a section but for the proviso the enacting part of the section could have included the subject matter of the proviso. It is clear that prior to the insertion of the second proviso the power to issue the show cause notice, supplementary show cause notice, addendum was implicit and inbuilt in Section 124 of the Act. Therefore, the argument that the second proviso had been inserted with effect from 29.03.2018 and the Regulations came only in the year 2019, the same can be only prospective and therefore the notice dated 18.05.2017 is without jurisdiction is an argument which deserves to be rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n conducted after the issuance of the show cause notice dated 26.08.2016 and for all the purposes it shall be treated as show cause notice and the word supplementary used therein is only to indicate that it needs to be adjudicated along with the notice dated 26.08.2016. Therefore, the adjudicating authority was correct in rendering the finding in his order dated 09.01.2023 that the supplementary show cause notice, although termed as the supplementary, is actually an independent show cause notice even though it relates with the case of smuggling which is also a subject matter of the first show cause notice dated 26.08.2016. 21. For all the above reasons, we hold that the tribunal has committed an error in interfering with the order dated 09.01.2023 passed by the adjudicating authority. 22. In the result, the appeal is allowed. The order passed by the tribunal is set aside, the order of the adjudicating authority dated 09.01.2023 stands restored and the substantial questions of law are answered in favour of the appellant revenue. 23. The adjudicating authority is directed to proceed with the adjudication of the show cause notice dated 18.05.2017 and the addendum dated 22.09.2017 afte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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