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2025 (1) TMI 1329

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..... ers to issue show cause notices - HELD THAT:- Hon'ble Supreme Court in the case of M/s Canon India Private Limited [2024 (11) TMI 391 - SUPREME COURT (LB)] held that the show cause notices in all the matters are invalid, without any authority of law and liable to be set aside and the ensuing demands are also set aside. Since in the impugned notices in the present writ petitions the period of 30 days was granted to file reply and further proceedings were stayed by this Court, therefore, all the petitioners are directed to file reply within a period of 30 days. The time limit of 30 days granted to all the petitioners for filing reply in the impugned notices would start from the date of receipt of copy of this judgment. The respondents are further directed to adjudicate the matter in accordance with law. Application disposed off.
HON'BLE MR. JUSTICE ARUN PALLI HON'BLE MRS. JUSTICE SUDEEPTI SHARMA CWP-16779-2021 (O&M), CWP-288-2023 (O&M), CWP-16751-2021 (O&M), CWP-12767-2023 (O&M), CWP-29325-2022 (O&M), CWP-17888-2021 (O&M), CWP-18416-2021 (O&M), CWP-26913-2022 (O&M), CWP-17857-2021 (O&M), CWP-18276-2022 (O&M), CWP-626-2022 (O&M), CWP-16817-2021 (O&M), CWP-23088-2021 (O&M), C .....

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..... d Another Commissioner of Customs (Export) And Another. Present: For the Petitioners: Mr. Saurabh Kapoor, Advocate and Ms. Muskan Gupta, Advocate, Mr. Deepak Gupta, Advocate, Mr. Amrinder Singh, Advocate For the respondents: Mr. Sourabh Goel, Sr. Standing Counsel with Ms. Geetika Sharma, Advocate for the respondents-Revenue. For the respondents-CBIC: Mr. Anshuman Chopra, Sr. Standing Counsel with Mr. Deepesh Kakkar, Advocate and Mr. Govinda, Advocate For the Respondents-GST: Mr. Gurinderjit Singh, Sr. Panel Counsel. SUDEEPTI SHARMA, J. 1. Since common question of law is involved in the above-numbered writ petitions, therefore, we decide these writ petitions vide this common judgment. 2. The challenge in the present writ petitions is to the show cause notices issued under Section 28 of the Customs Act, 1962 by different DRI authorities on the ground that they are not proper and competent officers to issue show cause notices, in view of judgment passed by the Hon'ble Supreme Court in M/s Canon India Private Limited Vs. Commissioner of Customs [2021 SCC Online SC 200] Civil Appeal No.1827 of 2018 decided on 09.03.2021. 3. Relevant portion of the judgment of Hon'ble Supreme C .....

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..... ional 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. In addition, that he was entrusted with the functions of the proper officer under section 6 of the Customs Act. The Additional Director General of the DRI can be considered to be a Customs officer only if he is shown to have been appointed as Customs officer under the Customs Act. * * * * * 18. The next step is to see whether an Additional Director General of the DRI who has been appointed as an officer of Customs, under the notification dated 7.3.2002, has been entrusted with the functions under Section 28 as a proper officer under the Customs Act. In support of the 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:- &q .....

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..... or entrustment of functions of Customs officer on other officers of the Central or the State Government or local authority, it reads as follows:- "6. Entrustment of functions of Board and customs officers on certain other officers - The Central Government may, by notification in the Official Gazette, entrust either conditionally or unconditionally to any officer of the Central or the State Government or a local authority any functions of the Board or any officer of customs under this Act." 21. 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, were appointed by the Central Government. The n .....

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..... rroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: Provided that where any duty has not been levied or has been short-levied or the interest has not been charged or has been part paid or the duty or interest has been erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts by the importer or the exporter or the agent or employee of the importer or exporter, the provisions of this subsection shall have effect as if for the words 'one year' and 'six months', the words 'five years' were substituted." 18. It is plain from the provision that the 'proper officer' being subjectively satisfied on the basis of the material that may be with 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 .....

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..... icers of customs vide Notification No. 19/90-Cus (N.T.) dated 26.04.1990 issued by the Department of Revenue, Ministry of Finance, Government of India. This notification later came to be superseded by Notification No. 17/2002 dated 07.03.2002 issued by the Department of Revenue, Ministry of Finance, Government of India, to account for administrative changes. (ii) The petition seeking review of the decision in Canon India (supra) is allowed for the following reasons: a. Circular No. 4/99-Cus dated 15.02.1999 issued by the Central Board of Excise & Customs, New Delhi which empowered the officers of DRI to issue show cause notices under Section 28 of the Act, 1962 as well as Notification No. 44/2011 dated 06.07.2011 which assigned the functions of the proper officer for the purposes of Sections 17 and 28 of the Act, 1962 respectively to the officers of DRI were not brought to the notice of this Court during the proceedings in Canon India (supra). In other words, the judgment in Canon India (supra) was rendered without looking into the circular and the notification referred to above thereby seriously affecting the correctness of the same. b. The decision in Canon India (supra) .....

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..... 1 by harmoniously construing it with Explanation 2 to Section 28 of the Act, 1962. We are of the considered view that the decision in Mangali Impex (supra) failed to take into account the policy being followed by the Customs department since 1999 which provides for the exclusion of jurisdiction of all other proper officers once a show cause notice by a particular proper officer is issued. It could be said that this policy provides a sufficient safeguard against the apprehension of the issuance of multiple show cause notices to the same assessee under Section 28 of the Act, 1962. Further, the High Court could not have applied the doctrine of harmonious construction to harmonise Section 28 (11) with Explanation 2 because Section 28 (11) and Explanation 2 operate in two distinct fields and no inherent contradiction can be said to exist between the two. Therefore, we set aside the decision in Mangali Impex (supra) and approve the view taken by the High Court of Bombay in the case of Sunil Gupta (supra). (v) Section 97 of the Finance Act, 2022 which, inter-alia, retrospectively validated all show cause notices issued under Section 28 of the Act, 1962 cannot be said to be unconstitutio .....

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..... he High Court and appeals have been preferred against them which are pending before this Court, they shall be disposed of in accordance with this decision and this Court shall grant eight weeks' time to the respective assessee to prefer appropriate appeals before the CESTAT. e. Where the orders of CESTAT have been challenged before this Court or the respective High Court on the ground of maintainability due to lack of jurisdiction of the proper officer to issue show cause notices, this Court or the respective High Court shall dispose of such appeals or writ petitions in accordance with the ruling in this judgment and restore such notices to the CESTAT for hearing the matter on merits. f. Where appeals against the orders-in-original involving issues pertaining to the jurisdiction of the proper officer to issue show cause notices under Section 28 are pending before the CESTAT, they shall now be decided in accordance with the observations made in this decision. 169. In view of the aforesaid, we allow the Review Petition No. 400/2021 titled Commissioner of Customs v. M/s Canon India Pvt. Ltd. and the connected Review Petition Nos. 401/2021, 402/2021 and 403/2021 insofar as th .....

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