Allahabad High Court
M/S Sultan Tanneries And Leather ... vs Union Of India And 3 Othes on 7 April, 2022
Bench: Surya Prakash Kesarwani, Ashutosh Srivastava
HIGH COURT OF JUDICATURE AT ALLAHABAD
AFR
Judgment Reserved on: 13.01.2022
Judgment Delivered on: 07.04.2022
Court No.
Case :- WRIT TAX No. - 1085 of 2021
Petitioner :- M/S Sultan Tanneries And Leather Products
Respondent :- Union Of India And 3 Others
Counsel for Petitioner :- Rahul Agarwal
Counsel for Respondent :- A.S.G.I.,Dhananjay Awasthi,Sudarshan Singh
With
Case :- WRIT TAX No. - 1092 of 2021
Petitioner :- M/S Homera Tanning Industries Pvt Ltd
Respondent :- Union Of India And 3 Others
Counsel for Petitioner :- Rahul Agarwal
Counsel for Respondent :- A.S.G.I.,Ashok Singh,Krishna Agarawal,Sudarshan Singh
With
Case :- WRIT TAX No. - 1096 of 2021
Petitioner :- M/S Homera Tanners Pvt Ltd
Respondent :- Union Of India And 3 Others
Counsel for Petitioner :- Rahul Agarwal
Counsel for Respondent :- A.S.G.I.,Amit Mahajan,Krishna Agarawal,Sudarshan Singh
Hon'ble Surya Prakash Kesarwani,J.
Hon'ble Ashutosh Srivastava,J.
(Delivered by : Hon'ble Ashutosh Srivastava,J.)
1. These writ petitions raise common issue and questions of law, therefore, they are being decided by a common order. The Writ Tax No.1085 of 2021 (M/s Sultan Tanneries and Leather Products Vs. Union of India and others) is treated as the leading writ petition.
2. We have heard Sri Rahul Agarwal, learned counsel for the petitioner, Sri Krishna Agarwal, learned counsel for the Respondent, Directorate of Revenue Intelligence (DRI) and Sri Amit Mahajan and Sri Ashok Singh, learned Senior Standing Counsels appearing for Central Goods and Service Tax/Central Excise, Kanpur.
3. The challenge raised in this writ petition is to the jurisdiction of the Commissioner, CGST and Central Excise, Kanpur, the Respondent No.4 to adjudicate the show cause notice dated 22.06.2011 issued by the Commissioner of Customs (Expert) Jawahar Lal Nehru, Customs House, Nhava Sheva, Tal Vran, District Raigarh, Maharashtra, Respondent No.2, under the Customs Act, 1962. The challenge is based on the premise that the Respondent No.4 is neither a proper officer nor is competent to pass any order under the Customs Act, 1962 in as much as the Respondent No.4 was merely assigned the jurisdiction by the order of the Board dated 20.11.2012 and cannot, therefore, be an officer appointed under Section 4(1) of the Customs Act, 1962. Further, the Parliament in its wisdom has enacted the Central Goods and Service Act, 2017 w.e.f. 01.07.2017 and consequent to such enactment, there remains no officer designated as "Commissioner of Customs, Central Excise and Service Tax, Kanpur". The Commissioner of CGST and Central Excise, Kanpur and "Commissioner of Customs, Central Excise 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.0688000932. During the period of 01.04.2006 to 30.11.2009, the petitioner exported four consignments of finished leather through Nhava Sheva Port, Navi Mumbai to different buyers in Italy. The exports were described as "finished leather made out from buffalo hides" in all the shipping bills, Invoice, Packing List and Certificate of origin. The exports were classified as "Finished Leather of all kinds" under Chapter Heading 4107 of the Schedule II (Export Policy) of ITC (HS). The exports being finished leather was free (without any restrictions) provided the leather confirmed to the specifications under Public Notice of Government of India, Ministry of Commerce dated 27.05.1992 (Public Notice No.3). The Officers of the DRI on the strength of some statements tendered before them by some quality Inspector for some Italian Buyers in India concluded that the shipments exported by the petitioner to the Italian Buyers were not of finished leather: but of Semi finished leather and the petitioner has availed inadmissible exemption of export duly @ 60% during the period 01.04.2006 to 30.11.2009 along with inadmissible export incentives of duty drawback and DFIA Schemes. Consequently, the petitioner was served with the impugned show cause notice dated 22.06.2011 by the Respondent No.2 directing the petitioner, its Directors, its CHA's transferees of DFIA License and to whomsoever concerned to show cause as to why;
(i) Goods having declared FOB value of Rs.1,59,69,201/- should not be confiscated;
(ii) Export duty amounting to Rs. 95,81,520/- should not be recovered along with interest;
(iii) The amount of DFIA benefits availed against respective lincenses in respect of shipping Bill should not be denied and the licenses themselves may not be recommended for cancellation;
(iv) Import duty forgone of Rs.1,89,47,771/- should not be demanded and recovered along with interest and the goods so imported should not be confiscated; and
(v) Penalty should not be imposed jointly and severally under Sections 114, 114A, 114AA and 117 of the Customs Act.
5. By order dated 20.11.2012 issued by the Board, the Respondent No.3 was appointed as Common Adjudicating Authority. However, the matter was kept pending and on 13.01.2020 a notice came to be issued by the Superintendent CGST and Central Excise, Kanpur Intimating the date of 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 consequential to demand under Section 28 and 75 of Customs Act and Rule 16 of Drawback Rules, 1995 are bad in law
(iv) The demand of export duty is not sustainable on merits.
(v) The demand of import duty is not sustainable on merits.
(vi) Section 28AAA of the Customs Act cannot be invoked.
(vii) Once the authorisation was issued by DGFT with open eyes, the respondents cannot question the benefits extended under the authorisations.
(vii) The show cause notice is otherwise bad in law.
Submissions of the Petitioner:
7. It is vehemently contended by Sri Rahul Agarwal, learned counsel appearing on behalf of the writ petitioner that order under Section 28 of the Customs Act and Rule 16 of the Drawback Rules can be passed only by a "Proper Officer" as defined under Section 2(1) of Customs Act while adjudication of confiscation and penalties can be done by an "Adjudicating Authority" as defined under Section 2(34) of the Customs Act. Section 3 of the Customs Act provides for classes of Officers of Customs which includes Commissioner of Customs etc. and the Respondent No.4 does not fall under any of the class of officers specified under the said section. Section 4 of the Customs Act confers power on the Board to appoint such persons as it thinks fit to be the officer of Customs but no notification under Section 4 has yet been issued notifying the Respondent No.4 as an officer of Customs. Likewise under Section 6 of the Customs Act, the Central Government is empowered to entrust either conditionally or unconditionally, to any officer of the Central Government or State Government or a local authority any functions of the Board or any officer of Customs under the Act but till date no such notification has been issued by the Central Government entrusting the Respondent No.4 with any function of the Officer of Customs.
8. He further submits that the Respondent No. 4 was earlier appointed as "Commissioner of Central Excise" under the Central Excise Act, 1944 and upon the enactment of the Central Goods and Services Tax Act, 2017 (CGST Act), the Respondent No. 4 will be deemed to be an officer appointed under CGST Act by virtue of Section 3 of the CGST Act and thus cannot be called a ""Proper Officer"" or "adjudicating authority" under the Customs Act. Consequently, the assumption of jurisdiction to proceed under the impugned notice 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, 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."
9. Reliance is also placed upon the decision of the Apex Court in the case of Commissioner of Customs versus Sayed Ali [2011 (3) SCC 537] to emphasis the point that it is only such Customs Officer who have been assigned the specific function of assessment and reassessment of duty in the jurisdictional area where the import concerned was effected, who are competent to issue notice under Section 28 of the Act. In the case at hand, the Respondent No. 2 is not the person who was assigned the specific function of assessment and reassessment of duty and as such, is not the "Proper Officer" having jurisdiction to issue notice under Section 28 of the Act.
Submissions of the Respondents:
10. Per contra, Sri Ashok Singh, learned Senior Standing Counsel for the District Taxes in opposition to the writ petition submits that in view of the orders of the Board dated 10.11.2012, 09.06.2015 and 17.10.2018 read with the queries made by the Principal Chief Commissioner, CGST and Central Excise, Lucknow dated 31.05.2018 and the order of the Board dated 28.11.2019, the Respondent No. 4 has the jurisdiction to adjudicate the impugned show cause notice.
11. Sri Amit Mahajan, learned Senior Standing Counsel for direct taxes who has appeared in Writ Tax No. 1096 of 2021 submits that the Notifications above mentioned have been considered by the Gujrat High Court in Swati Menthol & Allied Chem. Ltd. versus Jt. Dir., DRI, [2014 (304) ELT 21 (Guj.)], and in view of the judgment of the Gujrat High Court, the writ petition has no merit and is liable to be dismissed.
12. Sri Krishna Agarwal, learned counsel for the respondent-DRI, in opposition to the writ petitions, submits that the DRI Officers and Customs, in view of the Notification No. 31/1997 (N.T.) dated 07.07.1997 and Notification No. 15/2002-Customs (N.T.) dated 07.03.2002 (as amended) issued under Section 4 (I) of the Customs Act, 1962 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 that Sub Section (11) of Section 28 of the Customs Act, 1962 was inserted by Act No. 14 of 2011 w.e.f. 16.9.2021 which provides that notwithstanding anything to the contrary contained in any judgment, decree or order of any Court of Law, Tribunal or other Authority, all persons appointed as officers of Customs under sub-Section (1) of Section 4 before the 6th day of July, 2011 shall be deemed to have and always had the power of assessment under Section 17 and shall be the power of assessment under Section 17 and shall be deemed to have been and always had been proper officers for the purpose of Section 28. He thus submits that the submissions of the learned counsel for the petitioner are without substance and contrary to the relevant provisions and notifications and as such do not merit consideration and the writ petitions warrant outright dismissal.
Discussion and Findings:
13. We have carefully considered the rival contentions of learned counsel for the respective parties and have perused the record. The short questions that call for consideration in these bunch of writ petitioners are firstly, as to whether in the facts of the case, the impugned show cause notice issued by the Respondent No.2 is valid in law and the Respondent No.2 is possessed of the jurisdiction to issue the same and secondly, as to whether the Respondent No.4 has the jurisdiction to adjudicate the show cause notice issued by the respondent No.2.
14. In order to answer the questions aforesaid, it would be apt to consider certain provisions of the Customs Act, 1962 and refer to circulars and Notifications issued by the CBE & C. Section 2(34) of the Customs Act, 1962 defines the term "Proper Officer" as under:-
"2(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 [Principal Commissioner of Customs or Commissioner of Customs]"
15. The term "Proper Officer" is used at various places under the Act, under Section 17 it is "Proper Officer" who can verify the self-assessment of goods and examine or test any imported goods or exported goods as may be necessary. Likewise under Section 18 it is the "Proper Officer" who may undertake the exercise of provisional assessment and direct the importer to pay difference in duty or furnish security as deemed 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 in the case of Commissioner of Customs vs. Sayed Ali, reported in 2011 (265) ELT 17 (SC) has held that it is only the officers of Customs, who are assigned the functions of assessment working under the jurisdiction of Collectorate/Commissionerate within whose jurisdiction Bills of entry or baggage declaration had been made and the consignment having been cleared will have jurisdiction to issue notice under Section 28 of the Act. In the said case, the assessee who was engaged in the business of carpet manufacturing and export was charged with the misuse of the Export Pass Book Scheme by selling goods cleared duty free in the open market or selling the pass book in premium in violation of the restrictions imposed on such sale. Investigation was conducted by the Marine and Preventive Wing of Customs and the Assistant Collector of Customs (Preventive), Mumbai, issued show cause notice alleging violations of the provisions of Section 111(d) of the Customs Act. At an appellate stage, the Collector (Appeals) though set aside the order passed by the Assistant Collector, granted liberty to the Department to re-adjudicate the case after issuing proper show cause notice. Fresh notice was issued under Section 28 (1) of the Customs Act by the Collector of Customs (Preventive) which was questioned on the ground of jurisdiction of the Collector of Customs (Preventive) to proceed in the matter. It was in this background that the Apex Court rendered its decision holding that only such Custom Officers who have been assigned the specific functions of assessment and reassessment of duty either by the board or the Commissioner of the Customs in terms of Section 2(34) in the jurisdiction at area where the import concerned has been affected, who is competent to issue notice under Section 28 of the Act.
18. Perhaps since the decision of the Hon'ble Supreme Court in the case of Sayed Ali (Supra) would upset large number of pending and even concluded proceedings, the Legislature in its wisdom introduced sub-Section (11) of Section 28, which provides as under:-
"(11) Notwithstanding anything to the contrary contained in any judgment, decree or order of any Court of law, Tribunal or other authority, all persons appointed as officers of Customs under sub-section (1) of section 4 before the sixth day of July, 2011 shall be deemed to have and always had the power of 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 validated since these officers are retrospectively recognized as 'proper officers' for the purpose of Sections 17 and 28 of the said Act.
*** **** ***
*** **** ***
5. In this regard it may also be noted that in terms of Notification No. 44/2011-Customs (N.T.) , dated 6-7-2011 the officers of DRI and DGCEI are 'proper officers' for the purposes of Section 28. However, it is hereby directed by the Board that these officers shall not exercise authority in terms of clause (8) of Section 28 of the said Act. In other words, there shall be no change in the present practice and officers of DRI and DGCEI shall not adjudicate the show cause notices issued u/s 28 of the said Act."
20. A perusal of the aforesaid notification dated 23.09.2011 issued by the Board would show that sub-Section (11) would operate notwithstanding anything contrary to the judgment, decree or order of any Court and all persons appointed as officers of the Customs under sub-Section (1) of Section 4 before the 6th Day of July, 2011 would be deemed to have always had the power of assessment under Section 17 and should be deemed and always should be considered as proper officers for the purpose of the said section.
21. In the context of the inquiry, whether the Respondent No.2 can be stated to be an "Proper Officer", we may refer to the different notifications of the Central Board of Excise and Customs, which have been placed before us for consideration.
22. Notification dated 07.07.1997 provided as under:-
"...... In exercise of the powers conferred by sub-section (1) of section 4 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 38/63-Customs, dated 1st February, 1963 the Central Government hereby appoints the following persons to be the Officers of Customs, namely:-
1. Appraisers, Examiners, Superintendent Customs (Preventive), Preventive Officers, Women Searchers, Ministerial Officers and Class IV Officers in the Customs Department in any place in India.
2. Superintendents, Inspectors, Women Searchers, Ministerial staff and Class IV staff of Central Excise Department, who are for the time being posted to a Customs port, Customs airport, Land-Customs station, Coastal port, Customs preventive post, Customs Intelligence 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.
Commissioners of Customs (Preventive), Additional Commissioners or Joint Commissioners of Customs (Preventive), Deputy Commissioners or Assistant Commissioners of Customs (Preventive).
3.
Additional Director Generals, Additional Directors or Joint Directors, Deputy Directors or Assistant Directors in the Directorate General of Central Excise Intelligence.
4.
Commissioners of Central Excise, Additional Commissioners or Joint Commissioners or Central Excise, Deputy Commissioners or Assistant Commissioners of Central Excise.
[F. No.437/143/2009-Cus.IV]
(Vikas)
Under Secretary to the Government of India"
24. Notification dated 06.07.2011 provides as under:-
"S.O. (E) - In exercise of 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:-
Sl. No.
Designation of the officers
1
2
1.
Additional Director Generals, Additional Directors or Joint Directors, Deputy Directors or Assistant Directors in the Directorate General of Revenue Intelligence.
2.
Commissioners of Customs (Preventive), Additional Commissioners or Joint Commissioners of Customs (Preventive), Deputy Commissioners or Assistant Commissioners of Customs (Preventive).
3.
Additional Director Generals, Additional Directors or Joint Directors, Deputy Directors or Assistant Directors in the Directorate General of Central Excise Intelligence.
4.
Commissioners of Central Excise, Additional Commissioners or Joint Commissioners or Central Excise, Deputy Commissioners or Assistant Commissioners of Central Excise.
[F. No.437/143/2009-Cus.IV]
(Vikas)
Under Secretary to the Government of India"
25. Under the Notification dated 02.05.2012 the Central Board of Excise and Customs assigned various officers 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
***
***
26. A perusal of the notification dated 02.05.2012, however, reveals that officers of the Directorate of Revenue Intelligence (DRI) have not been assigned specific function of adjudication under Section 28 of the Customs Act.
27. 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 Sayed Ali (Supra) 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.
28. The Government of India, Ministry of Finance (Department of Revenue) Central Board of Excise and Customs vide order dated 20.11.2012 issued in terms of Notification No.15/2002-Customs (N.T.) dated 07.03.2002 (as amended) issued orders as under:-
F.No.437/17/2011- Cus. IV
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Excise & Customs
New Delhi, dated the 20th November, 2012.
ORDER
In terms of Notification No. 15/2002-Customs (N.T.) dated 07.03.2002 (as amended) issued under sub-section (1) of section 4 of the Customs Act, 1962 (52 of 1962), the Board hereby assigns the Show Cause Notices mentioned in column (2) of the Table below, issued by the authorities mentioned in column (3) in the case of parties mentioned in column (4) to the Commissioner of Customs, Central Excise and Service Tax, Kanpur for the purpose of adjudication.
Table
S.No
Show Cause Notice No. and date
Issuing Authority
Party Name
DRIF.No./VIII/DRI/LZU/26/26/2008/Allahabad/33 dated 04.04.2011
Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow.
M/s Allahabad Tannery Kanpur
DRI F.No/VIII/DRI/LZU/26/26/2008/Crescent dated 04.04.2011
Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow.
M/s Crescent Tanners Pvt. Ltd., Kanpur
DRI F.No.VIII/DRI/LZU/26/26/2008/Iqbal dated.05.04.2011
Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow.
M/s Iqbal Leathers Limited, Kanpur
DRI F.No/VIII/DRI/LZU/26/26/2008/Model Exims dated 06.04.2011
Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow.
M/s Model Exims, Kanpur
DRI F.No/VIII/DRI/LZU/26/26/2008/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
DRI F.No.VIII/DRI/LZU/26/26/2008/Seema dated.08.04.2011
Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow.
M/sSeema Exports, Kanpur
DRI F.No.VIII/DRI/LZU/26/26/2008/Homera Dt. 11.04.2011
Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow.
M/s Homera Tanning Industries Pvt. Ltd., Kanpur
DRI F.No.VIII/DRI/LZU/26/26/2008/Super/292-304 Dt. 21.04.2011
Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow.
M/s Super Tannery Ltd., Kanpur
DRI F.No.VIII/DRI/LZU/26/26/2008/Everest Dt. 26.04.2011
Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow.
M/s Everest Tannery Pvt. Ltd. Kanpur
C.No.VIII/HQ/10/ACE/Adj./742/11/2779 Dt. 13.05.2011
(a) The Commissioner of Customs (Export) IGI Airport New Delhi
M/s Alig Tannery, Kanpur
DRI/F.No.VIII/DRI/LZU/26/26/2008/Alig S/6-B-Misc 46 /2011-CFS(M)(X) both Dt. 09.05.2011
(b) The Commissioner of Customs New Customs House, Mumbai.
DRI/F.No.VIII/DRI/LZU/26/26/2008/Penza S/10-Misc 6/2011-12Adj(X) both Dated 20.05.2011
Commissioner (Export), JawaharLal Nehru Custom House, Nhava Sheva, Tal Urran, District Raigarh, Maharashtra-400707.
M/s Penza Leathers,, Kanpur
C.No.VIII/HQ/10/ACE/Adj./754/2011/4435Dt.01.07.2011 F.No.S-10/Misc/10/2011-12Adj(X) DRI F.No.VIII/DRI/LZU/26/26/2008 Sunrise both Dt.02.06.2011
The Commissioner of Customs (Export), Air Cargo Export, New Custom House, New Delhi.
M/s Sunrise Overseas, Kanpur
F.No.S-6-B-Misc-65/2011CFS(M)(X)/417 VIII/DRI/LZU/26/26/2008 Sunrise both Dt.02.06.2011
The Commissioner of Customs (Mulund CFS & General), Mumbai.
F.No.S-10/Misc./14/2011-12 Adj (X) VIII/DRI/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
F.No.S-10/Misc.-14/1/2011-12 Adj(X) VIII/DRI/LZU/26/26/2008/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
F.No.S-10/Misc./14/02/2011-12-12 Adj(X) VIII/DRI/LZU/26/26/2008/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.
DRI.F.No.VIII/DRI/LZU/26/26/2008/KCK/Exports/1340to1354 Dt. 26.08.2011
Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow.
M/s Hides International Limited Kanpur (erstwhile M/s KCK Exports Ltd. Kanpur).
DRI F.No.VIII/DRI/LZU/26/26/2008/Upper India /1272 to 1283 Dt.11.08.2011
Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow.
M/s Upper India Tannery Pvt., Kanpur
DRI F.No.VIII/DRI/LZU/26/26/2008/Superhouse Dt. 09.09.2011
Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow.
M/s Superhouse Ltd.,
DRI F.No.VIII/DRI/LZU/26/26/2008/Penza /1259 to 1268 Dt.26.09.2011
Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow.
M/s Penza Tanning Ind. Pvt. Ltd., Kanpur
DRI F.No.VIII/DRI/LZU/26/26/2008/Hafeez/ 1935-1940 Dt.09.12.2011
Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow.
M/s Hafeez Sons Tannery Pvt. Ltd., Kanpur
DRI F.No.VIII/DRI/LZU/26/26/2008/Homera Dt.12.01.2012
Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow.
M/s Homera Tanners Pvt. Ltd. Kanpur
DRI F.No.VIII/DRI/LZU/26/26/2008/Saba/2252-2257 Dt.22.02.2012
Additional Director General, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow.
M/s Saba Exports, Kanpur
DRI F.No.VIII/DRI/LZU/26/26/2008/Tanners/ 2727 to 2732 Dt.02.04.2012
Deputy Director, Directorate of Revenue Intelligence, Lucknow Zonal Unit - Lucknow.
M/s Tanners India, Kanpur
DRI F.No.VIII/DRI/LZU/26/26/2008/Best/2278 to 2383 Dt.24/04/2012
Additional Director General, 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 authority in cases investigated by DRI upto the level of Commissioner of Customs have been delegated to Principal Director General of Directorate of Revenue Intelligence in terms of section 152 of the Customs Act, 1962. This notification was issued in the interest of expediting decision making with resultant benefits to both trade and revenue in terms of faster settlement of outstanding disputes. These appointments were done hitherto by the Central Board of Excise and Customs under sections 4 and 5 of the Customs Act 1962.
2. In the light of the aforementioned notification, all cases of appointment of common adjudicating authority in respect of cases investigated by DRI will be handled by Principal DG, DRI. In this regard, the Board has prescribed the following guidelines for Principal DG, DRI:
(a) The following cases initiated by DRI shall be assigned to Additional Director General (Adjudication), DRI:
(i) Cases involving duty of Rs.5 crores and above;
(ii) Group of cases on identical issues involving aggregate duty of Rs.5 crores or more;
(iii) Cases involving seizure value of Rs.5 crores or more;
(iv) Cases of over-valuation irrespective of value involved; and
(v) Existing DRI cases with erstwhile Commissioner (Adjudication)
(b) Cases other than at (a) above involving more than one Customs Commissionerate would be assigned to the jurisdictional Commissioner of Customs on the basis of the maximum duty evaded;
(c) Cases other than at (a) above involving a single Customs Commissionerate would be assigned to the jurisdictional Commissioner of Customs;
(d) Non-DRI cases pending with erstwhile Commissioner (Adjudication) would be assigned to Additional Director General (Adjudication), DRI;
(e) Past DRI cases pending for adjudication with jurisdictional Commissioners of Customs would continue with these officers;
(f) Remand cases would be decided by the original adjudicating authority.
3. All other cases of appointment of common adjudicator i.e. other than the cases mentioned in paragraph 2 above would continue to be dealt by the Board. This would include cases made by Commissionerates or cases made by DRI wherein the adjudicating officer is an officer below the level of Additional Director General (Adjudication), DRI.
4. Board has also decided that all the 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)
********
New Delhi, the 17th October, 2018
To,
The Principal Chief Commissioner,
GST & Central Excise,
Lucknow Zone
7-A, Ashok Marg,
Lucknow-226001
Sir,
Sub: Clarify jurisdiction of the 24 cases related with the Customs wherein the SCNs issued by DRI, Lucknow and other port authorities - reg.
Please refer to you letter C.No. V(30) CCO/LKO/ Tech/ Adj./08/ 2018 dated 31.05.2018 on the subject cited above.
In this regard, it is brought to your notice that the Commissioner of Customs, Central Excise & Service Tax, Kanpur, appointed as an officer of Customs to adjudicate the cases vide CBEC order dated 20.11.2012 continues to be an officer of Customs to adjudicate the cases assigned to him. Further, Board's circular no. 18/2018-Customs dated 09.06.2015 lays down that past DRI cases pending for adjudication with the jurisdictional Commissioner of Customs continues with these officers.
In view of the above, you are requested to direct the concerned officer to expedite adjudication proceedings.
Yours faithfully,
(Zubair Riaz)
Director (Customs)
31. As noted, the notification for the purpose of Section 2(34) of the Customs Act assigns functions of the proper officer to the various officers including those under the Directorate of Revenue Intelligence, such as Additional Director, Joint Director, Deputy Director and Assistant Directors for the purposes of Sections 17 and 28 of the Customs Act.
32. From the perusal of the aforesaid 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 of Customs, who is assigned specific functions.
33. In such view of the matter, we find substance in the submissions made by the learned counsel representing the respondents and, accordingly, hold that the Respondent No.2 had the jurisdiction to issue impugned show cause notice. At the same time we hold that the Respondent No.4 has the jurisdiction to adjudicate 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 in holding, that there is no requirement in the Act or Rules, nor do the principles of natural justice and fair play require that the witnesses whose statements were recorded and relied upon to issue the show cause notice, are liable to be examined at that stage. If the Revenue choose not to examine any witnesses in adjudication, their statements cannot be considered as evidence. However, if the Revenue choose to rely on the statements, then in that event, the persons whose statements are relied upon have to be made available for cross examination for the evidence or statement to be considered.
17. We are, therefore, clearly of the opinion that there is no right, procedurally or substantively or in compliance with natural justice and fair play, to make available the witnesses whose statements were recorded, for cross examination before the reply to the show cause notice is filed and before adjudication commences. The exercise of cross-examination commences only after the proceedings for adjudication have commenced."
35. We are in full conferment with the view taken by the Coordinate Bench in the aforesaid case. Admittedly, in the instant case, the proceeding for adjudication are yet to commence. In such view of the matter, the ratio of the case of Commissioner of Central Excise, Meerut-I (Supra) is squarely applicable to the case of the present writ petitioner.
36. In view of the above discussion, we find that the petitioner is not entitled to any of the relief claimed in the writ petition. The writ petition is devoid of merit and is, accordingly, dismissed.
37. Since the leading Writ (Tax) No.1085 of 2021 has been dismissed, therefore, the Writ (Tax) No.1092 of 2021 and Writ (Tax) No.1096 of 2021 are also dismissed.
Order Date :- 07.04.2022
pks
(Ashutosh Srivastava,J.) (Surya Prakash Kesarwani,J.)
