Karnataka High Court

M/S. Poorna Graphics vs Joint Commissioner Of Customs on 12 January, 2022

Bench: S.Sunil Dutt Yadav

                             1


     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 12TH DAY OF JANUARY, 2022

                         BEFORE

      THE HON'BLE MR. JUSTICE S. SUNIL DUTT YADAV

       WRIT PETITION NO.15731 OF 2021 (T-RES)

BETWEEN:

1.    M/s. Poorna Graphics,
      Ganesha Temple Compound,
      III Cross, Singhainpalya,
      Bangalore - 560 048,
      (Represented by its Partner
      Shri. Ravi Sivaraman,
      S/o S. Sivarman,
      Aged about 56 years).

2.    Ravi Sivaraman,
      S/o S.Sivarman,
      Ganesha Temple Compound,
      III Cross, Singhainpalya,
      Bangalore - 560 048,
      (Aged about 56 years).

3.    Naveen Kumar,
      S/o M. Babu Rao,
      Chartered Accountant,
      No. F-4, 1st Floor,
      Bosco Court, Gandhi Bazar, Basavanagudi,
      Bangalore - 560 004,
      (Aged About 58 Years).
                                           ... Petitioners

(By Sri.B.G.Chidananda Urs, Advocate)
                               2


AND:

1.   Joint Commissioner of Customs,
     Office of the
     Additional Commissioner of Customs,
     Inland Container Depot, White Field,
     Bengaluru - 560 066.

2.   Additional Director,
     Ministry of Finance,
     Directorate of Revenue Intelligence,
     No.8(P), 1st Stage, 3rd Block,
     HBR Layout, Opp. to BDA Complex,
     Bengaluru - 560 043.
                                               ...Respondents

(By Sri Amit Deshpande, Advocate)

                              *****
      This Writ Petition is filed under Articles 226 and 227 of
the Constitution of India praying to quash the show cause
notice dated 13.03.2018 at Annexure-J issued by R2 is not
issued by proper officer under the Act and hence bad in law
and without jurisdiction.

     This Writ Petition coming on for Orders, this day, the
Court made the following:

                          ORDER

The petitioner has called in question issuance of the

Show Cause Notice dated 13.03.2018 at Annexure-J on the

ground that the said notice is not issued by a proper Officer

and is bad in law. The petitioner has also sought for setting

aside of the Adjudication Order in OIO No.182/2020-21

dated 31.12.2020 passed by the respondent No.1 at

Annexure-M as being passed on the basis of the Show Cause

Notice which was issued without authority of law and has

sought for other reliefs.

2. Learned counsel for the petitioner submits that

the present Show Cause Notice is an attempt to re-open the

proceedings at an earlier point of time, which has attained

finality.

3. It is pointed out that at the first instance, the

Show Cause Notice came to be issued on 11.12.2013 in

respect of importing of goods without a duty saved amount

claimed vide Bill of Entry No.117303 dated 15.03.2006

seeking availing of duty exemption under EPCG Licence

No.0730002525 dated 07.02.2005 issued by JDGFT (Joint

Director General of Foreign Trade), Bengaluru. As regards

the said Show Cause Notice, the order in original

No.277/2015 came to be passed on 20.03.2015, whereby

confiscation of the goods valued at Rs.1,33,63,108/- was

ordered. Said order was taken up in an appeal before the

Commissioner of Customs (Appeals) in Appeal No.45/2016

and the said appeal was allowed on 11.02.2016, setting

aside the demand of customs duties and imposition of

redemption fine in lieu of confiscation of imported goods and

the petitioner herein was declared as being entitled to all

consequential benefits.

4. The relevant finding at paragraph No.5 of Appeal

No.45/2016 is as follows;

"5. I have examined the facts of the case, the grounds of appeal along with the written and oral submissions made by the appellants and the relied upon the documents in support of their contention. The appellants were issued with demand notices for failure to produce the EODCs even after the expiry of specified period and the demand of customs duties was confirmed by the original adjudicating authority. The Assistant Director General Foreign Trade/Foreign Trade Development Officer on behalf of the Licensing

Authority in terms of Redemption Letter dated 25.02.2015 has confirmed that the export obligations in respect of Advance EPCG Authorization License No.0730002525 dated 07.02.2005, respectively have been met in full and redeemed in terms of Para No.4.26 of the Handbook of Procedure 2004-09. I have perused the dated EODC and am satisfied that the conditions laid down in Customs Notification No.97/2004-Cus dated 17.09.2004 have been fulfilled by the appellant/importer."

5. The appellate authority had taken note of the

EODC (Export Obligation Discharge Certificate) and has

recorded satisfaction of the conditions laid down in the

Customs Notification No.97/2004-Cus dated 17.09.2004.

6. It is submitted that the proceedings of the

appellate authority for all practical purpose has attained

finality and in respect of the subject matter of the earlier

proceedings, the present Show Cause Notice at Annexure-J

dated 13.03.2018 has been issued.

7. A perusal of the Show Cause Notice would reveal

that the Show Cause Notice is issued as regard to the

exemption claimed by the petitioner which was upheld in the

earlier round of proceedings relating to the EPCG Licence

No.0730002525 dated 07.02.2005. It is also relevant to

note that the earlier proceedings is related to Bill of Entry

No.117303 dated 15.03.2006 and with respect to duty saved

amount of Rs.42,27,591/- as is referred to in paragraph

No.3 of the Show Cause Notice at Annexure-C dated

11.12.2013, which again is a subject matter of the present

Show Cause Notice at Annexure-J dated 13.03.2018.

Paragraph No.3 of the present Show Cause Notice dated

11.12.2013 and paragraph No.2 of the Show Cause Notice

dated 13.03.2018 are extracted below for the purpose of

convenience.

"3. Whereas it appears that the Licensee had imported goods with a duty saved amount of Rs.42,27,591/- vide bill of entry no.117303 dt15.03.2006 availing duty exemption under the subject EPCG Licence and had not submitted

either the installation certificate or the evidence for block wise fulfillment of export obligation till date, thereby, the Licensee have contravened the conditions laid out in the said notification."

2. M/s PG had imported one "Heidelberg Printmaster Model PM 52-4 Four Colour Offset Press with Standard Accessories" vide Bill of Entry No.117303 dated 15.03.2006 by utilising the EPCG Licence (Authorisation) No.0730002525 dated 07.02.2005 by availing concessional rate of Customs Duty in terms of Customs Notification No.97/2004-Cus. dated 17.09.2004 read with Foreign Trade Policy 2004-2009. The total amount of Customs duty forgone on account of the said import was Rs.42,27,591/-."

8. It is not in dispute that the Show Cause Notice at

Annexure-J dated 13.03.2018 has been issued by the

Additional Director, Directorate of Revenue Intelligence.

9. Learned counsel for the petitioner submits that in

light of the judgment of the Hon'ble Apex Court in the case

of Canon India Pvt. Ltd. Vs. Commissioner of Customs

reported in 2021 SCC Online SC 200, wherein, the

Hon'ble Apex Court has categorically declared that a Notice

must be issued by a proper Officer and that the Show Cause

Notice issued by the DRI Officer would not be valid as the

very entrustment of office functions to DRI not having been

done by the Central Government under Section 6 of the

Customs Act, 1962. The entrustment of functions under a

Notification issued under Section 2(34) was invalid.

Accordingly, it is submitted that the Show Cause Notice at

Annexure-J is non-est as being a notice issued by an officer

not authorised and accordingly, the Show Cause Notice is

not issued by the proper Officer as required under law in

terms of the judgment of the Hon'ble Apex Court stated

supra. It is submitted that this argument is apart from the

contention that the proceedings that have been culminated

in passing of the order in Appeal No.45/2016 dated

11.02.2016 having attained finality, any effort is made to re-

open the said order including re-opening of the Assessment

Order, the same is required to be done by the same Officer

i.e., an Officer holding the same designation and reliance is

placed on the observations of the Hon'ble Apex Court in

M/s.Canon India Pvt. Ltd., case, which has considered the

said aspect at paragraph No.14 which reads as follows;

"14. It is well known that when a statute directs that the things be done in a certain way, it must be done in that way alone. As in this case, when the statute directs that "the proper officer" can determine duty not levied/not paid, it does not mean any proper officer but that proper officer alone. We find it completely impermissible to allow an officer, who has not passed the original order of assessment, to re- open the assessment on the grounds that the duty was not paid/not levied, by the original officer who had decided to clear the goods and who was competent and authorised to make the assessment. The nature of the power conferred by Section 28 (4) to recover duties which have escaped assessment 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 re-assessment [which is involved in Section 28 (4)].

10. Accordingly, it is submitted that the Show Cause

Notice at Annexure-J is bad on the ground that the

proceedings earlier which have attained finality are sought to

be re-opened by virtue of a Show Cause Notice issued by the

Officer of DRI which is impermissible.

11. Learned counsel Sri Amith Deshpande appearing

for the respondents submits that the judgment in M/s.Canon

India Pvt. Ltd. is pending in review and that an appeal

against the judgment in W.P.No.10773/2018 by the Co-

ordinate Bench is also pending. Upon clarification, it is

pointed out that no order has been passed in the review by

the Hon'ble Apex Court so also there is no order of stay