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2011 (2) Supreme 153
SUPREME COURT OF INDIA
D.K. Jain, and H.L. Dattu, JJ.
Commissioner of Customs — Appellant
versus
Sayed Ali & Anr. — Respondents
Civil Appeal Nos. 4294-4295 of 2002
with
[Civil Appeal Nos.4603-4604 of 2005]
Decided on : 18-2-2011
Facts of the Case :
Present Appeals have been filed against orders passed by CEGAT and CESTAT respectively- In the first set of appeals CEGAT had held that Commissioner of Customs (Preventive), Mumbai, not being a “proper officer” as defined in Section 2(34) of the Act, did not have jurisdiction to issue show cause notice in terms of Section 28 of the Act. However, in the second set of appeals , the CESTAT to the contrary, held that Commissioner of Customs (Preventive), Mumbai had jurisdiction to issue notice under Section 28 of the Act.
Findings of the Court :
From a conjoint reading of Sections 2(34) and 28 of the Act, it is manifest that only such a customs officer who has been assigned specific functions of assessment and re-assessment of duty in jurisdictional area where the import concerned had been affected, by either the Board or the Commissioner of Customs, in terms of Section 2(34) of the Act is competent to issue notice under Section 28 of the Act- Any other reading of Section 28 would render provisions of Section 2(34) of the Act otiose in as much as the test contemplated under Section 2(34) of the Act is that of specific conferment of such functions. Moreover, if the Revenue’s contention that once territorial jurisdiction was conferred, the Collector of Customs (Preventive) becomes a “proper officer” in terms of Section 28 of the Act was 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”. Hence held that , it was only the officers of customs, who were assigned functions of assessment, which of course, included re- assessment, working under the jurisdictional Collectorate within whose jurisdiction the bills of entry or baggage declarations had been filed and the consignments had been cleared for home consumption, would have jurisdiction to issue notice under Section 28 of Act.Instantly import manifest and the bill of entry having been filed before the Collectorate of Customs (Imports) Mumbai, the same having been assessed and clearance for home consumption having been allowed by the proper officer on importers executing bond, undertaking obligation of export, the Collector of Customs (Preventive), not being a “proper officer” within the meaning of Section 2(34) of the Act, was not competent to issue show cause notice for re-assessment under Section 28 of the Act. Nothing had been brought on record to show that Collector of Customs (Preventive), who had issued the show cause notices was assigned the functions under Section 28 of the Act as “proper officer” either by Board or Collector/Commissioner of Customs.No merit being found in the stand of revenue ,its appeal was held liable to be dismissed.
JUDGMENT
D.K. Jain, J. —
1. Challenge in these civil appeals, filed under Section 130E of the Customs Act, 1962 (for short “the Act”), is to the orders dated 1st October, 2001 and 4th January, 2005 passed by the Customs, Excise & Gold (Control) Appellate Tribunal (for short “the CEGAT”) and the Customs, Excise & Service Tax Appellate Tribunal (for short “the CESTAT”) respectively. In the first set of appeals (Nos. 4294-4295 of 2002), the CEGAT has held that the Commissioner of Customs (Preventive), Mumbai, not being a “proper officer” as defined in Section 2(34) of the Act, did not have jurisdiction to issue show cause notice in terms of Section 28 of the Act. However, in the second set of appeals (Nos. 4603-4604 of 2005), the CESTAT has, to the contrary, held that the Commissioner of Customs (Preventive), Mumbai had jurisdiction to issue notice under Section 28 of the Act.
2. Since the question of law arising in all the appeals is similar, these are being disposed of by this common judgment. However, to appreciate the controversy, facts in C.A. Nos. 4294-4295 of 2002 are adverted to. These are:
Respondent No. 1 is a partner in respondent No. 2 firm viz. M/s. Handloom Carpet, which is engaged in the business of carpet manufacture/export. Respondent No. 2 was charged with misusing the Export Pass Book scheme by selling goods cleared duty free in the open market or selling the pass book on premium in violation of the ITC restriction imposed on such sale. Investigations in the matter were conducted by the Marine and Preventive Wing of the Customs. On 28th August, 1991, the Assistant Collector of Customs (Preventive), Mumbai, issued to the respondents a show cause notice, alleging violation of the provisions of Section 111(d) of the Act. On 3rd February, 1993, the same officer adjudicated upon the said show cause notice, confirming the demands raised in the show cause notice.
3. Being aggrieved, the respondents preferred an appeal before the Collector of Customs (Appeals), who vide order dated 14th December, 1993, allowed the appeal holding that since the matter involved demand of duty beyond a period of six months, the show cause notice was required to be issued by the Collector, and not by the Assistant Collector. Nevertheless, the Collector (Appeals) granted liberty to the department to re-adjudicate the case by issuing a proper show cause notice.
4. Accordingly, the Collector of Customs (Preventive) issued show cause notice dated 16th April, 1994 asking the respondents to show cause as to why the goods under seizure valued at ‘1,04,118.52/- should not be confiscated, and customs duty amounting to ‘5,07,274/- be not levied in terms of Section 28(1) of the Act, by invoking the extended period of limitation. Penalties under Sections 112(a) and (b)(i) and (ii) of the Act were also proposed.
5. In reply to the show cause notice, the jurisdiction of the Collector of Customs (Preventive) was questioned on the ground that the jurisdiction of a Commissioner by virtue of Notification No. 251/83 being more specific and limited in nature, the said notification will prevail over Notification No.250/83. Vide order dated 19th August, 1996, the Collector of Customs (Preventive) rejected the objections regarding his jurisdiction, holding thus:
“It is not disputed by the parties that by virtue of notification No. 250/83 the commissioner of customs (preventive) Mumbai is appointed as Commissioner of Customs in the areas comprising Districts of Mumbai, Thane and Kolaba and a concurrent jurisdiction is thus vested in respect of Mumbai port also. What is being contended is that the jurisdiction of commissioner of customs, Mumbai under Notification No. 251/83 is more specific and limited. In this regard it is relevant to refer to the definition of smuggling under the provisions of customs Act, 1962. Under the Act Smuggling is defined as any act or omission which renders the goods to confiscation under the provisions of the Act. In this case M/s ha
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