IMPORTANT POINT
The power to issue supplementary show cause notices was implicit and inbuilt in Section 124 of the Customs Act, 1962, prior to the insertion of the second proviso, and the notice dated 18.05.2017 was deemed an independent show cause notice related to new facts emerging after the issuance of the original notice.

JUDGMENT :

T.S. Sivagnanam, J.

1. This appeal filed by the Commissioner of Customs (Port), Kolkata under Section 130 of the Customs Act, 1962 is directed against the order dated 03.05.2023 passed by the Customs Excise and Service Tax Appellate Tribunal, East Zonal Bench, Kolkata (Tribunal) in Order No. 75314/2023. The appellant which shall be referred as the revenue has raised the following substantial questions of law for consideration:-

(i) Whether the Learned Tribunal has committed the gross error by setting aside the Supplementary Show Cause Notice issued on 18.05.2017 to the respondent holding that prior to insertion of second proviso to Section 124 of the Customs Act, 1962 w.e.f 29.03.2018 the supplementary Show Cause Notice is not legally sustainable?

(ii) Whether the supplementary Show Cause Notice issued on 18.05.2017 to the respondent in connection with Show Cause Notice on 26.08.2016 have any effect to the second proviso to Section 124 of the Customs Act, 1962 which is effective from 29.03.2018?

(iii) Whether the second proviso to Section 124 of the Customs Act, 1962 w.e.f 29.03.2018 is to be considered as retrospective or prospective?

(iv) Whether the supplementary Show Cause Notice dated 18.05.2017 can be treated as separate Show Cause Notice in terms of Section 124 of the Customs Act, 1962 as the same has been issued prior to insertion of second proviso to Section 124 of the Customs Act w.e.f 29.03.2018?

(v) Whether the Learned Tribunal has failed to appreciate the scope and context of the Customs (Supplementary Notice) Regulation, 2019 which was notified in exercise of the powers conferred by clause (f) of Sub-Section (2) of Section 157 read with second proviso to Section 124 of the Customs Act, 1962?

(vi) Whether the said Regulation of the Customs (Supplementary Notice) Regulation, 2019 can be operative without the aid of Section 157 of the Customs Act wherein 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 Enterprise. On enquiry it was found that another container belonging to the same syndicate which was exported against the IEC of M/s. Sayantika Enterprise had been detained by Hongkong Customs on 29.12.2015 and red sanders were seized from it. After conclusion of the investigation, show cause notice dated 26.08.2016 was issued to Sudhir Jha and five other persons under Section 124 of the Customs Act, 1962 (the Act) proposing confiscation of the seized goods and imposition of penalty. In the meantime, DRI commenced investigation regarding fraudulent availment of drawback on export of readymade garments to Bangladesh. Search and seizure operations were conducted at various places during which a DVD was recovered which contained several voice clips which were subsequently found to be conversation held between one Jyoti Biswas, a private person with Shri Vikas Kumar, Deputy Commissioner, Shri Sandeep K