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IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD
SURYA PRAKASH KESARWANI, ASHUTOSH SRIVASTAVA, JJ.
M/s Sultan Tanneries and Leather Products – Petitioner
Versus
Union of India and Others – Respondents
Writ Tax Nos. 1085, 1092, 1096 of 2021
Decided On : 07-04-2022
Central Goods and Service Act, 2017 - Customs Act, 1962 - Section 4(1) - Nature of Mandamus – Consignments - Quash show-cause notice - Challenge raised in this writ petition is to jurisdiction of Commissioner, CGST and Central Excise Respondent No. 4 to adjudicate show-cause notice issued by Commissioner of Customs Customs House Maharashtra Respondent No. 2 Customs Act, 1962 - Challenge is based on premise that Respondent No. 4 is neither a proper officer nor is competent to pass any order under Customs Act, 1962 in as much as Respondent No. 4 was merely assigned jurisdiction by order of Board and cannot therefore be an officer appointed -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 - Exercise of cross-examination commences only after the proceedings for adjudication have commenced – Para 34.
Finding of the Court: Apex Court in case of Commissioner of Customs has held that it is only officers of Customs who are assigned functions of assessment working jurisdiction of Collectorate/Commissionerate within whose jurisdiction Bills of entry or baggage declaration had been made and consignment having been cleared will have jurisdiction to issue notice Section 28 of Act - In said case assessee who was engaged in business of carpet manufacturing and export was charged with misuse of Export Pass Book Scheme by selling goods cleared duty free in open market or selling pass book in premium in violation of restrictions imposed on such sale - Investigation was conducted by Marine and Preventive Wing of Customs and Assistant Collector of Customs issued show-cause notice alleging violations of provisions of Section 111(d) of Customs Act - At an appellate stage Collector though set aside order passed by Assistant Collector granted liberty to Department to re-adjudicate case after issuing proper show-cause notice.
Result: Writ Petition dismissed.
JUDGMENT :
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 a
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, ar....
The central legal point established in the judgment is that DRI officers are not proper officers under the Customs Act, and their show cause notices lack jurisdiction and are ab initio void, as estab....
The amendment to the Customs Act validating the authority of customs officers appointed before July 6, 2011 is constitutionally permissible and retroactively applies to prior adjudications.
Point of Law : Though appointed (clearly with reference to section 4 of the Act, no function came to be entrusted to them under the Customs Act, in absence of any sub-delegation made in their favour ....
Point of Law : 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.
DRI officers are designated as proper officers under the Customs Act, enabling them to issue show cause notices under Section 28, overruling previous judgments that restricted their authority.
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