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IN THE HIGH COURT OF DELHI AT NEW DELHI

%

Judgment delivered on:16.08.2023

+

W.P.(C) 6338/2021 & CM APPL. 19962/2021

SWATCH GROUP INDIA PVT LTD

& ORS.

..... Petitioners

versus

UNION OF INDIA & ORS.

..... Respondents

Advocates who appeared in this case:

For the Petitioners

: Mr. Sandeep Chilana, Mr. Prem Kandpal,

Mr. Snehil Sharma, Mr. Abdullah Tanveer,

Ms. Anjali Jain, Mr. Ashok Thakur & Ms.

Jagriti Rastogi, Advs.

For the Respondents

: Mr. Satish Kumar, Sr. SC with Mr. Dhruv

& Mr. Atri Mandal, Advs. for R2

Mr. Harpreet Singh, Sr. SC with Ms. Suhani

Mathur, Adv. for R3 & R4

CORAM

HON’BLE MR. JUSTICE VIBHU BAKHRU

HON’BLE MR. JUSTICE AMIT MAHAJAN

JUDGMENT

AMIT MAHAJAN, J

1.

The present writ petition has been filed, inter alia, praying for

quashing of the show cause notice bearing number F. No.

DRI/MZU/F/Int-40/2017 dated 14.02.2018 read with the Corrigendum

/ Addendum dated 28.02.2018 (impugned SCN) issued by respondent

No. 2/DRI.

Digitally Signed

By:HARMINDER KAUR

Signing Date:17.08.2023

11:12:43

Signature Not Verified

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2.

Petitioner No. 1 is an importer and an exclusive authorised

distributor of Swatch products, and distributes various brands of

luxury watches, accessories, etc. The watches and accessories are

imported by petitioner No. 1. Petitioner No. 2 and 3 are the Country

Manager cum Director and Chief Financial Officer, respectively, of

Petitioner No. 1.

3.

Respondent No. 2/DRI states that it received credible

information that Petitioner No. 1 is importing consignments of

branded watches of Swiss origin falling under Customs Tariff item

91021100/ 91021900, from different related overseas suppliers and is

resorting to mis-declaration of retail sale prices (“RSP”) to evade

payment of appropriate customs duty. It was alleged that watches

were notified for retail sale price-based assessment for payment of

CVD less abatement.

4.

It was alleged that certain authorised retailers of Petitioner No.

2 were changing the MRP. Searches were carried out by the officers

of Respondent No. 2 on 17.02.2017 at various premises of Petitioner

No. 1 and also at the premises of various retailers.

5.

Certain watches valued at ₹5,68,87,800/-were detained during

the search on 17.02.2017. During the pendency of the investigation,

the said watches were seized vide Seizure Memo dated 06.06.2017.

Watches worth ₹ 39,47,18,823/- detained from the premises of seven

retailers of petitioner No. 1 were also seized vide Seizure Memo dated

31.05.2017, 06.06.2017, 07.06.2017, and 29.06.2017.

6.

The investigation culminated in the issuance of the impugned

show cause notice dated 14.02.2018 and corrigendum dated

Digitally Signed

By:HARMINDER KAUR

Signing Date:17.08.2023

11:12:43

Signature Not Verified

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28.02.2018 under Sections 28 & 124 of the Customs Act, 1962

(hereafter ‘the Customs Act’), proposing recovery of custom duty of

₹38,94,832/- along with interest and penalty, confiscation of the seized

watches in terms of Section 111(d) and Section 111(m) of the

Customs Act and imposition of penalty under Section 112(b) of the

Customs Act. A penalty was also proposed under Section 112(a),

112(b), and Section 114AA of the Customs Act on the officials of

petitioner No. 1.

7.

It is an admitted that the show cause notice was not adjudicated

till the date of the filing of the present writ petition on 15.04.2021. The

present writ petition has been filed challenging the impugned show

cause notice on essentially two counts:

(i)

The respondent No. 2 is not a proper officer appointed under

Section 2(34) of the Customs Act for the assessment and re-

assessment of goods under Section 28 of the Customs Act.

Hence, the show cause notice has been issued without any

jurisdiction in the light of the judgment passed by the

Hon’ble Apex Court in the case of Canon India Private

Limited v. Comm