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2024 Supreme(Online)(MAD) 41773
HIGH COURT OF MADRAS
MR.JUSTICE RMT.TEEKAA RAMAN, MR.JUSTICE N.SENTHILKUMAR, JJ
SHRI.DEEPAK BAJAJ – Appellant
Versus
THE COMMISSIONER OF CUSTOMS – Respondent
W.A.(MD)No.376 of 2019 and C.M.P(MD)No.3330 of 2019
Mr.A.Hari Radhakrishnan for Appellant, Mr.R.Baskaran Additional Advocate General-VI assisted by Mr.G.Suriyananth Additional Government Pleader for Respondent
The jurisdiction of the Directorate of Revenue Intelligence to issue show cause notices is subject to appeal to the Customs Excise and Service Tax Appellate Tribunal as per Supreme Court directives.
Headnote:(A) Customs Act, 1962 - Section 114A and 112(a) - Writ Appeal against order of Single Judge - Appellant challenged jurisdiction of DRI to issue show cause notice - Supreme Court held that High Courts must grant time for appeal to CESTAT when jurisdiction is questioned - Appeal dismissed with liberty to approach CESTAT within eight weeks. (Paras 3, 4, 5)
(B) Jurisdiction - The authority of DRI to issue show cause notices was questioned, leading to the necessity of appealing to the appropriate appellate authority as per Supreme Court's directive. (Para 4)
Facts of the case:
The appellant was accused of diverting duty-free imported textile fabrics into the local market instead of manufacturing and exporting them, leading to show cause notices and penalties under the Customs Act.
Findings of Court:
The court found no merit in the appeal and directed the appellant to approach CESTAT as per the Supreme Court's ruling.
Issues: The main issue was the jurisdiction of the DRI to issue show cause notices and the appropriate appellate authority for the appellant's challenge.
Ratio Decidendi: The court emphasized the necessity of following the Supreme Court's directive regarding the appeal process to CESTAT when jurisdiction is contested.
Result: Writ Appeal dismissed.
JUDGMENT
[Judgment of the Court was made by RMT.TEEKAA RAMAN, J.]
This Writ Appeal is filed against the order passed by this Court in W.P.(MD)No.20021 of 2018, dated 13.12.2018.
2.The unsuccessful petitioner is the appellant herein. The Department of Revenue Intelligence, (DRI) Mumbai, had initiated an investigation against M/s.Suvidh Overseas with respect to the import of textile fabrics duty-free. The allegation of the DRI is that the textile fabrics were cleared using the DEEC license, which has an 'Actual User' condition and instead of manufacturing and exporting, the same were diverted locally into the Indian market. Accordingly, the DRI had issued a show cause notice dated 18.05.2007 to M/s. Suvidh Overseas, the appellant and other notices proposing to confiscate the seized goods. The DRI had issued another show cause notice dated 24.10.2008 proposing to demand customs duty jointly and severally from M/s.Suvidh Overseas, Shri. Kuresh T. Rajkotwala and the appellant. The said notice further proposed to impose a penalty on the appellant and other notices. However, the respondent has passed the impugned order-in-original, demanding duty and imposing penalty under Section 114A of the Customs Act, 1962 . Subsequently, the respondent has issued a corrigendum dated 30.05.2018 wherein, he changed the Section for imposing penalties from 114A to 112(a) of the . The appellant filed W.P. (MD)No.20021 of 2018, before this Court challenging the impugned order dated 23.03.2018 on the ground that the officers of the Directorate of Revenue Intelligence (DRI) have no jurisdiction to issue show cause notice. The learned Single Judge, vide order dated 13.12.2018 disposed of the said writ petition on the ground that the appellant had not challenged the virus or validity of Section 28(11) of the Customs Act 1962 and further directed the appellant to file a statutory appeal. Aggrieved by the said order, dated 13.12.2018, the present writ appeal is being filed.
3.Pending the writ appeal, the Hon'ble Supreme Court of India in the case of Commissioner of Customs Vs. M/s Canon India Private Limited [Review Petition No.400 of 2021, dated 07.11.2024], at para 168 in clause No.(vi)(c), has held that “Where the orders-in-original passed by the adjudicating authority under Section 28 have been challenged before the High Courts on the ground of maintainability due to lack of jurisdiction of the proper officer to issue show cause notices, the respective High Court shall grant eight weeks' time to the respective assessee to prefer appropriate appeal before the Customs Excise and Service Tax Appellate Tribunal (CESTAT).”
4.In view of the decision of the Hon'ble Apex Court, now the validity of the action of the DRI in issue show cause notice being appealed, the appellant has to approach the appellate authority namely, the CESTAT Act. Hence, in view of the Judgment of the Hon'ble Supreme Court of India, we find that there is no merit in continuing the case and as directed by the Hon'ble Supreme Court of India. 5.With the above observations, this Writ Appeal is dismissed with liberty to the appellant to approach the said CESTAT Act, within a period of eight weeks as contained in the above clause, from the date of receipt of a copy of this order. No costs. Consequently, connected miscellaneous petition is closed.
[T.K.R., J.] [N.S., J.]
19.11.2024
