2006 (6) TMI 502 - HC - Customs

Authority to Issue Show Cause Notice Under Customs Act Upheld

The court held that the Assistant Director, Directorate of Revenue Intelligence (DIR), Mumbai was competent to issue the Show Cause Notice under the ... Competence to issue show cause notice - jurisdiction of Directorate of Revenue Intelligence officers as Proper Officer - notification appointing Assistant Director, DRI as Proper Officer - application of Larger Bench decision of the TribunalCompetence to issue show cause notice - jurisdiction of Directorate of Revenue Intelligence officers as Proper Officer - notification appointing Assistant Director, DRI as Proper Officer - Assistant Director, Directorate of Revenue Intelligence was competent to issue the show cause notice dated 29/03/1993 under Sections 28 and 124 of the Customs Act, 1962. - HELD THAT: - The Court examined the Tribunal's Larger Bench decision in Konia Trading Co. which held that officers of the Directorate of Revenue Intelligence, when appointed by the Central Government, have jurisdiction to act as a Proper Officer in matters where Customs Officers are notified as Proper Officer. The Court noted the Notification No.19/89-Cus.(NT) dated 26th April, 1990 wherein the Assistant Director, DRI is notified to be the Proper Officer for the relevant territories. Applying the Larger Bench view and the notification, the Court concluded that the Assistant Director, DRI had the statutory competence to issue the impugned show cause notice under the cited provisions of the Customs Act. The Court rejected reliance on earlier contrary Tribunal orders cited in the impugned decision in view of the subsequent Larger Bench ruling in Konia Trading Co. . [Paras 4]Question answered in favour of the revenue and against the assessee: the Assistant Director, DRI was competent to issue the show cause notice dated 29/03/1993.Final Conclusion: Appeal allowed; the impugned order is quashed and set aside with no order as to costs. Issues: Competence of Assistant Director, Directorate of Revenue Intelligence to issue Show Cause Notice under Customs Act, 1962Analysis:The main issue in this case was whether the Assistant Director, Directorate of Revenue Intelligence (DIR), Mumbai was competent to issue the Show Cause Notice dated 29/03/1993 under Sections 28 and 124 of the Customs Act, 1962. The appellant's counsel argued that the Tribunal had relied on previous orders that were no longer valid in light of a subsequent Larger Bench judgment in the case of Konia Trading Co. The Larger Bench had held that officers of DRI appointed by the Central Government had the jurisdiction to act as a 'Proper Officer' in matters where Customs Officers were notified as such. The counsel also pointed out Notification No.19/89-Cus. (NT) dated 26th April, 1990, which designated the Assistant Director, DRI as the Proper Officer for certain regions in India.The court, after considering the legal submissions and the Larger Bench's judgment in the Konia Trading Co. case, agreed with the appellant's arguments. The court held that the Assistant Commissioner, Director of Revenue Intelligence (DRI) was indeed competent to issue the show cause notice under Sections 28 and 124 of the Customs Act, 1962. As a result, the court answered the main question in favor of the revenue and against the assessee, thereby allowing the appeal and quashing the impugned order with no order as to costs.Additionally, the court mentioned that the other two questions framed during the admission of the appeal did not require specific answers as they were deemed consequential in nature. This comprehensive analysis of the competence of the Assistant Director, Directorate of Revenue Intelligence to issue a Show Cause Notice under the Customs Act, 1962 highlights the legal arguments, relevant case law, and the final judgment of the Bombay High Court in this matter.