Only customs officers assigned assessment and re-assessment under Section 2(34) can issue Section 28 show-cause notices

SC held that only customs officers specifically assigned assessment and re-assessment functions for the relevant jurisdiction under Section 2(34) may issue show-cause notices under Section 28. The court rejected the Revenue's contention that territorial assignment to a Preventive Collector alone makes them a "proper officer," finding that such a view would render Section 2(34) otiose and create confusion by broadening proper officers to all local customs staff. Consequently, jurisdiction to issue Section 28 notices is limited to officers of the collectorate who actually perform assessment/re-assessment where the entry or baggage was filed and cleared.

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Issues Involved:
1. Jurisdiction of the Commissioner of Customs (Preventive) to issue show cause notices under Section 28 of the Customs Act, 1962.
2. Definition and scope of "proper officer" under Section 2(34) of the Customs Act, 1962.
3. Validity of demands raised by virtue of re-assessment orders passed by the Commissioner of Customs (Preventive).

Detailed Analysis:

1. Jurisdiction of the Commissioner of Customs (Preventive):
The core issue in these appeals is whether the Commissioner of Customs (Preventive), Mumbai, had the jurisdiction to issue show cause notices under Section 28 of the Customs Act, 1962. The Customs, Excise & Gold (Control) Appellate Tribunal (CEGAT) and the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) delivered conflicting judgments on this matter. The CEGAT held that the Commissioner of Customs (Preventive) was not a "proper officer" as defined in Section 2(34) and thus lacked jurisdiction. Conversely, the CESTAT upheld the jurisdiction of the Commissioner of Customs (Preventive) to issue such notices.

2. Definition and Scope of "Proper Officer":
Section 2(34) of the Customs Act defines a "proper officer" as an officer of customs who is assigned specific functions by the Board or the Commissioner of Customs. The Supreme Court emphasized that only officers who have been specifically assigned the functions of assessment and re-assessment of duty in the jurisdictional area where the import has occurred can be considered "proper officers" under Section 28. The mere appointment of a person as an officer of customs with territorial jurisdiction does not automatically confer the authority to exercise statutory powers entrusted to proper officers.

3. Validity of Demands Raised by Re-assessment Orders:
The Supreme Court examined whether the demands raised by the Commissioner of Customs (Preventive) through re-assessment orders were valid. The Court held that the Commissioner of Customs (Preventive) was not a "proper officer" within the meaning of Section 2(34) and thus was not competent to issue show cause notices for re-assessment under Section 28. The Court noted that the import manifest and bill of entry were filed before the Collectorate of Customs (Imports), Mumbai, and assessed by the proper officer, making the Commissioner of Customs (Preventive) unauthorized to issue such notices.

Conclusion:
The Supreme Court concluded that the Commissioner of Customs (Preventive) did not have the jurisdiction to issue show cause notices under Section 28 of the Customs Act, 1962, as he was not a "proper officer" within the meaning of Section 2(34). Consequently, the demands raised by re-assessment orders issued by the Commissioner of Customs (Preventive) were invalid. The appeals by the revenue were dismissed, while the appeals by the importers were allowed. The judgment clarified that the revenue could initiate proceedings against the importers for recovery of duty and other charges if permissible under the Act. No order as to costs was made.

Note:
This summary preserves the legal terminology and significant phrases from the original text, ensuring a thorough and detailed analysis of the judgment.

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