2016 (11) TMI 557 - HC - Customs

HC dismisses petition challenging SCN on imported blank CDs, upholding finality under the doctrine of merger

The HC dismissed the petition challenging the SCN dated 30-07-2009 regarding classification and exemption of imported blank CDs. The SCN had culminated in ... Challenge to the show cause notice (SCN) - Classification of imported goods - blank C.Ds - classified under Ch.Sh.No.85238020 or under Ch.Sh.No.85234090 - whether the benefit of exemption claimed under Notification No.6/2016-CE, dated 01-03-2016 should be denied? - Held that: - The show cause notice dated 30-07- 2009, which is under challenge in the present writ petition, is no longer in force. The show cause notice has already culminated in a Order of adjudication and the order of adjudication has also been confirmed by the Tribunal, the High Court and the Supreme Court. The doctrine of merger has come into play and the show cause notice is not available any more for the petitioner to challenge - It is not the case of the petitioner that they challenged either the impugned show cause notice or the Order-in-Original at the relevant point of time on the ground that the show cause notice was issued by a person not assigned the role of a proper officer. The petitioner had challenged the show cause notice and the order of adjudication on other grounds, which stand rejected up to Supreme Court. Therefore, the principle of finality to litigation would put a seal on the present attempt on the part of the petitioner to reopen the issue all over again. Petition dismissed. Issues:Challenge to initiation of proceedings based on show cause notice validity.Analysis:The petitioner challenged the initiation of proceedings through a show cause notice issued by the Additional Director General, arguing that the officer was not a proper officer. The petitioner relied on a Delhi High Court judgment in Mangali Impex Ltd., which questioned the constitutional validity of Section 28(11) of the Customs Act, 1962. This section deems all persons appointed as Customs Officers before 6th July, 2011, to have the power of assessment under Section 17. The Delhi High Court held that officers not specifically assigned as proper officers could not exercise certain powers. However, the High Court noted that the 2011 Amendment was a response to a Supreme Court decision, Commissioner of Customs v. Sayed Ali, which required specific assignment of proper officer functions. The petitioner argued that the entire proceedings were flawed due to the officer not being a proper officer.The High Court examined the petitioner's submissions and found the writ petition to be not maintainable. The show cause notice had already led to an Order of adjudication confirmed by various authorities, invoking the doctrine of merger. The petitioner relied on judgments from the Delhi High Court and the Punjab & Haryana High Court that set aside show cause notices even after final orders. However, the High Court emphasized the doctrine of merger, stating that there cannot be more than one decree. Setting aside the show cause notice would nullify previous orders and judgments, creating legal chaos. The High Court also highlighted the principle of finality in litigation, noting that the petitioner did not challenge the notice or order on the grounds of the officer's role initially. Therefore, the attempt to reopen the issue was deemed without merit, and the writ petition was dismissed.In conclusion, the High Court dismissed the writ petition, emphasizing the importance of finality in legal proceedings and the potential repercussions of setting aside the show cause notice at this stage. The court found the petitioner's arguments lacking in merit and highlighted the need to respect the hierarchy of justice delivery systems. The judgment underscores the significance of legal doctrines such as merger and finality in maintaining the integrity of judicial decisions.