Validity of Customs Act Section 28(11) upheld, jurisdiction affirmed for show-cause notice issuance. Petitioner advised to present case.

The court upheld the validity of Section 28(11) of the Customs Act, 1962, rejecting the petitioner's challenge. It affirmed the jurisdiction of the Additional Director General to issue the show-cause notice, directing the petitioner to respond before the concerned Commissioner for adjudication. The court dismissed the writ petitions and advised the petitioner to present their case for adjudication, while also dismissing the interlocutory application for stay.

---

---

Issues Involved:
1. Validity of the provisions of Section 28(11) of the Customs Act, 1962.
2. Jurisdiction of the Additional Director General, Directorate Revenue Intelligence to issue the show-cause notice.

Detailed Analysis:

Validity of Section 28(11) of the Customs Act, 1962:

The petitioner challenged the provisions of sub-section (11) of Section 28 of the Customs Act, 1962, inserted by the Customs (Amendment & Validation) Act, 2011, with effect from 16.9.2011. The petitioner argued that the amendment did not address the defect highlighted by the Supreme Court in the case of Commissioner of Customs Vs. Sayed Ali, where it was held that only officers of customs assigned the functions of assessment within the jurisdictional Collectorate have the power to issue notices under Section 28 of the Act. The petitioner contended that the provision was ultra vires and lacked guidelines for the exercise of assessment powers by multiple authorities in the Intelligence Wing.

The court, however, found no illegality or lack of legislative competence in the provisions of Section 28(11). It noted that the legislative amendment was necessary to prevent the quashing of proceedings due to lack of jurisdiction, as highlighted in the Sayed Ali case. The court emphasized that the amendment aimed to save the enquiry, investigation, and assessment proceedings to prevent customs duty evasion. The provision was deemed to be in consonance with the legislative objects and the scheme of the Act, and not arbitrary or unguided. The court concluded that the amendment was appropriate and essential for the smooth functioning and discharge of duties by the authorities, and therefore, the contention of the petitioner was rejected.

Jurisdiction of the Additional Director General to Issue the Show-Cause Notice:

The petitioner also challenged the jurisdiction of the Additional Director General, Directorate Revenue Intelligence, to issue the show-cause notice. The petitioner argued that the authorities in the Intelligence Wing do not have assessment powers under the Customs Act, as per the Supreme Court's decision in Sayed Ali’s case.

The court noted that to counter the effect of the Sayed Ali judgment, sub-section (11) was inserted in Section 28 of the Act, conferring assessment powers on all persons appointed as Officers of Customs under Section 4(1) of the Act. The court referred to notifications issued by the Central Government, which appointed officers of the Directorate General of Central Excise Intelligence and Directorate of Revenue Intelligence as Customs officers with All India jurisdiction. The court found that the assessment proceedings would be undertaken by the concerned Officer having territorial jurisdiction over the place of import, such as the Principal Commissioner of Customs, Bangalore in this case.

The court concluded that the officers specified in the notifications had the jurisdiction to issue the show-cause notice, and the petitioner's challenge on the grounds of lack of jurisdiction was premature. The petitioner was directed to respond to the show-cause notice before the concerned Commissioner, who would adjudicate the matter in accordance with law and principles of natural justice.

Conclusion:

The court dismissed the writ petitions, upholding the validity of Section 28(11) of the Customs Act, 1962, and confirming the jurisdiction of the Additional Director General to issue the show-cause notice. The petitioner was advised to present their case before the Principal Commissioner/Commissioner of Customs, Bangalore, for adjudication. The court also dismissed the interlocutory application for stay.

---