Customs adjudication power must match the allegation and rank prescribed; notice issued without competence was quashed.

A show cause notice for alleged misclassification and duty evasion was held unsustainable because the governing customs circular allocated adjudicatory power by the nature of the allegation and the monetary limit. Since the notice alleged knowing misclassification to avoid duty, the matter fell within the category requiring action by an authority not below the rank of Additional or Joint Commissioner, and not by a lower-ranking officer. The notice was therefore issued without proper competence and was quashed, while fresh proceedings before the competent authority were left open.

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Issues: Whether the show cause notice could be sustained when it was issued by an authority allegedly below the rank prescribed for adjudication under the applicable customs circular.

Analysis: The governing circular distinguished between cases of simple erroneous drawback demand and cases involving collusion, willful misstatement, or suppression of facts. The notice itself disclosed allegations that the petitioner had knowingly misclassified goods to avoid duty, which brought the matter within the latter category. In such cases, adjudicatory power was vested in an authority not below the rank of Additional or Joint Commissioner of Customs, and the amount involved was beyond the limit assigned to a Deputy or Assistant Commissioner. The notice was therefore issued without proper authority.

Conclusion: The show cause notice was unsustainable for want of competence in the issuing authority and was quashed.

Final Conclusion: The petition was allowed and the impugned notice was set aside, leaving the respondents free to initiate fresh proceedings before the competent authority.

Ratio Decidendi: Where the governing circular allocates adjudicatory power according to the nature of the allegation and the monetary limit, a notice issued by an authority lacking the prescribed rank is invalid.

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