Tribunal deems show cause notice lacking jurisdiction, renders subsequent proceedings invalid.

The Tribunal allowed the assessee's appeals and dismissed the Department's appeal, holding that the show cause notice issued by the Principal Additional Director General, DRI lacked jurisdiction, rendering subsequent proceedings invalid. The Tribunal deemed the order passed by the Principal Commissioner unsustainable and did not delve into the appeal's merits due to the jurisdictional flaw.

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Issues Involved:
1. Jurisdiction of the Principal Additional Director General, DRI to issue the show cause notice under Section 28 of the Customs Act.
2. Validity of the proceedings initiated by the Principal Additional Director General, DRI.
3. Relevance of the Supreme Court's decisions in Canon India Pvt. Ltd. vs. Commissioner of Customs and Commissioner of Customs, Kandla vs. M/s. Agarwal Metals and Alloys.
4. Impact of pending review petition against the Supreme Court's decision in Canon India on the current proceedings.

Detailed Analysis:

Jurisdiction of the Principal Additional Director General, DRI:
The core issue was whether the Principal Additional Director General, DRI had the jurisdiction to issue the show cause notice under Section 28 of the Customs Act. The appellant's counsel argued that the Principal Additional Director General, DRI was not the "proper officer" under Section 28, as established by the Supreme Court in Canon India Pvt. Ltd. vs. Commissioner of Customs and Commissioner of Customs, Kandla vs. M/s. Agarwal Metals and Alloys. The Supreme Court had clarified that the power to recover duty not paid or short paid after assessment and clearance is conferred on the officer who initially assessed and cleared the goods.

Validity of the Proceedings Initiated by the Principal Additional Director General, DRI:
The Tribunal noted that the Supreme Court in Canon India had unequivocally held that the proceedings initiated by the Additional Director General, DRI were without any authority of law and thus invalid. The Supreme Court emphasized that the "proper officer" under Section 28 must be the one who initially assessed and cleared the goods or his successor, not an officer from another department.

Relevance of Supreme Court's Decisions:
The Tribunal extensively referred to the Supreme Court's decisions in Canon India and Agarwal Metals and Alloys. The Supreme Court had observed that the power to re-assess or recover duties is an administrative review power conferred on the same officer who made the initial assessment. The Tribunal also cited various High Court decisions, including those from the Bombay, Madras, Karnataka, and Punjab and Haryana High Courts, which followed the Supreme Court's reasoning in Canon India to set aside proceedings initiated by the DRI.

Impact of Pending Review Petition:
The Department's representative suggested deferring the hearing until the review petition against the Canon India judgment was decided. However, the Tribunal rejected this submission, referencing the Karnataka High Court's decision in Mohan C. Suvarna, which dismissed a similar plea. The Tribunal concluded that pending review petitions do not affect the binding nature of the Supreme Court's decisions.

Conclusion:
The Tribunal allowed the appeals filed by the assessee (Customs Appeal No. 50948 of 2020 and 50949 of 2020) and dismissed the appeal filed by the Department (Customs Appeal No. 51136 of 2020). The Tribunal held that the show cause notice issued by the Principal Additional Director General, DRI was without jurisdiction, rendering all subsequent proceedings invalid. Consequently, the order dated May 29, 2020, passed by the Principal Commissioner was unsustainable. The Tribunal did not find it necessary to examine the merits of the appeal due to the jurisdictional issue.

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