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of <h1>Tribunal invalidates Show Cause Notice, grants relief to appellant</h1> <h3>M/s. Madurai Power Corporation Pvt. Ltd. and Shri I. Sivasubburaj Versus Commissioner of Customs, Tuticorin-</h3> The Tribunal set aside the impugned orders, emphasizing the invalidity of the Show Cause Notice issued by DRI and the lack of jurisdiction for such ... Jurisdiction - proper officer to issue SCN - DRI issued Show Cause Notice, valid or not - SCN proposed to recover the alleged short-paid customs duty invoking extended period in terms of proviso to section 28(1) of the Customs Act, 1962 - HELD THAT:- The Hon'ble jurisdictional High Court in the case of Quantum Coal Energy P. Ltd. [2021 (3) TMI 1034 - MADRAS HIGH COURT] has applied the decision of the Hon'ble Supreme Court in the case of Canon India Pvt. Ltd. Vs. Commissioner of Customs [2021 (3) TMI 384 - SUPREME COURT] to hold that the Show Cause Notice issued by DRI is invalid and the proceedings initiated cannot sustain - Applying the decision of the Hon'ble Supreme Court in Canon India Pvt. Ltd. the Tribunal held that the Show Cause Notice issued by DRI is invalid. The Show Cause Notice having been issued by DRI are ab initio void - Appeal allowed - decided in favor of appellant. Issues:- Validity of Show Cause Notice issued by DRI under section 28 of the Customs Act, 1962- Inclusion of facilitation charges in assessable value for customs duty- Proper officer for issuing Show Cause Notice- Jurisdiction of DRI to issue Show Cause NoticeAnalysis:1. Validity of Show Cause Notice issued by DRI under section 28 of the Customs Act, 1962:The main contention raised in the appeal was regarding the validity of the Show Cause Notice issued by the Directorate of Revenue Intelligence (DRI) under section 28 of the Customs Act, 1962. The appellant argued that the officers of DRI do not have the authority to issue such notices for demanding differential duty on goods already assessed and cleared by the proper officer of the Customs House. Citing the judgment in the case of Canon India Pvt. Ltd., the appellant contended that the Show Cause Notice issued by DRI was invalid and without legal authority. The Tribunal, following the precedent set by various judgments, including the decision in Quantum Coal Energy P. Ltd., held that the Show Cause Notice issued by DRI was ab initio void, leading to the setting aside of the impugned orders.2. Inclusion of facilitation charges in assessable value for customs duty:The appellant, engaged in electricity generation, had imported Low Sulphur Fuel Oil on high sea sale basis from Indian Oil Corporation Ltd. (IOCL). The dispute arose when the DRI contended that charges like facilitation charges, letter of credit charges, and demurrages should be included in the assessable value for customs duty calculation. The appellant argued that these charges were not part of the sale value but were incidental charges and should not be considered for customs duty calculation. However, the Commissioner of Customs upheld the inclusion of these charges in the assessable value. The Tribunal did not delve into the merits of the case as the primary issue of the validity of the Show Cause Notice rendered the impugned orders unsustainable.3. Proper officer for issuing Show Cause Notice:The appellant relied on the judgment in Canon India Pvt. Ltd. to argue that officers of DRI are not the proper officers under section 28 of the Customs Act, 1962, and therefore, the entire demand should be set aside. The Tribunal analyzed the legal provisions and precedents cited by the appellant and concluded that the Show Cause Notice issued by DRI lacked legal authority, emphasizing the importance of specific entrustment of functions to determine the proper officer for issuing such notices.4. Jurisdiction of DRI to issue Show Cause Notice:Various judgments, including those in Quantum Coal Energy P. Ltd. and Nitin Jatania vs. Commissioner of Customs, highlighted the invalidity of Show Cause Notices issued by DRI. The Tribunal, in alignment with these decisions, held that the Show Cause Notice issued by DRI lacked jurisdiction and was void from the beginning. The consistent legal position established by previous judgments led to the setting aside of the impugned orders and the allowance of the appeals with consequential relief.In conclusion, the Tribunal set aside the impugned orders, emphasizing the invalidity of the Show Cause Notice issued by DRI and the lack of jurisdiction for such actions, thereby granting relief to the appellant.
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