Tribunal Confirms ADG of DRI as 'Proper Officer' Under Customs Act; Order for Additional Duty and Penalties Upheld.

The Tribunal determined that the Additional Director General (ADG) of DRI qualifies as a 'proper officer' under the Customs Act, 1962, with the authority to issue notices under Section 28(1). Consequently, the order by the Commissioner of Customs, Jaipur, demanding additional duty and penalties is upheld. The appeals are remanded to the regular bench for further proceedings.

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Issues Involved:
1. Jurisdiction of Additional Director General of DRI to issue notice u/s 28 of the Customs Act, 1962.
2. Validity of the order passed by Commissioner of Customs, Jaipur demanding additional duty and penalties.

Summary:

Issue 1: Jurisdiction of Additional Director General of DRI to issue notice u/s 28 of the Customs Act, 1962
The primary issue before the Larger Bench was whether the Additional Director General (ADG) of DRI has the authority to issue a notice u/s 28 of the Customs Act, 1962. This question arose due to conflicting opinions from different Tribunal Benches.

The appellant contended that the ADG of DRI is not a 'proper officer' as defined u/s 2(34) of the Customs Act, which states that a 'proper officer' is an officer of customs assigned those functions by the Board or the Commissioner of Customs. The appellant argued that the ADG of DRI had not been specifically designated as a 'proper officer' to exercise functions u/s 28(1), making the notice invalid.

The Revenue countered that a Notification dated 26-4-1990 appointed the ADG of DRI as a Collector of Customs with jurisdiction over the whole of India, thus making him a 'proper officer' as defined u/s 2(34). They argued that no separate notification was required for the ADG to issue notices u/s 28(1).

The Tribunal reviewed various decisions, including CC, Bombay v. Poona Roller and Bakeman's Home Products Pvt. Ltd., which supported the appellant's view that the ADG of DRI was not a 'proper officer' for issuing notices u/s 28(1). Conversely, decisions like Durga Prasad v. H.R. Gomes and South India Exports v. Jt. DGFT supported the Revenue's stance that officers of DRI, when appointed as Customs officers, could exercise the powers of a 'proper officer'.

The Tribunal concluded that once the ADG of DRI is appointed as a Collector of Customs, he has the jurisdiction to exercise all functions of a Collector, including issuing notices u/s 28(1). The Tribunal held that the ADG of DRI is a 'proper officer' and can issue notices u/s 28(1), thus resolving the issue in favor of the Revenue.

Issue 2: Validity of the order passed by Commissioner of Customs, Jaipur demanding additional duty and penalties
The appeal also challenged the order passed by the Commissioner of Customs, Jaipur, which rejected the transaction value declared by the appellant and demanded additional duty of Rs. 5,20,729/- u/s 28 of the Customs Act, along with penalties u/s 112(a) and interest u/s 28AB.

The proceedings were initiated based on a show cause notice issued by the ADG of DRI. Given the Tribunal's decision on the first issue, affirming the ADG's jurisdiction to issue the notice, the order by the Commissioner of Customs, Jaipur, demanding additional duty and penalties stands validated.

Conclusion:
The Tribunal ruled that the ADG of DRI is a 'proper officer' with the authority to issue notices u/s 28(1) of the Customs Act, 1962. Consequently, the order passed by the Commissioner of Customs, Jaipur, demanding additional duty and penalties is upheld. The appeals are returned to the regular bench for further hearing.

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