2002 (2) TMI 288 - AT - Customs

Tribunal rules DRI lacks jurisdiction for show cause notices not involving provisional assessment under Customs Act

The Tribunal held that the Directorate of Revenue Intelligence (DRI) lacked jurisdiction to issue show cause notices in cases not involving provisional ... Demand vis-a-vis Provisional assessment - Demand Issues involved: Department appeals against dropping of show cause notices by Commissioner of Customs, Mumbai; Misdeclaration of goods to evade Customs duty; Jurisdiction of DRI to issue show cause notices; Provisional assessment and conspiracy defense; Proper officer for issuing show cause notices under Section 28 of Customs Act, 1962.Jurisdiction of DRI to issue show cause notices: The Department argued that DRI had jurisdiction to issue show cause notices concurrently, supported by a judgment of the Calcutta High Court. However, the Tribunal held that for cases not involving provisional assessment, DRI could not issue notices as they are not the proper officers as per Section 28 of the Customs Act, 1962. Reference was made to the judgment in Manohar Brothers (Capacitors) v. CCE regarding the definition of 'proper officer' and specific assignment of functions.Provisional assessment and conspiracy defense: The Tribunal clarified that once a provisional assessment is made, it stands until finalized, and any short-levy issues arise only after finalization as per Section 28 of the Customs Act, 1962. The argument that conspiracy cannot be pleaded as a defense in cases involving provisional assessment was also addressed.Proper officer for issuing show cause notices: Referring to the definition of 'proper officer' under Section 2(34) of the Act, the Tribunal emphasized that only officers specifically assigned functions, such as duty collection, can be considered proper officers to issue notices under Section 28. The Tribunal rejected the Department's reliance on the Calcutta High Court judgment, stating it was not applicable to the current case. Consequently, all appeals by the Department were dismissed based on the lack of proper officer authority for issuing show cause notices.