TaxTMI 
TaxTMI 
2011 (2) TMI 5
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....stoms (Preventive), Mumbai had jurisdiction to issue notice under Section 28 of the Act. 2. Since the question of law arising in all the appeals is similar, these are being disposed of by this common judgment. However, to appreciate the controversy, facts in C.A. Nos. 4294-4295 of 2002 are adverted to. These are : Respondent No. 1 is a partner in respondent No. 2 firm viz. M/s. Handloom Carpet, which is engaged in the business of carpet manufacture/export. Respondent No. 2 was charged with misusing the Export Pass Book scheme by selling goods cleared duty free in the open market or selling the pass book on premium in violation of the ITC restriction imposed on such sale. Investigations in the matter were conducted by the Marine and Preventive Wing of the Customs. On 28th August, 1991, the Assistant Collector of Customs (Preventive), Mumbai, issued to the respondents a show cause notice, alleging violation of the provisions of Section 111(d) of the Act. On 3rd February, 1993, the same officer adjudicated upon the said show cause notice, confirming the demands raised in the show cause notice. 3. Being aggrieved, the respondents preferred an appeal before the Collec....
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....confiscation under the provisions of the customs Act, 1962 and the customs (preventive) Commissionerate created for the purpose of prevention of smuggling and detention of cases of smuggling including commercial frauds is thus (sic) competent to investigate and adjudicate the case." The Collector confirmed the demand of duty of Rs. 5,07,274/- under Section 28(1) of the Act. He also ordered confiscation of two consignments of dyes sulphur blue and sulphur blue green valued at Rs. 1,34,118.52/-, and imposed a redemption fine of Rs. 1,50,000/-. 6. Aggrieved, the respondents preferred appeals before the CEGAT. As afore-mentioned, accepting the preliminary objection of the respondents regarding jurisdiction of the Collector (Preventive), the CEGAT has, vide the impugned order, allowed the appeals, observing that : "it is very clear that the Commissioner of Customs (Preventive) does not have jurisdiction to issue the impugned show cause notice and in view thereof he could not have the jurisdiction to adjudicate the matter when imports have taken place at Bombay Customs House." 7. At the sake of repetition, it may be noted that although the facts obtaining in C.A. No....
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.... Vellapally, learned senior counsel appearing on behalf of the respondents in C.A. Nos. 4294-4295 of 2002, contended that the statutory powers conferred under Section 28 of the Act must be exercised by an officer of Customs, who has been assigned those functions either by the Central Board of Excise and Customs or by the jurisdictional Commissioner of Customs (Imports). As the Commissioner (Preventive) has not been appointed as a "proper officer" for the purposes of assessment or re-assessment, nor assigned any functions under Section 28 of the Act or under any other Section related to assessment of goods entered for home consumption, he was not competent to issue notice under Section 28 of the Act, argued the learned counsel. It was also urged that mere appointment of a person as an officer of Customs with territorial jurisdiction over the Mumbai port under Section 4 of the Act, does not ipso facto confer authority on him to exercise the statutory powers entrusted to proper officers, as under the Act, while all proper officers must be 'officers of Customs', all 'officers of Customs' are not "proper officers". In support of the proposition, learned counsel heavily relied on a decis....
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....of the Calcutta High Court in Sharad Himatlal Daftary v. Collector of Customs 1988 (36) E.L.T. 468 (Cal.). It was submitted that in the instant case, the import manifest and the bill of entry were filed before the Additional Collector of Customs (Imports) Mumbai; the bill of entry was duly assessed, and the benefit of the exemption was extended, subject to execution of a bond by the importer which was duly executed, undertaking the obligation of export. Learned counsel argued that the function of the preventive staff is confined to goods which are not manifested as in respect of manifested goods, where the bills of entry are to be filed, the entire function of assessment, clearance etc. is carried out by the appraising officers functioning under the Commissioner of Customs (Imports). 12. Before adverting to the rival submissions, it would be expedient to survey the relevant provisions of the Act. Section 28 of the Act, which is relevant for our purpose, provides for issue of notice for payment of duty that has not been paid, or has been short-levied or erroneously refunded, and provides that : "28. Notice for payment of duties, interest etc. - (1) When any duty has ....
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....on 2(34) of the Act. Specific entrustment of function by either the Board or the Commissioner of Customs is therefore, the governing test to determine whether an "officer of customs" is the "proper officer". 14. From a conjoint reading of Sections 2(34) and 28 of the Act, it is manifest that only such a customs officer who has been assigned the specific functions of assessment and re-assessment of duty in the jurisdictional area where the import concerned has been affected, by either the Board or the Commissioner of Customs, in terms of Section 2(34) of the Act is competent to issue notice under Section 28 of the Act. Any other reading of Section 28 would render the provisions of Section 2(34) of the Act otiose in as much as the test contemplated under Section 2(34) of the Act is that of specific conferment of such functions. Moreover, if the Revenue's contention that once territorial jurisdiction is conferred, the Collector of Customs (Preventive) becomes a "proper officer" in terms of Section 28 of the Act is accepted, it would lead to a situation of utter chaos and confusion, in as much as all officers of customs, in a particular area be it under the Collectorate of Cust....