AI Drafter 
TaxTMI 
TaxTMI 
2014 (12) TMI 151
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....claring the amendment to Section 28 of the Customs Act, 1962 by inserting clause (11), whereby, it provided "all persons appointed as officers of Customs under subsection (1) of section 4 before the sixth day of July, 2011 shall be deemed to have and always had the power of assessment under Section 17 and shall be deemed to have been and always had been the proper officers for the purposes of this section" to be Ultra vires and unconstitutional as the said amendment is violative of Articles 14, 19 and 21 of the Constitution of India. c. That this Hon'ble Court may further be pleased to issue an appropriate writ, order of directions for setting aside the Circular No. F. No. 437/143/2009Cus. IV dated 23rd September, 2011, whereby, in terms of the amended Section 28 of the Customs Act, 1962, directions have been issued to the relevant authorities that "Show Cause Notice issued prior to 6.7.2011 by officers of Customs, which would include officers of Commissionerates of Customs (Preventive), Directorate General of Revenue Intelligence (DRI), Directorate General of Central Excise Intelligence and similarly placed officers stand validated since these officers are retrospecti....
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....s ultra vires the Customs Act, 1962, as the same fails to take note of the Explanation 2. In other words, it is submitted that section 28 enables recovery of duty not levied or short levied or erroneously refunded. Sub section (11) thereof has been inserted by Act 14 of 2011 w.e.f. 16th September, 2011. That states that notwithstanding anything to the contrary contained in any Judgment, Decree or Order of any Court of law, Tribunal or other authority, all persons appointed as officers of Customs under sub section (1) of section 4 before 6th July, 2011 shall be deemed to have and always had the power of assessment under section 17 and shall be deemed to have been and always had been the proper officers for the purpose of this section. 4) It is submitted that Explanation 2 removes any doubts and states that any non levy, short levy or erroneous refund before the date on which the Finance Bill, 2011 receives the assent of the President, continues to be governed by the provisions of section 28 as they stood immediately before the date on which such assent is received. 5) The argument on legality and validity is premised on the fact that the Directorate of Revenue Intelligence and....
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....stitution of India. This Writ Petition therefore should be entertained and cannot be dismissed summarily. Our attention has also been invited to several Tribunal Judgments by Mr. Singh. He has laid great emphasis on the observations and conclusion of the Hon'ble Supreme Court in the case of Sayed Ali (supra), where, it has been held by the Hon'ble Supreme Court that it is only the officers of Customs who are assigned functions of assessment, which ofcourse includes reassessment. In such circumstances, they alone are competent to issue the notice under section 28 of the Act. For these reasons, it is submitted that the basis of this Judgment has not been altered by the Parliament. The Parliament has no competence to overrule the binding Judgment of the Hon'ble Supreme Court. For such reasons, the law laid down therein continues to bind us. 8) Mr. Jetly, the learned Counsel appearing on behalf of the Revenue, on the other hand, submits that this Writ Petition challenges a show cause notice issued under the Customs Act, 1962. It is settled law that this Court does not interfere under Article 226 of the Constitution of India at the stage of show cause notice. There is no ....
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....irectorate of Revenue Intelligence, Bombay was not a competent officer. It is submitted by Mr. Jetly that the DRI officers have been appointed as Collector of Customs and insofar as the State of Maharashtra, Gujrat, Madhya Pradesh, Goa and Union Territory of Deu and Daman, the Additional Director General of Revenue Intelligence, Bombay is the competent Custom Officer. Mr.Jetly also relies upon the Notification dated 6th July, 2011, copy of which is at Exhibit2 at page 373 of the paper book. For these reasons, Mr. Jetly submits that the Writ Petition be dismissed. 10) Mr. Jetly has relied upon a Judgment of Hon'ble Supreme Court in the case of Sangam Spinners Ltd. Vs. Union of India 2011 (266) E.L.T. 145 (S.C.) and for the purposes of the principle that a validating Act validates all prior actions including of the past. It removes actual or possible voidness, disability or defect by confirming the validity of anything which is or may be invalid. 11) With the assistance of Mr. Singh and Mr. Jetly, we have perused this Writ Petition and all Annexures thereto. We have also perused the affidavit filed in reply and the Annexures. We have perused the relevant statutory provision....
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....11(d) of the Customs Act, 1962. On 3rd February, 1993, the same officer adjudicated the show cause notice, confirmed the demands and that is how an Appeal was preferred before the Collector of Customs (Appeals). He partially allowed it on some other grounds and concluded to hold that the show cause notice was required to be issued by the Collector and not by the Assistant Collector. Thereafter, the Collector of Customs (Preventive) issued another show cause notice dated 16th April, 1994. In reply to the show cause notice, the jurisdiction of the Collector of Customs (Preventive) was questioned and relying upon a Notification. The two Notifications which have been relied upon are referred to in para 6 of the Judgment of the Hon'ble Supreme Court. Since the Collector confirmed the show cause notice subsequently issued, the matter was carried in Appeal before the CEGAT. The preliminary objection of the Respondent regarding jurisdiction was upheld and that is how the Commissioner approached the Hon'ble Supreme Court. 16) The arguments have been noted by the Hon'ble Supreme Court from paragraphs 10 onwards and then, reference is made by the Hon'ble Supreme Court to st....
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....e Act clearly defining the functions of the Customs House and the Preventive Collectorate. 23. In the present case, the import manifest and the bill of entry having been filed before the Collectorate of Customs (Import), Mumbai, the same having been assessed and clearance for home consumption having been allowed by the proper officer on imports executing bond, undertaking the obligation of export, in our opinion, the Collector of Customs (Preventive), not being a "proper officer" within the meaning of Section 2(34) of the Act, was not competent to issue show-cause notice for reassessment under Section 28 of the Act. 24. Nothing has been brought on record to show that the collector of Customs (Preventive), who had issued the show-cause notices was assigned the functions under Section 28 of the Act as "proper officer" either by the Board or the Collector/Commissioner of Customs. We are convinced that Notifications Nos. 250Cus. And 251Cus, both dated 2781983, issued by the Central Government in exercise of the powers conferred by subsection (1) of the Section 4 of the Act, appointing Collector of Customs (Preventive), etc. to be the Collector of Customs for Bombay, T....
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....t or suppression of facts, (a) the proper officer shall, within one year from the relevant date, serve notice on the person chargeable with the duty or interest which has not been so levied or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice; (b) the person chargeable with the duty or interest, may pay before service of notice under clause (a) on the basis of, (i) his own ascertainment of such duty; or (ii) the duty ascertained by the proper officer, the amount of duty along with the interest payable thereon under section 28AA or the amount of interest which has not been so paid or partpaid: Provided that the proper officer shall not serve such show cause notice, where the amount involved is less than rupees one hundred. (2) The person who has paid the duty along with interest or amount of interest under clause (b) of subsection (1) shall inform the proper officer of such payment I writing, who, on receipt of such information, shall not serve any notice under clause (a) of that subsection in respect of the duty o....
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....ermination, if the proper officer of the opinion (i) that the duty with interest and penalty has been paid in full, then, the proceedings in respect of such person or other persons to whom the notice is served under subsection (1) or subsection (4), shall, without prejudice to the provisions of sections 135, 135A and 140 be deemed to be conclusive as to the matters stated therein; or (ii) that the duty with interest and penalty that has been paid falls short of the amount actually payable, then the proper officer shall proceed to issue the notice as provided for in clause (a) of subsection (1) in respect of such amount which falls short of the amount actually payable in the manner specified under that subsection and the period of one year shall be computed from the date of receipt of information under subsection (5). (7) In computing the period of one year referred to in clause (a) of subsection (1) or five years referred to in subsection (4), the period during which there was any stay by an order of a court or tribunal in respect of payment of such duty or interest shall be excluded. (8) The proper officer shall, after allowing the concerned per....
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....11. Prior thereto, section 28 reads as under: "28. Notice for payment of duties, interest, etc.- (1) When any duty has not been levied or has been short-levied or erroneously refunded, or when any interest payable has not been paid, part paid or erroneously refunded, the proper officer may, (a) in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, within one year; (b) in any other case, within six months, from the relevant date, serve notice on the person chargeable with the duty or interest which has not been levied or charged or which has been so short-levied or part paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice: PROVIDED that where any duty has been levied or has been short-levied or the interest has not been charged or has been part paid or the duty or interest has been erroneously refunded by reason of collusion or any willful misstatement or suppression of facts by the importer or the exporter or the agent or employee of the importer or e....
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....s possible to do so, shall determine the amount of such duty or the interest, within a period of one year; and (ii) In any other case, where it is possible to do so, shall determine the amount of duty which has not been levied or has been short-levied or erroneously refunded or the interest payable which has not been paid, part paid or erroneously refunded, within a period of six months, from the date of service of the notice on the person under subsection (1). (2B) Where any duty has not been levied or has been short-levied or erroneously refunded, or any interest payable has not been paid, part paid or erroneously refunded, the person, chargeable with the duty or the interest, may pay the amount of duty or interest before service of notice on him under subsection (1) in respect of the duty or the interest, as the case may be, and inform the proper officer of such payment in writing, who, on receipt of such information, shall not serve any notice under subsection (1) in respect of the duty or the interest so paid: Provided that the proper officer may determine the amount of short-payment of duty or interest, if any, which in his opinion has not been paid....
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.... facts and subsection (4) takes care of those cases. Subsection (11) has been inserted by Act 14 of 2011 w.e.f. 16th September, 2011 and overrides anything to the contrary contained in any Judgment, Decree or Order of any Court of law, Tribunal or authority. It empowers all persons appointed as officers of Customs under subsection 2(4) before 6th July, 2011 as "proper officers" for the purposes of section 28. They also are deemed to be possessing the power of assessment under section 17. 20) In the present case, if the show cause notice has been issued by the Director of Intelligence, then, we have to find as to whether he was competent to do so. In that regard, we have on record the Notification dated 26th April, 1990 Exhibit-I at page 369 of the paper book. That reads as under: "Notification: 19/89-Cus. (NT) dated 26 Apr 1990 Appointment of D. R. I. Officials as Customs Officers In exercise of the powers conferred by subsection (1) of Section (4) of the Customs Act, 1962 (52 of 1962), and in suppersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 186-Cus., dated 4th August, 1981 (as amended)....
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...., Gujrat, Madhya Pradesh etc., it is the Additional Director General, Directorate of Revenue Intelligence, Bombay, who is a Customs officer. Nothing contrary to the above having been brought to our notice, we do not see any force in the contention of Mr. Singh that the Additional Director General was incompetent to issue the show cause notice. There is no force in the argument that despite such Notification and the subsequent one issued on 6th July, 2011, the Central Government and the Board have not entrusted or assigned the functions of the proper officer to this Additional Director. Now, the further Notification at page 373 of the paper book proceeds to assign the functions of the proper officer to Additional Director General of this Directorate. In these circumstances and when section 17 and 28 are specifically referred to in the Notification at page 373, then, we do not see any force in the argument of the Petitioner that the DRI was not competent to issue the subject show cause notice. The Notifications clearly indicate that the officers of this directorate have been entrusted or assigned the functions of the Customs Officers for the purpose of these sections. They could have....
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....o were earlier carrying on preventive work came w.e.f. 6th July, 2011. That Notification was not, at the relevant time, given retrospective effect. It is in such circumstances that the Hon'ble Supreme Court held that in terms of the Notifications, which were issued and holding the field, not designating the Collector of Customs (Preventive) as a proper officer for the purpose of section 28 as it then stood, he was not competent to issue show cause notice (see para 24 of Sayed Ali's Judgment). This position has now undergone a change and from 6th July, 2011, admittedly, they have been assigned these functions and of the Custom officers. They are therefore competent and the Notification in that behalf at page 373 of the paper book has been given a retrospective effect. It is not the argument of Mr. Singh that the law cannot be amended retrospectively. It is also not his argument that the validating Act does not validate anything which may be or is invalid. In the circumstances and the Parliament being competent to make such a law, we find no force in the arguments canvassed before us. Once the above view is taken, then, no reference is required to be made to the other Judgmen....