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2015 (7) TMI 417
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....t), Chennai within 30 days from the date of receipt of the notice. Apart from the petitioner there were 4 other noticees who were also directed to show cause as to why personal penalty should not be imposed on them under Section 112 of the Act. The respondent is the Additional Director General, Directorate General of Revenue Intelligence, Chennai. 3. A brief background as to under what circumstances, the impugned show cause was issued. Specific intelligence is said to have been received by DRI that the petitioner Mr. Abhishek Mundhra, Director of Mundhra Bullion Pvt., Ltd., would be carrying smuggled gold bars from Kolkata to Chennai by Spice Jet flight SG324 arriving at Chennai on 14-10-2013 was intercepted at the Chennai Airport by the Customs and the DRI officials. The petitioner was travelling along with his minor son and was found carrying a small hand bag, a trolley bag and while his son was carrying a small shoulder bag. The petitioner is said to have stated that he has around 15kg of gold bars in his small hand bag. After the petitioner's son was sent home in the petitioner's car, which was waiting at the Airport, the contents of the bag carried by the petitioner wa....
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....nior Counsel referred to Section 124 of the Customs Act and submitted that no order confiscating of any goods or imposing penalty on any person shall be made, unless such person is given a notice in writing with the prior approval of the officer of Customs not below the rank of an Assistant Commissioner of Customs informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty. By referring to clause (a) of Section 124, it is submitted that there is no prior approval obtained as required under the statute. Further, it is submitted that even such notice cannot be issued by the respondent, who is an Additional Director of DRI and such notice can be issued by a proper officer as defined under Section 2(34) of the Act, which defines proper officer in relation to any functions to be performed under the Act to mean the officer of Customs, who is assigned those functions by the Board or the Commissioner. It is submitted that the respondent is not an officer of Customs in terms of the said definition and has no jurisdiction to issue the impugned show cause notice. In support of his contention, the learned Counsel referred to the decision of the Hon'ble S....
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.... (S.C.) = 2007 (5) S.T.R. 3 (S.C.) (paras 9 & 10) 6. Mr. Velayutham Pichaiya, learned Senior Standing Panel Counsel appearing for the respondent after referring to the factual averments as set out in the counter affidavit, submitted that in terms of Section 124 of the Act, any officer of Customs not below the rank of Assistant Commissioner has authority to issue the show cause notice for confiscating of goods and in the instant case, the Additional Director General of DRI has issued the show cause notice and the question would be whether the respondent is an officer of Customs not below the rank of an Assistant Commissioner of Customs. It is submitted that the Central Government vide notification No. 38/F.No.4/1/6-CAR, in exercise of its powers under Section 4 of the Act has appointed all officers of DRI to be officers of Customs. Further, by Customs Notification No. 19/1990 (N.T.), dated 26-4-1990, the Central Government in supersession of an earlier notification in No. 186-Cus., dated 4-8-1981 has appointed to be the officers of the respondent mentioned in column Nos. 2, 3 & 4 of the table mentioned therein to be Commissioner of Customs, Joint Commissioner of Customs and ....
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....red. In support of such contention, reliance has been placed on the decision of the Hon'ble Supreme Court in the case of Union of India v. Jain Sudh Vanaspathi Ltd., reported in 1996 (86) E.L.T. 460 (S.C.). 8. It is further submitted that Section 122 of the Act relates to adjudication for confiscation of goods and imposition of penalties and Section 124 of the Act relates to the issue of show cause notice before confiscation of goods or imposition of penalty. The argument of the petitioner is that the adjudication proceedings under Section 122 of the Act has been entrusted with the Commissioner of Customs and his subordinates depending on the value of goods and since the issuance of show cause notice forms part of adjudication proceedings, it is only the Adjudicating Authority who can adjudicate on the question of adjudication and consequently he alone can issue the show cause notice. It is further submitted that pursuant to Notification No. 44/2011-Cus., (N.T.), dated 6-7-2011, the officers of the respondent including the Additional Director General were appointed as proper officer for the purpose of Sections 17 and 28 of the Act. Section 28 was first amended on 8-4-2011 a....
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....the case of Union of India v. Kunisetty Satyanarayana reported in (2006) 12 SCC 28 and Special Director v. Mohammed Ghulam Ghouse reported in (2004) 3 SCC 440 = 2004 (164) E.L.T. 141 (S.C.) and Union of India v. Vicco Industries, reported in 2008 (2) CTC 511 and the unreported decisions of this Court in Sterlite Industries Ltd., v. CBES in W.P. Nos. 9744 & 9745 of 2010, and Nakoda India Pvt Ltd., v. Union of India in W.P. No. 31842 of 2012 = 2014 (300) E.L.T. 10 (Mad.). On the above submissions, the learned Counsel seeks to sustain the impugned show cause notice. 11. In reply, the learned Senior Counsel submitted that the decision of the Gujarat High Court referred by the respondent deals with Sections 17 and 28 of the Act and the contention of the petitioner is with regard to the power under Section 124(a) of the Act, which contemplates prior concurrence and action be initiated by Officer of Customs and both these conditions have not been fulfilled in the instant case and therefore, the show cause notice is bad in law. 12. Heard the learned Counsels appearing on either side and perused the materials placed on record. 13. As noticed above, the impugned show ....
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.... part paid or erroneously refunded, the proper officer within the time stipulated, serve notice on the person chargeable with the duty or interest requiring to show cause as to why he should not pay the amounts specified in the notice. Section 28 falls in Chapter V, which deals with 'levy of and exemption from Customs duty'. In terms of Section 47(1) of the Act, where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under the Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption. In case of improper importation are where the goods have been cleared either clandestinely or by fraud, Chapter 14 of the Act would get attracted. The said Chapter deals with 'confiscation of goods and conveyance and imposition of penalties'. The impugned show cause notice proposes to confiscate 15.16 gold bars of foreign origin under Sections 111(d) and 111(l) of the Act read with Section 120(1) which deals with 'confiscation of smuggled goods' notwithstanding any change in form apart from proposing....
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....5. Further, the circular issued by the C.B.E. & C., dated 15-2-1999 and 23-9-2011, clearly states that the Directorate of Revenue Intelligence Officers can undertake investigation of cases deducted by them and to issue show cause notices on completion of investigation. Admittedly, the petitioner has not questioned the statutory notification or the circular issued by the C.B.E. & C., and hence, this Court is of the view that the impugned show cause notice does not suffer from want of jurisdiction. 16. In the light of the above discussion, the legal position that emerges is that an act or omission which will render the goods liable for confiscation under Section 111 or 113 of the Act, is an act of smuggling as defined under Section 2(39) and where there is smuggling, Chapter 14 would get attracted. Section 113 provides for confiscation of goods attempted to be improperly exported and Section 122 refers only to the question of adjudication process and the limit of officers and it is only under Section 124, which says that before confiscating the goods or imposing any penalty, the show cause notice should be given to the person concern. At this stage, it would be beneficia....
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....this was done with a view to enabling their clearance. A clearance order under Section 47 obtained by fraudulent means such as this (if it, in fact, be so) cannot debar the issuance of a show cause notice for confiscation of goods under Section 124. Fraud, if established, unravels all. An order under Section 47 obtained by the employment of fraudulent methods does not have to be set aside by the exercise of revisional powers under Section 130 before the ill-effects of the fraud can be set right by initiation of the process of confiscation of the fraudulently cleared goods under Section 124. 17. On the second issue with regard to the allegation that the show cause notice has pre-judged the issue, it is a pre-meditated notice and foreclosed the materials rights, the learned Senior Counsel referred to the decision of the Hon'ble Supreme Court in the cases of Oryx Fisheries Private Limited (supra) and Siemens Ltd., (supra) to contend that the Writ Petition is maintainable and even though the show cause notice is answerable to the Joint/Additional Commissioner of Customs, yet the defect cannot be cured. 18. I have carefully perused the allegations made in the show cause ....