TaxTMI 
TaxTMI 
2016 (8) TMI 709
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....pondent : Mr.B.Vijay Karthikeyan, Mr.P.Paul Pandi, Central Government Standing Counsel COMMON JUDGMENT C.T.SELVAM, J. Since the parties and issues involved are one and the same, the present writ appeal and writ petition are heard together and disposed by this common judgment. 2. The Commissioner of Customs (Tuticorin) vide proceedings C.No.VIII/48/61/2013-SIIB dated 13.01.2015 alleged misuse of advance licence/advance authorisation scheme by M/s.Sterlite Industries India Ltd. (hereinafter referred to as 'the company'), the petitioner in W.P.(MD) No. 626 of 2015 between the period February 2005 and May 2010 and consequent evasion of customs duty of Rs. 399,60,57,592/- and issued show cause notice to the following effect: "52. Now therefore, M/s.Sterlite Industries (India) Ltd, (now named as M/s.Sesa Sterlite Limited) DTA Unit, Tuticorin are, hereby required to show cause to the Commissioner of Customs, Custom House, Tuticorin within 30 days of receipt of this notice as to why: (a) Benefit of Customs Notifications No.91/2004-Cus dated 10.09.2004 and No.93/2004-Cus dated 10.09.2004 should not be denied for the import of 77214.024 MT of Copper in Copper Concentr....
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....ause is shown within 30 days of receipt of this notice or having shown cause they fail to appear before the adjudicating authority when the case is posted for hearing, the case shall be decided ex-parte on merits. 57. This notice is issued without prejudice to any order of the Hon'ble High Court in WA No.704/2011 and 705/2011 and any related petitions. This SCN shall not be adjudicated unless and until directions are obtained from the Hon'ble High Court and will be kept pending until such time. 58. This notice issued without prejudice to any other action that may be or has already been initiated against any other Act or Rules made thereunder or under any other laws for the time being in force and enforceable in India." Quash thereof is sought in W.P.(MD) No.626 of 2015. 3. The company imports Copper Concentrate and converts the same into Copper Anodes at its factory at Tuticorin. The Copper Anodes are dispatched to another unit of the Company at Chinchpada and Silvassa on job work basis for conversion into Copper Cathodes, rods, etc. Permission under Rule 4 (6) of the CENVAT Credit Rules, 2004, entitles the company to CENVAT Credit. One of the conditions for availment....
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.... that W.A. (MD)No.704 of 2011 has become infructuous. 4. Heard Mr.C.Natarajan, learned senior counsel for petitioner, Mr.A.R.L.Sundaresan, learned senior counsel for appellant, Mr.B.Vijay Karthikeyan, learned counsel for Customs and Mr.P.Paul Pandi, learned Central Government Standing Counsel for Central Government. 5. Mr.AR.L.Sundaresan, learned senior counsel for appellant, took us through the provisions of the Customs Act towards drawing the distinction between 'Customs Officers' and 'Proper Officers' under the Customs Act, 1962. It was his contention that the respondents 3 to 6 lack jurisdiction to enquire into allegations of offences under the Customs Act, 1962 and Foreign Trade Regulation Act, 1994, r/w the EXIM policy, as they were not proper officers. In circumstance where persons holding the office of the respondents 3 to 6 had undergone a change, learned senior counsel fairly did not press the contention of personal bias and malice. He took us through the order under challenge to explain that the distinction between Customs Officer and Proper Officer had been missed. Referring to the preamble to the show cause notice, learned senior counsel submitted tha....
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....illed within the stipulated period, the requirements of the Notification stands satisfied for actual user like M/s.Sterlite. As per Para 9.5 of the Foreign Trade Police, "Actual user (Industrial) means a person who utilizes imported goods for manufacturing his own industrial units or manufactures for his own use in another unit including jobbing unit. This means that as per the policy the scheme is to allow duty free import of inputs which are physically incorporated in export product but is no one-to-one correlation between imports and exports. The Tribunals in a series of decisions have taken a view that there is no bar in sale of finished goods in the domestic market before export obligation within the stipulated time. In the present case, all raw materials and finished goods have been accounted for between export and domestic sales. There is no goods of any clandestine removal either the raw material or finished goods. In view of the above point, the merits of the case may be relooked. M/s.Sterlite Industries India Ltd., have purchased copper concentrate in bulk either on payment of duty or under exemption. It is not possible to identify the quantity of copper concentrate as ....
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....de disputes arising under the Act they must act independently and impartially. They cannot be said to act independently if their judgment is controlled by the directions given by others. Then it is a minomer to call their orders as their judgments; they would essentially be the judgments of the authority that gave the directions and which authority had given those judgments without hearing the aggrieved party. The only provision under which the Board can issue directions is Rule 233 of the Rules framed under the Act. That rule says that the Board and the Collectors may issue written instructions providing for any supplemental matters arising out of these Rules. Under this rule the only instruction that the Board can issue is that relating to administrative matters; otherwise that rule will have to be considered as ultra vires Section 35 of the Act." Learned senior counsel also relied on the decision of the Apex Court in Mahadayal Premchandra v. Commercial Tax Officer, Calcutta and another [1959 SCR 551], a case wherein, on facts it was found, that the Commercial Tax Officer who issued the show cause notice had not acted independently but had followed the instructions of the Assista....
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.... the duty paid Copper Concentrates is more than sufficient to discharge the duty liability on the final products viz Copper Cathodes/rods arising out of the same. Hence, excess Cenvat Credits are bound to accumulate in the Cenvat account of M/s.Sterlite Industries India Limited, Tuticorin. These excess Cenvat Credits would have been lying idle and could not have been encahsed on any account. Given this situation, M/s.Sterlite Industries Ltd., Tuticorin cleared the final products, made out of non duty paid advance licence inputs, into the DTA markets to misutilise the excess Cenvat Credit which would have otherwise remain unutilised. They pumped their final copper products (meant only for export), manufactured out of the copper concentrate imported without payment of duty on Advance License Scheme, into the local market. While doing so, they utilised the Cenvat Credit that had accumulated as excess, for payment of duty on those domestic clearances and thus encashed the duty amount charged to their buyers using excess cenvat accumulations and conveniently avoiding PLA payments. In this process, there are two serious offences involved. 1. What was legally bound for export was wilf....
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....f assessment and reassessment of customs duty. As the invalidity thereof would result in huge loss of revenue to the exchequer, Government issued notification on 06.07.2011 specifically declaring certain officers as 'proper officers' for the said purpose. Following up thereon, the amendment referred to had been brought about. 15. It is the contention of learned counsel that in the light of the said amendment the cause of action for W.P(MD) No.9744 of 2010 seeking a direction to the first respondent to appoint 'proper officers' of customs to investigate and examine issues, does not survive. Meeting the contention of the show cause notice issued by the Commissioner of Customs, Tuticorin, being the handiwork of another, learned counsel submitted that the draft show cause notice did not bear a date or signature. The Customs authorities may choose to ignore the same. It is only where action is taken under Section 28 of the Customs Act, 1962, that such action must be that of the Proper Officer. The impugned show cause notice had been issued under due authority. Relevant considerations of manufacture, export, import, etc had been gone into and quantification had been done....
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....preme Court. Before us, the issue is not whether any Collector of Customs (Preventive) could be said to be on par with the officers mentioned in the earlier Notification dated 26th April, 1990. The assignment of functions to these officers, who 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 Judgement). 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 ma....
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....epetition of enquiry process. Further, the enquiry having been conducted on physical stock taking of duty free goods as on 31.05.2010, it is not possible to recreate the situation which prevailed on 31.05.2010 in the subsequent enquiry. There is no settled law which bars issue of show cause notice on the basis of enquiry or investigation conducted by the Central Excise authorities. In the writ appeal, the company itself has contended that issues on customs violations are within the exclusive domain of Commissioner of Customs (Port), Tuticorin and hence, the company should not have any grievance when the show cause notice has been issued by the customs authorities with a rider that it will not be acted upon till directions are obtained from the High Court. The communication of the Commissioner of Customs, Tuticorin, dated 14.08.2014, was not issued suo motu but was only a reply to the letter of the Additional Director General of Foreign Trade, Mumbai and since no orders have been passed on the basis of such communication, the company should not have any grievance. It is well settled law that a show cause notice cannot be challenged unless the same was issued without any jurisdiction....
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....of 2010 seeking issue of writ of mandamus directing the first respondent to appoint proper officer and to investigate, falls to the ground. Consequently, W.A. (MD)No.705 of 2011 is to be dismissed. 18. As has been rightly pointed out, we do not find any impediment to the Customs Authorities issuing show cause notice on the basis of materials gathered/input received from Excise Authorities. In fact, Custom notification No.31/97 - Cus (NT) dated 07.07.1997 and the amendment of Section 28 of Customs Act, 1962 by introduction of sub-section 11 is only indicative of the legislative intent that various wings of revenue act closely and cohesively towards avoiding loss thereof. Central Excise Officers deemed to be Customs Officers had gathered material which forms the basis of the show cause notice. Such Excise officials/ Customs officers are deemed to be proper officers for the purposes of Sections 17 and 28 of the Customs Act, 1962. Thus, when viewed through the prism of Section 28(11) of the Customs Act, 1962, it can be seen that what petitioners are complaining about is what really is in the nature of intra departmental communications, a course not open to them. As rightly pointed out....