TaxTMI 
TaxTMI 
2017 (4) TMI 372
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....s Pvt. Ltd. Versus CC Tuticorin, CC Tuticorin Versus Srinidhi Fabrics Pvt. Ltd., Raja Metal Corpn. Versus CC Chennai, P. Srinivasan Versus CC, Chennai, Seenu Kargoways Versus CC Chennai, Visualan Technologies (P) Ltd. Versus CC Chennai, G.Derrick Sam Thameema Trading Corpn. Versus CC Chennai, South India Shipping and Export Co. Versus CC Chennai, Disha Foods Pvt. Ltd. Versus CC Chennai And Ravi Foods Pvt. Ltd. Versus CC Chennai(Export-Seaport) ORDER Per: Madhu Mohan Damodhar Shri S. Krishnanandh, Advocate along with Shri Satish Sundar, Advocate on behalf of appellants appearing in Sl.Nos.3,4,5,6,7,9,10, 18,45,46,48,49 and 50 submitted that in all these appeals, show cause notices have been issued by the D.R.I prior to 08.04.2011. Officers of the D.R.I were not proper officers at the relevant point of time when notices were issued prior to 08.04.2011. Section 17 and 28 of the Customs Act, 1962 were amended by Finance Bill, 2011 which received the assent of the President on 8.4.2011. By such amendment, Section 28 was substituted by a new section. That new section has 10 sub-sections. While law earlier to that under section 28 had 5 sub-sections. Compilation of this law was s....
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....ions 4 & 5 enables to appoint a customer officers and confers them power. But a customs officer so appointed should be notified as a 'proper officer' under Section 34 (2) of the Act. That was lacking in the present case where DRI officers shall have no power under sub-section (2) of section 34 of the Act to be proper officer. 5. Explaining further, the emphasis of the counsel is the date of incidence besides consequence thereof on the basis of law as that was prevailing on that date. Therefore Explanation-2 to section 28 of the Act very clearly says that what that was law before 8.4.2011 shall govern the cases where SCNs were issued prior to that date and sub-section (11) does not override the intention of Explanation-2. 6. Sub-section (11) read with Explanation (2) were under scrutiny by the Hon'ble High Court of Delhi in the case of Mangli Impex Ltd. Vs UOI reported in 2016 (335) ELT 605 (Del.). The court categorically stated that provisions contained in sub-section (11) is overrided by Explanation-2 which is the provision to govern cases originated prior to sub-section (11) came into force. No doubt, Mangli Impex judgement is in jeopardy before Apex Court due t....
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....Ali judgement for allowing the appeals. Sub-section (11) when incorporated into the statute that is nullified notwithstanding anything to the contrary contained in any judgement, decree or order of any Court of law, tribunal or other authority and shall have retrospective effect empowering powers vested under Section 4 (1) of the Customs Act, 1962 before 6.7.2011. They shall always have the power of assessment under section 17 and shall be deemed to have been proper officer for the purpose of section 28. Revenue further submits that it made its stand before the Delhi High Court as recorded in parts 37 to 40 of the said judgement which are reproduced as under : "37. On behalf of the Respondents, it was pointed out that with the Bombay High Court in Sunil Gupta v. Union of India - 2015 (315) E.L.T. 167 (Bom.) upholding the constitutional validity of Section 28(11) of the Act and accepting the plea of the Department that by virtue of insertion of Section 28(11), the SCNs issued prior to 8th April 2011 by the DRI, the notices issued by officers of the DRI, the DGCEI etc., i.e., officers who may not have been expressly assigned the functions of proper officers under Section 2(3....
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....erate retrospectively although by such operation, it will deprive some person or persons of a vested right. Thus, public interest at large is once again relevant consideration in determining the constitutional validity of a retrospective legislation." Relying on the above submissions before Delhi High Court, Revenue emphasized that when a retrospective amendment was made to section 28, even SCNs issued before 8.4.2011 are the proper SCNs and liable to be adjudicated. Explanation-2 is to be read with sub-section (11) to hold that officers of customs were always proper officers and the date of their appointment before 6.7.2011 is relevant to be called as "proper officer". By virtue of incorporation of sub-section (11) Explanation-2 appearing under section 28 of the Act has no relevance. 13. We have heard both sides and have gone through the facts of the matter. 14.1 Apex Court in its judgement dt. 18-02-2011 in Sayed Ali case held that only such a customs officer who has been assigned the specific functions of assessment and reassessment of duty in the jurisdictional area where the import concerned has been effected, in terms of Section 2 (34) of the Act, is competent to iss....
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....ous officers (including Additional Director General, DRI) mentioned in the notification, for the purposes of Section 28 of the Act. Thus, w.e.f. July 6, 2011, Additional Director General, DRI was prospectively appointed as 'proper officer' for the purpose of Section 28 of the Customs Act. Hence from 06.07.2011 ADG-DRI has been empowered to issue demand notice under Section 28. 14.5 In the case of Chandna Impex Pvt. Ltd. Vs CC New Delhi - 2012 (26) STR 257 (SC) passed on 05-07-2011, the Hon'ble Supreme Court dealt with the case wherein SCN was issued by DRI and one of the questions of law that arose was whether Additional Director General, DRI is a 'proper officer' within the meaning of Section 28 of the Customs Act. The Hon'ble Supreme Court has remanded the matter back to the Tribunal with a direction to examine the matter afresh particularly in the light of the decision in Sayed Ali case. 14.6 The validity of this newly enacted Section 28 (11) of Customs Act was further challenged in a number of cases. 14.7 The Hon'ble Mumbai High Court in the judgement in the case of Sunil Gupta Vs UOI decided on 03-01-2014, reported in 2015 (315) ELT 167 (Bom.), disting....
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....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 Judgments cited by both Mr. Singh and Mr. Jetly. 25. As a result of the above discussion and finding that Explanation 2 has not been dealing with the case, which was specifically dealt with by sub-section (11) of Section 28 of the Act, that we are of the opinion that the challenge in....
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....tion 28 as presently enacted makes it explicit that such non-levy, short-levy or erroneous refund prior to 8th April 2011 would continue to be governed only by Section 28 as it stood prior to that date and not the newly re-cast Section 28 of the Act. 70.2 Section 28(11) interpreted in the above terms would not suffer the vice of unconstitutionality. Else, it would grant wide powers of assessment and enforcement to a wide range of officers, not limited to customs officers, without any limits as to territorial and subject matter jurisdiction and in such event the provision would be vulnerable to being declared unconstitutional. 70.3 As regards the period subsequent to 8th April 2011, it is evident that if the administrative chaos as envisaged by the Supreme Court in Sayed Ali (supra) should not come about, there cannot be any duplicating and/or overlapping of jurisdiction of the officers. It would have to be ensured through proper co-ordination and administrative instructions issued by the C.B.E. & C. that once a SCN is issued specifying the adjudicating officer to whom it is answerable, then that adjudication officer, subject to such officer being a proper officer ....
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....ly, the Delhi High Court as well as the Punjab & Haryana High Court have not considered the issue from the point of view of merger. It is needless to point out that the doctrine of merger is a common law doctrine founded on principles of propriety in the hierarchy of justice delivery system. The underlying principle behind the doctrine of merger is that there cannot be more than one decree. 13. The issue can be looked at from another aspect also. Today, the effect of our allowing the writ petition and setting aside the show cause notice would be to set at naught, the order of adjudication, the judgment of CESTAT, the judgment of this Court and the order of Supreme Court. What cannot be achieved by the petitioner directly cannot be achieved by them indirectly. 14. The contention that all proceedings founded upon a show cause notice that was inherently lacking in jurisdiction, would be non est, null and void, is perhaps right as a simple statement of a proposition of law. But it is not without exceptions. If this theory of nullity and voidity is accepted, all proceedings initiated before 8-4-2011, which have already culminated in orders of adjudication and pursuant ....
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.... prior to 8th April, 2011 if, there was no proper assigning of the functions of reassessment or assessment in favour of such officers who issued such SCNs since they were not proper officers for the purposes of Section 2(34) of the Act and further because Explanation 2 to Section 28 as presently enacted makes it explicit that such non-levy, short-levy or erroneous refund prior to 8th April, 2011 would continue to be governed only by Section 28 as it stood prior to that date and not the newly re-cast Section 28 of the Act." 15.3 The incontrovertible fact that emerges from the above discussions is that the Mangali Impex judgment has been stayed by the Supreme Court. It is well settled principle of law by Hon'ble Apex Court in UOI Vs West Coast Paper Mills Ltd. -2004 (164) ELT 375 (SC) that once the appeal been filed against a Judgment of lower court and entertained by the Supreme Court as well as operation thereof stayed, the judgment of lower court is in jeopardy. Relevant portions of that judgement are reproduced below : "14. Article 136 of the Constitution of India confers a special power upon this Court in terms whereof an appeal shall lie against any order passed....