TaxTMI 
TaxTMI 
2020 (2) TMI 1137
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....ps be pleased to stay and suspend the operation and implementation of the Notification No.44/2011Cus (N.T.) dated 6th July 2011 issued by the respondent no.2 at Annexure C hereto and the show cause notice dated 7th November 2014 issued by the respondent no.3 at Annexure D hereto; (C) Pending admission, hearing and final disposal of this petition, your Lordships be pleased to restrain the respondent no.4 from proceeding further in regard to the adjudication of the demands raised by way of the show cause notice dated 7th November 2014 issued by the respondent no.3 at Annexure D hereto. (D) Ex-parte ad-interim relief in terms of para C and D above be granted. (E) Such other and further reliefs as deemed just and proper in the facts and circumstances of the present case be granted." Thus, what is essentially under challenge is the Notification No.44/2011Cus (N.T.) dated 6th July 2011 issued by the respondent no.2 and the show cause notice dated 7th November 2014 issued by the respondent no.3. 3. The facts in brief as could be culled-out from the memo of the petition and annexures deserve to be set-out as under in order to appreciate the controversy. ....
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....the Hon'ble Supreme Court challenging the said order of the Hon'ble Delhi High Court. The respondent no.2 has instructed field formations to transfer all the show cause notices issued by DRI and such other authorities prior to 6th July 2011 to the Call Book till disposal of the matter by the Supreme Court. The respondent no.2 has directed that such show cause notices be kept in abeyance till disposal of the matter by the Supreme Court. The petitioner raising the issue of jurisdiction of the respondent no.3 to issue the show cause notice and inviting attention to the said instruction issued by the respondent no.2, wrote a letter dated 27th September 2016 to the respondent no.4 and requested to keep the matter in abeyance till the issue is decided by the Hon'ble Supreme Court. To which the respondent no.4 orally informed the petitioners that he would not keep the matter pending till the decision of the Hon'ble Supreme Court and would proceed with the matter on merits on the next date of hearing i.e. 11th November 2016. 3.3 The present case involves an issue of law as regards the jurisdiction of the officers of the Directorate of Revenue Intelligence (DRI) to issue ....
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....ent of the President, shall continue to be governed by the provisions of Section 28 as it stood immediately before the date on which such assent is received." 3.6 Thereafter, another Act, being the Customs (Amendment and Validation) Act, 2011 was enacted which introduced a new subsection (11) to Section 28 w.e.f. 6th July 2011 and the said subsection (11) reads as under : "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 subsection (1) of section 4 before the 6th day of July 2011 shall be deemed to have an always had the power of assessment under section 17 and shall be deemed to have and always had been proper officers for the purpose of this section." 3.7 The respondent no.2 issued notification dated 6th July 2011 assigning the functions of the proper officer to the Additional Director Generals, Additional Directors or Joint Directors or Assistant Directors in the DRI for the purpose of Sections 17, 28 and 28AAA of the Act. However, the said notification did not provide for the territorial limits of jurisdiction of the persons appo....
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....as been effected, 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." 08.04.2011 Pursuant to this, Section 28 of the Act was amended by way of the Finance Act, 2011. The amended Section 28 still provided that it is the "proper officer" who is empowered to issue a show cause notice and to adjudicate the same under the said provision. Explanation 2 to the amended Section 28 reads as under : Explanation 2:For the removal of doubts, it is hereby declared that any nonlevy, shortlevy or erroneous refund before the date on which the Finance Bill, 2011 receives the assent of the President, shall continue to be governed by the provisions of Section 28 as it stood immediately before the date on which such assent is received. 06.07.2011 The respondent no.2 issued Notification No.44/2011Cus (N.T.) assigning the functions of the "proper officer" inter alia to the Additional Director Generals, Additional Directors or Joint Directors or Assistant Directors in the DRI for the purpose of Sections 17, 28 and 28AAA of the Act. The said notification however did not provide for the territorial li....
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....ify the territorial limits of jurisdiction of the persons designated therein as proper officers for the purposes of Sections 17, 28 and 28AAA of the Act and is therefore, patently arbitrary, unreasonable, unconstitutional, de hors and violative of the provisions of law, vague, without application of mind, invalid and illegal inter alia since : (i) A notification conferring certain powers upon certain officers must be in regard to certain specific areas and cannot be vague as to the area of their jurisdiction. (ii) The powers/jurisdiction to be exercised under Sections 17 and 28 of the Act pertain to assessment and reassessment of customs duty payable on imported goods and therefore, involve an adjudicatory function which must be subject to territorial limits of jurisdiction. (iii) The powers/jurisdiction conferred by Section 28 of the Act involve satisfaction on the basis of material that customs duty has not been levied or is short levied or erroneously refunded, which power/jurisdiction, by its very nature, requires territorial limits of jurisdiction. (iv) The provisions of Section 28 of the Act can only be conferred on or available to officers....
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....th November 2014 is wholly without jurisdiction and void for the foregoing reasons since : (i) Section 28 (11) of the Act does not state that it operates notwithstanding anything contained in the Act and is therefore subject to Explanation 2 to Section 28 which provides that non-levy, Short-levy or erroneous refunded prior to the date on which Finance Bill, 2011 receives the assent of the President shall continue to be governed by the provisions of Section 28 as it stood immediately prior thereto. Reading these provisions together, it is clear that the respondent no.3 has no jurisdiction to exercise any power under Section 28 in respect of or covering a period prior to 8th April 2011 since the respondent no.3 was not a proper officer at that time and there was no provision akin to Section 28(11) during that period whereby he could be considered as deemed to be a proper officer. (ii) Section 28(11) cannot and does not validate show cause notices issued by the officers of DRI if it amounts to reopening of assessment of customs duty for a period prior to 8th April 2011. (iii) The show cause notice proposes redetermination of the value of the goods imported b....
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....rs and Zonal/Regional unit to the Commissioner of Customs. Further the Jurisdictional area for the Additional Director General defined is also mentioned therein as the Whole of India. From the above Notification it is clear that the Additional Director General, DRI, has been appointed as the Commissioner of Customs for the Jurisdiction of the Whole of India. Hence, the point raised by the petitioner that the Additional Director General does not have Territorial Jurisdiction is totally false and baseless. 4.2 Further, as per Notification No.44/2011Cus dated 6th July 2011 issued under Section 2(34) of the Customs Act, 1962 the Board has assigned the functions of the proper officer to the Addl. Director General, DRI for the purpose of Section 17 and Section 28 of the Customs Act, 1962. The issue raised by the petitioner that territorial jurisdiction has not been assigned in the Notification no.44/2011Cus dated 6th July 2011, also appears to a vague plea taken by them since section 2(34) of the Customs Act, 1962, does not mandate that the territorial jurisdiction of the proper officer should be defined at the time of assigning the functions of the proper officer. The section 2....
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....e pronouncement of the Supreme Court in case of Commissioner of Customs Vs. Saiyed Ali (supra) has not been clearly appreciated by the respondents inasmuch as the conferment of the jurisdiction upon the officer of DRI without there being a reference to the territorial jurisdiction would be leaving a room for rendering it vitiated. The impugned notices therefore, have been assailed on this account by the petitioners. 12. Learned counsel for the petitioners invited Court's attention to the relevant paragraph in the judgment of the Supreme Court in case of Commissioner of Customs Vs. Saiyed Ali (supra) to support the contention that the jurisdiction to decide or issue notices sought to be conferred upon DRI Officer by nominating them or describing them proper officer for the purpose of investigation or examination without any reference to the territory would therefore, not cloth them with the power to issue notice. 13. Learned counsel for the petitioner further submitted that the issue therefore, cannot be said to be not concluded on account of the notification produced on record with the affidavitinreply. Per contra, learned counsel for the petitioners further submitted tha....
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....e time of assigning the functions to a Customs Officer by the board or the Principal Commissioner of Customs or the Commissioner of Customs. 4.3 Subsequent to the Judgment of the Supreme Court of India dated 18.2.2011 in the case of the Commissioner of Customs Vs. Sayed Ali, reported in 2011(3) SCC 537, the Govt of India vide Notification No.44.2011Cus (NT) dated 6.7.2011 has assigned the functions of Section 28 of the Customs Act, 2961 to the Additional Director General, DRI. This effectively means that the powers under Section 17 and Section 28 of the Customs Act, 1962 can be exercised by the Additional Director General, DRI. In the instant case the Show cause Notice was issued to the petitioner on 7.11.2014 demanding Customs duty under Section 28 of the Customs Act, 1962 along with confiscation and penalties etc. Conjoint reading of both the said Notifications, effectively means that as on the date of issue of the said Show cause Notice i.e. 7.11.2014, the Additional Director General of DRI, had powers to function as a Commissioner of Customs for the territorial jurisdiction of the whole of India and as such the contention of the petitioner is totally false and baseless....