TaxTMI 
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2021 (8) TMI 178
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....call book in terms of the Master Circular bearing No.1053/02/2017-CX dated 10.03.2017 passed by the Central Board of Excise and Customs. The petitioner in W.P.No.4628/2018 is the Company, while the petitioner in W.P.No.10773/2018 is the Director of the Company. 3. The relevant facts are that the petitioner Company (in W.P.4628/2018) is stated to be engaged in the business of trading and manufacture of flavours and fragrances and is stated to be 100% subsidiary of M/s.Givaudan India Private Limited, Bengaluru, which in turn is a 100% subsidiary of Givaudan SA, Switzerland. 4. It is submitted that the petitioner Company in the course of its business had made certain imports which were subjected to scrutiny by the Special Valuation Branch, Chennai and an Order-in-Original came to be passed on 05.10.2004 at the first instance. 5. The Directorate of Revenue Intelligence ('D.R.I.' for brevity), Bengaluru had issued a show cause notice dated 07.01.2008 to show-cause as to why the Order-in- Original dated 05.10.2004 accepting the declared value of aromatic chemicals (FIBU Items) should not be made inapplicable or treated as invalid and as to why the duty for an amount of Rs. 1,5....
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....ng 'the proper officer'. It is contended that in light of the said judgment in M/s. Canon India Private Limited (supra), the impugned Order-in-Original dated 27.02.2017 which was culmination of the proceedings starting with the show-cause notice issued by an incompetent authority is liable to be set aside. 10. Sri. M.B.Nargund, the learned Additional Solicitor General appearing for the second respondent has argued extensively and has contended that the present proceedings by the petitioners is barred by the principle of res judicata, that the petition by virtue of its conduct ought not to be entertained in the present proceedings, that there is a substantive remedy by way of an appeal against the order impugned before the Tribunal and accordingly, the petitioners are to be relegated to such remedy before the Tribunal and that the judgment in M/s.Canon India Private Limited (supra), must be read in proper perspective as Section 28 (11) of the Customs Act, 1962 has not been adverted to and that further the court needs to take note of the fact that the judgment of the Delhi High Court in the case of Mangali Impex Ltd. & Others vs. Union of India & Others reported in 2016 (335....
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....isturbed and accordingly, the petitioners are not entitled for the relief sought for. It was further pointed out that the question of jurisdiction for issuance of show-cause notice and that the officer of the Directorate of Revenue Intelligence is not 'the proper officer', has not been taken note of at the first instance. 13. It was submitted on behalf of the petitioners while adverting to the contention of res judicata as putforth by the second respondent that the principle of resjudicata may not be applicable in taxation proceedings as the proceedings for every assessment year is a proceeding which could be construed to be a separate unit of adjudication and any order passed in the previous assessment years would not debar fresh consideration in a subsequent assessment year. Reliance is placed on the Constitution Bench judgment of the Apex Court in the case of Instalment Supply (Private) Ltd. vs. Union of India and Others reported in AIR 1962 SC 53. 14. Insofar as the contention of res judicata as raised by the Additional Solicitor General by placing reliance on the earlier round of litigation referred to supra, it is pointed out by the learned Senior counsel appearing ....
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....t in the case of Commissioner of Customs vs. Sayed Ali reported in 2011 (265) E.L.T. 17 (SC) and the subsequent amendment made to Section 28 including Section 28 (11) would only be prospective and this is made clear by virtue of Explanation 2 to Section 28 which clarifies that with respect to non-levy, short-levy or erroneous refund before coming into force of the Finance Bill 2011, the same would be continued to be governed by the provisions of Section 28 as it stood before the Finance Bill and if that were to be so, the contentions relating to the amendment made to Section 28 and specific reference to Section 28 (11) would not come to the aid of the Revenue. 17. It is also submitted that the Apex Court in the case of M/s.Canon India Private Limited (supra), has taken note of all the notifications made by the Government and while noticing that the notifications issued were under Section 2 (34) and that separate orders required to be made under Section 6 for entrustment of powers, has categorically come to the finding that the Officers of the Directorate of Revenue Intelligence are not the proper Officers. Accordingly, it is submitted that nothing more remains to be considered in ....
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....alf of the second respondent that the petitioners had not raised the objection to jurisdiction at the first stage of adjudication. (ii) It is not in dispute that the proceedings that were initiated at the first instance was remanded for fresh consideration to the authority as per the order dated 20.01.2016 and in such de novo enquiry, the contention regarding absence of jurisdiction has been raised. This comes out unequivocally on a perusal of the order dated 27.02.2017 enclosed at Annexure-'G' in W.P.No.4628/2018 wherein, at Para 40.1.1 the Principal Commissioner specifically considers the contention regarding jurisdiction while noticing the contention raised by the petitioners that DRI has no jurisdiction to issue show-cause notices. It is also to be noticed that the point of jurisdiction which goes to the root of the matter could be raised at any stage of the proceedings, which is a settled position of law. In fact, absence of jurisdiction to issue a show-cause notice if raised even after an assessment order is passed, such objection regarding jurisdiction of the authority if found in the affirmative would vitiate the whole proceedings including the assessment orders o....
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....quivocally dealt with the point of jurisdiction of the Officers of DRI in the context of proper officer and in light of the unequivocal findings made there is no necessity for any re-adjudication of such an issue and accordingly, the question of relegating the party to avail of the statutory remedy would not arise. 3) Res judicata: (i) As has been observed above, it is the contention putforth by the second respondent that the aspect in issue arising out of the show-cause notice dated 07.01.2008 cannot be relooked into in light of separate set of litigation culminating in the order of the Apex Court in the case of Givaudan India Pvt. Ltd. vs. Commissioner of Customs, Bangalore dated 11.12.2009 in Appeal No.C/652-655 & 533/2008 reported in 2010 (261) E.L.T. 975 (Tri.-Bang) wherein the present petitioner is also a party and certain findings were recorded between the same parties with respect to certain assessment years. (ii) As regards to the said contention, at the outset it must be noticed that the learned Senior Counsel appearing for the petitioners has submitted that the assessment proceedings for each year constitute separate unit of adjudication and any finding recorded as r....
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....e range of 3% to 375% during the period 2002 to 2007. The said undervaluation has been witnessed from the following: (i) The evidences such as the International price lists for FIBU items issued by Givaudan Suisse, S.A. Switzerland to VPL. (ii) FIBU items price lists issued to various independent Indian importers, which were unearthed from the seized documents, computers and documents recovered from the independent importers. (iii) Comparison of Imported Raw Material Prices with uncontrolled prices showing the percentage difference between FIBU prices sold to others and prices of FIBU products sold to VPL. These evidences were suppressed from Customs, Chennai and Bangalore as well as to Special Valuation Branch, Custom House, Chennai." (v) Clearly at the outset it comes out that the subject matter of the present dispute is relating to under valuation as referred to in Para 3 of the show-cause notice wherein it is asserted that scrutiny and investigation by the DRI reveal that imports of the petitioner company were stated to have been undervalued. It is specifically stated in Para 3 of the show-cause notice that during investigation of the offences of the case mentione....
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.... laid down by the Apex Court which goes to the root of the matter. In light of the law laid down by the Apex Court, the officer who has issued the show-cause notice clearly does not have jurisdiction and if that were to be so, the assessment orders are liable to be set aside on that sole ground. (ix) It is also pointed out at the time of dictating the order that the Apex Court in the case of Givaudan India Pvt. Ltd. vs. Commissioner of Customs, Bangalore reported in 2016 (337) E.L.T. A42 had also passed a similar order regarding applicability of tariff under Sl.No.119. It is not in dispute as noticed above that the present case relates to an issue of valuation and not with respect to applicability of certain tariff schedule and the orders referred above could not come in the way of petitioners agitating the issue of jurisdiction in the present round. 4) Suppression of Material Fact : (i) Though it is contended that the petitioners should not be permitted to avail of the equitable, discretionary jurisdiction under Article 226 of the Constitution of India in light of the conduct of the petitioners, it must be noted that the findings by the courts relating to wrong declaration or ....
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....issioner of Customs v. Sayed Ali and Another reported in (2011) 265 ELT 17. Subsequent to the judgment of Apex Court in Sayed Ali's case (supra), certain amendments were effected to the Customs Act, including the introduction of Section 28(11) inserted by the Customs (Amendment and Validation Act) 2011 with effect from 16.09.2011 to the effect that "..... all persons appointed as officers of Customs under sub-section (1) of Section 4 .....shall be deemed to have been and always had been the proper officers for the purposes of this Section." The effect of such amendments was considered by High Court of Delhi in the case of Mangali Impex Ltd. v. Union of India reported in 2016 (335) E.L.T. 605 (Del.), which once again reiterated that the amendment does not in any way alter the position insofar as the law laid down in Sayed Ali's case (supra). The judgment of the Delhi High Court, it is stated is pending consideration before the Apex Court in S.L.P.(C) No.20453/2016, wherein the judgment in Mangali's case has been stayed, by the Apex Court. (iii) It ought to be noted that the present judgment of Apex Court in the case of M/s.Canon India Private Limited (supra) passed in C....
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....strued as conferring the power of such review on the same officer or his successor or any other officer who has been assigned the function of assessment. In other words, an officer who did the assessment, could only undertake re-assessment [which is involved in Section 28(4)]." Accordingly, the Apex Court has held that Section must therefore be construed as conferring the power of such review on the same officer or his successor or any other officer who has been assigned the function of assessment. In other words, an officer who did the assessment could only undertake the re-assessment [which is involved in Section 28(4)]. (v) The Apex Court has also considered the aspect as to whether the Additional Director General of DRI who has been appointed as an Officer of Customs has been entrusted with the functions under Section 28 as 'the proper officer' under the Customs Act. The Court, after referring to the notification dated 02.05.2012 at paras-19 and 20 has concluded that the notification issued by the Central Board of Excise and Customs in exercise of power under Section 2(34) of the Customs Act would not be sufficient, as the said Section does not confer any power on th....