TaxTMI 
TaxTMI 
TaxTMI 
2021 (10) TMI 122
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....2 of 2018 i.e Deepak Gopaldas Bajaj acted as broker and both have wrongly used the DFRC at the time of import of different goods as the original DFRC was given for cotton goods to the original exporter and therefore, in this regard the respondent Customs issued a Show Cause Notice on 17.03.2009 under Section 28(1) of the Customs Act, 1962 (In short ''the Act''). 4. In response to the same, the petitioners had submitted their reply and after adjudication, a common adjudication order in these cases against the petitioners were passed by the respondent Customs on 28.08.2014. Challenging the same and the consequential order of detention notice in one case, these Writ Petitions were filed for the respective prayers. 5. Though these Writ Petitions were filed in the year 2018, at that time various grounds were raised on behalf of the petitioners, when these Writ Petitions are taken up for final hearing, Mr.G.Derrick, learned counsel appearing for the petitioners, among various grounds, has projected the prime ground i.e want of jurisdiction. 6. The reason being for raising the ground of want of jurisdiction is that, under Section 28 of the Customs Act, it has been speci....
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....on India case. On 16.03.2021, a learned Judge of this Court while disposing the writ petitions in W.P(MD)Nos.10186 and 10187 of 2014 in the matter of Quantum Coal Energy (P) Ltd Vs The Commissioner, Office of the Commissioner of Customs, Tuticorin has taken into account the law declared by the Hon'ble Supreme Court in Canon India case and ultimately allowed those Writ Petitions. 9. Subsequently in a very recent judgment the similar issue had come up for consideration before the Karnata High Court, where, the Court by order dated 14.07.2021 in W.P.No.10773 of 2018(T-CUS) and W.P.No.4628 of 2018 (T-CUS) in Shri Mohan C.Suvarna Vs. The Principal Commissioner of Customs, Air Commissionerate, Bangalore has extensively discussed the issue in question, where the applicability of the law declared by the Hon'ble Supreme Court in Canon India case reported in 2021 SCC online SC 200 has been considered and the Court ultimately has held that, if the Show Cause Notice is issued and the proceedings has been initiated under Section 28 of the Customs Act by the Directorate of Revenue Intelligence officials, since the said officials cannot be treated as proper officers, the entire proceedin....
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....se has held that, in that case the matter has gone to the Hon'ble Supreme Court only after exhausting appeal remedy available to the petitioner therein and here, since the petitioners approached this Court straight away by invoking the extraordinary jurisdiction under Article 226 of the Constitution of India, they can very well approach the appellate authority. 13. Placing heavy reliance on the judgment made by the learned Judge in Sri Sathya Jewellery case, the learned Standing Counsel would canvass to point out that, in the present case also these petitioners have challenged the order-in-original without exhausting the appeal remedy. Hence, they can very well approach the appellate authority by following the Sathya Jewellery case. Therefore, no exception can be taken to the said view taken by the learned Judge as the petitioners are similarly situated hence they can also be relegated to go before the appellate authorities if they have any presentable grounds against the order-in-original. 14. Making all these points, the learned Standing counsel for the respondents would further submit that, in fact in two Civil Miscellaneous Appeals, a Division Bench of this Court, in a re....
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..... 18. If the Directorate of Revenue Intelligence official initiated proceedings under Section 28(1) of the Customs Act, whether that would stand in the legal scrutiny or get vitiated was the prime question posed before the Hon'ble Supreme Court in Canon India case. 19. While considering the said issue, the Hon'ble Supreme Court has held as follows: 9. The question that arises is whether the Directorate of Revenue Intelligence had authority in law to issue a show cause notice under Section 28(4) of the Act for recovery of duties allegedly not levied or paid when the goods have been cleared for import by a Deputy Commissioner of Customs who decided that the goods are exempted. It is necessary that the answer must flow from the power conferred by the statute i.e. under Section 28(4) of the Act. This Section empowers the recovery of duty not paid, part paid or erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts and confers the power of recovery on "the proper officer". The obvious intention is to confer the power to recover such duties not on any proper officer but only on "the proper officer". This Court in Consolidated Coffee Ltd....
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....nue Intelligence who are officers of Central Government should be entrusted with functions of the Customs officers, it was imperative that the Central Government should have done so in exercise of its power under Section 6 of the Act. The reason why such a power is conferred on the Central Government is obvious and that is because the Central Government is the authority which appoints both the officers of the Directorate of Revenue Intelligence which is set up under the Notification dated 04.12.1957 issued by the Ministry of Finance and Customs officers who, till 11.5.2002, were appointed by the Central Government. The notification which purports to entrust functions as proper officer under the Customs Act has been issued by the Central Board of Excise and Customs in exercise of non-existing power under Section 2 (34) of the Customs Act. The notification is obviously invalid having been issued by an authority which had no power to do so in purported exercise of powers under a section which does not confer any such power. 23. We, therefore, hold that the entire proceeding in the present case initiated by the Additional Director General of the DRI by issuing show cause notices in a....
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....a was decided in regular appeal, and thus, the appellants had exhausted the appellate remedy provided under the Act, whereas, the petitioners in these writ petitions have not exhausted the alternate remedy and they have filed the writ petitions in order to avoid the Pre- Deposit as contemplated under the Statute. Therefore, the petitioners are not entitled for any relief. 23. In fact this view expressed by the learned Judge in Sathya Jewellery case, has been heavily relied upon by the learned Standing Counsel appearing for the respondent Customs. 24. The learned Judge in the said order has taken the view that, in Canon India case the petitioner/Appellants after having exhausted the appeal remedy had gone to the Supreme Court by way of Special Leave Petition. However in the case in hand before the learned Judge in Sathya Jewellery case, the petitioners had come to the High Court as against the order-in-original directly, therefore, the parties could be relegated to approach the appellate authorities. 25. However, the learned counsel for the petitioner in this context has relied upon a judgment of the Karnataka High Court which is a recent one dated 14.07.2021 in the matter of Sri....
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....ra) passed in Civil Appeal No.1827/2018 and connected matters is a judgment by a Bench consisting of Three Judges and has referred to the judgment in Sayed Ali's case (supra) in approval. (iv) The Apex Court in the case of M/s.Canon India Private Limited (supra) has specifically raised the question at para-9 of its decision, which reads as follows:- "9. The question that arises is whether the Directorate of Revenue Intelligence had authority in law to issue a show cause notice under Section 28(4) of the Act for recovery of duties allegedly not levied or paid when the goods have been cleared for import by a Deputy Commissioner of Customs who decided that the goods are exempted. It is necessary that the answer must flow from the power conferred by the statute i.e. under Section 28(4) of the Act. This Section empowers the recovery of duty not paid, part paid or erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts and confers the power of recovery on "the proper officer". The obvious intention is to confer the power to recover such duties not on any proper officer but only on "the proper officer". This Court in Consolidated Coffee Ltd.....
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.... any power on the Authority to entrust any functions of officer, and that Section 2(34) merely defines who 'the proper officer' is. (vi) The Apex Court has specifically observed that it is only Section 6 of the Customs Act which provides for entrustment of functions of Customs Officer on other officers of the Central or the State Government or local authority. At para-21 of the decision, it is specifically observed that the Central Government ought to have passed necessary orders under Section 6, if it was intended that officers of the Directorate of Revenue Intelligence were to be entrusted with the functions of Customs Officer. (vii) The Apex Court has further clarified that the notification which purports to entrust the functions as 'proper officer' issued by the Central Board of Excise and Customs in exercise of non-existing power under Section 2(34) of the Customs Act is invalid as also having been issued by the Authority which has no power to do so. (viii) Finally, the Apex Court after referring to the observations in the case of Commissioner of Customs v. Sayed Ali and Another reported in (2011) 3 SCC 537 has concluded at para-24 as follows:- "24. We,....
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.... Needless to state that there has to be finality once the law is laid down by a judgment of the Apex Court and any further deferment may not be justified. Further, if the Review Petition is disposed, the legal consequences would enure to the benefit of the parties involved. 26. Accordingly, the writ petitions are allowed. The Order-in-original Sl.No.BLR-CUSTM-AIR-003/16-17 dated 27.02.2017 at Annexure-G in both the writ petitions are set aside while holding specifically that the show cause notice at Annexure-B dated 07.01.2008 is one that is not issued by 'the proper officer'. The Authorities are at liberty to take out fresh proceedings as per law, in light of the discussion as above. 27. The oral request made by learned counsel appearing for respondent No.2 to keep the order in abeyance is refused, as the Court has passed the order on the basis of the judgment of Apex Court in the case of M/s.Canon India Private Limited vs. Commissioner of Customs reported in 2021 SCC Online SC 200, which is the law as on date. 26. In the said decision, all the queries/objections raised by the learned Standing Counsel appearing for the respondent Customs herein, including that, as aga....