TaxTMI 
TaxTMI 
2021 (8) TMI 1236
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....ce under Section 28(4) of Customs Act, 1962 and that in the present case also the show cause notice culminating into the order-inoriginal dated 15.05.2015 has been issued by the Joint Director, DRI. In view of the averments made in the application, and also with the consent of Learned Counsel for both the parties, the main petition is taken up on board for hearing today itself. CWP-11287-2015 That the challenge in the present writ petition is to the order-inoriginal dated 15.05.2015 (P-10), which was passed in pursuance of the show cause notice dated 29.11.2012 (Annexure P-1) issued by the Joint Director, DRI, Ludhiana Regional Unit. Several issues have been raised in the present writ petition including the issue that the Joint Director, DRI is not the 'proper officer' and has no jurisdiction to issue the said show cause notice. It has specifically been stated that as per Rule 16 of the Customs and Central Excise Duties and Service Tax Drawback Rules 1995, only the 'proper officer' of the custom department can raise the demand. The relevant portion of para 17.C and 17.D of the writ petition, where the said issues have been raised are reproduced hereinbelow: - "C. That as per R....
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.... of any notification, notifying the Joint Director-DRI as proper officer, the Joint Director-DRI had no authority to issue Show Cause Notice. Therefore, the Joint Director-DRI had issued Show Cause Notice in question beyond his jurisdiction." It has further been stated that as per settled law, once the show cause notice has been issued by an incompetent authority, then the entire proceeding subsequent to the same, is also illegal in law. Reliance for the same has been placed upon the judgment of the Supreme Court in M/s Canon India Pvt. Ltd. (supra). The relevant portion of the judgment is reproduced herein below: - "1. This batch of statutory appeals (being Civil Appeal Nos.1827/2018, 1875/2018, 1832/2018 and 3213/2018) under Section 130E of the Customs Act, 1962 arises from a common final order of the Central Excise and Service Tax Appellate ('CESTAT') dated 19th December 2017 ('impugned order')." xxxxxxxx "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 Com....
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....er than the officer of the rank of the officer who initially took the decision to assess the goods. 13. Where the statute confers the same power to perform an act on different officers, as in this case, the two officers, especially when they belong to different departments, cannot exercise their powers in the same case. Where one officer has exercised his powers of assessment, the power to order re-assessment must also be exercised by the same officer or his successor and not by another officer of another department though he is designated to be an officer of the same rank. In our view, this would result into an anarchical and unruly operation of a statute which is not contemplated by any canon of construction of statute. 14. It is well known that when a statute directs that the things be done in a certain way, it must be done in that way alone. As in this case, when the statute directs that "the proper officer" can determine duty not levied/not paid, it does not mean any proper officer but that proper officer alone. We find it completely impermissible to allow an officer, who has not passed the original order of assessment, to re-open the assessment on the grounds that the dut....
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.... the Customs Act. In support of the contention that he has been so entrusted with the functions of a proper officer under Section 28 of the Customs Act, Shri Sanjay Jain, learned Additional Solicitor General relied on a Notification No.40/2012 dated 2.5.2012 issued by the Central Board of Excise and Customs. The notification confers various functions referred to in Column (3) of the notification under the Customs Act on officers referred to in Column (2). The relevant part of the notification reads as follows:- "[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii)] Government of India Ministry of Finance (Department of Revenue) Notification No.40/2012-Customs (N.T.) New Delhi, dated the 2 nd May, 2012 S.O. (E). - In exercise of the powers conferred by sub-section (34) of section 2 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise and Customs, hereby assigns the officers and above the rank of officers mentioned in Column (2) of the Table below, the functions as the proper officers in relation to the various sections of the Customs Act, 1962, given in the corresponding entry in Column (3) of the said Table: - ....
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....fficers 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. 22. In the above context, it would be useful to refer to the decision of this Court in the case of Commissioner of Customs vs. Sayed Ali and Another5 wherein the proper officer in respect....
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....provision that the 'proper officer' being subjectively satisfied on the basis of the material that may be with him that customs duty has not been levied or short levied or erroneously refunded on an import made by any individual for his personal use or by the Government or by any educational, research or charitable institution or hospital, within one year and in all other cases within six months from the relevant date, may cause service of notice on the person chargeable, requiring him to show cause why he should not pay the amount specified in the notice. It is evident that the notice under the said provision has to be issued by the 'proper officer'. 19. Section 2(34) of the Act defines a 'proper officer', thus: '2. Definitions.- (34) 'proper officer', in relation to any functions to be performed under this Act, means the officer of customs who is assigned those functions by the Board or the Commissioner of Customs;' It is clear from a mere look at the provision that only such officers of customs who have been assigned specific functions would be 'proper officers' in terms of Section 2(34) the Act. Specific entrustment of function by either the Board or the Commissioner of....
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....) should not be made inapplicable or treated as invalid and as to why the duty for an amount Rs. 1,57,86,220/- should not be demanded and recovered." xxxxxxxxxxx "9. The learned Senior Counsel appearing on behalf of the petitioners has brought to the notice of the court that during the pendency of the said writ petition, the Apex Court in the case of M/s. Canon India Private Limited vs. Commissioner of Customs reported in 2021 SCC Online SC 200 (in Civil Appeal No.1827/2018 and connected matters) has laid down the law as regards to the aspect of who is 'the proper officer' for the purpose of Section 28 of 'The Customs Act, 1962' and wherein the proceedings initiated by the Additional Director General of DRI who had issued the show-cause notice was declared invalid as he was not a 'proper officer' as defined under the Act and that the said judgment would enure to the benefit of the petitioners also insofar as orders-in-original that were passed which were the subject matter of litigation has commenced with show-cause notice dated 07.01.2008 which was issued by the Additional Director General of Directorate of Revenue Intelligence, Bengaluru ("DRI" for shor....