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2022 (4) TMI 1259 - HC - CustomsJurisdiction - power of DRI to issue SCN - Proper Officer or not - Initiation of proceedings by respondent no.7 - validity of proceedings and inquiry/investigation conducted for the imports made by the petitioner at various Customs Stations under jurisdiction of respondent nos. 2 to 6 - Section 28(4) of the Customs Act, 1962 - HELD THAT:- While analyzing Section 28A(4) of the Customs Act, the Apex Court in M/s. Canon India Pvt. Ltd. [2021 (3) TMI 384 - SUPREME COURT] held that the provision must be construed as conferring the power of such review on the same officer or his successor who has been assigned the function of assessment. An officer who did the assessment could only undertake reassessment and after extensive analysis, the Court held that the entire proceeding initiated by the Additional Director, General of DRI by issuing show cause notices in all the matters are invalid, without any authority of law and liable to be set aside and accordingly, ensuing demands also have been set aside. It is noteworthy that before the Apex Court, it also examined the issue of limitation by considering the fact that a show cause notice under Section 28(4) could be issued within 5 years from the relevant date which means the date on which the goods were assessed and cleared in case the duty was not paid, short paid or erroneously refunded by reason of collusion or any misstatement or suppression of facts. On having found that the importer had not made any willful misstatement or suppression of facts, the Court therefore held that extended period of limitation of 5 years was not available to any authority to reopen under Section 28(4) as it was difficult to hold that there was any willful misstatement on facts. In case of COMMISSIONER OF CUSTOMS, KANDLA VERSUS M/S. AGARWAL METALS AND ALLOYS [2021 (9) TMI 316 - SUPREME COURT], the identical issue had arisen and the Apex Court in wake of the decision of Three Judges Bench of the Apex Court in M/s. Canon India Pvt. Ltd. had dismissed the appeals as the show cause notice was also issued by the Additional Director General, Directorate of Intelligence who is held to be not the proper officer within the meaning of Section 28(4) read with Section 2(34) of the Customs Act. The arguments advanced of there being no infirmity in appointment of the DRI officers as Customs Officers under Notification No. 17/2002 dated 07.03.2002 and the discussion on Section 6 for the entrustment of the functions of the officers of the customs on certain other officers which are the officers of the Central or State Government or a Local Body, by emphasizing on a conjoint reading of Sections 4 and 6 will surely not be within the purview of this Court. Thus, not only the binding decision of the Apex Court in case of Canon India will govern the fate of each matter where the issuance of show cause notice is by the DRI and in contravention of the ratio laid down, it is also for this Court to ignore such ratio by holding that this issue also could be approached in different ways. Nor would it make permissible to defend the action of the State on the ground of cause expounded in the show cause notice when the very authority as per the decision lacked authority to issue the same. This Court much awaited for the outcome of review which is pending - The amendment in the act has been brought on the statute and whether it can have effect retrospectively when in case of all these matters, show cause notices have been issued prior to the amendment having come into force is not the question to be deliberated upon as argued by both the sides. Show cause notice issued in each case by the DRI is quashed - Petition allowed.
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