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2023 (1) TMI 909 - HC - CustomsJurisdiction of Customs Officers for seizure or recovery of material in a search carried out in a DTA - Smuggling - Clandestine movement of gold - search and seizure proceedings - HELD THAT:- Section 21 of SEZ Act deals with the notified offence or offence occasioning in an SEZ. The circumstances stated in the show cause notice are accepted as true and correct; it cannot be said that the subject violations happened in SEZ and were terminated in SEZ. Therefore, only the authorities under the SEZ Act have jurisdiction to act against the importer. In a situation as the present, this Court is of the view that for alleged unauthorized movement of goods/gold, the Development Commissioner etc., would have jurisdiction on the establishment and continuance of a unit in an SEZ and for importing goods/gold into DTA without paying customs duty, the Customs Department have jurisdiction on the information gathered in a DTA in the search carried by them. The CESTAT reasons that when two interpretations are possible, the interpretation favourable to a taxpayer must be accepted is entirely out of context. Jurisdiction, in fact, or law, irrespective of the nature of the enactment, has different manifestations. In the case on hand, the search and seizure have occasioned in DTA. Therefore, the Officers of the Customs Department, vis-à-vis the alleged illegality noted against both the importer and the individuals who handled the gold moved out of SEZ, have jurisdiction under Act 1962. The denial of jurisdiction to the Officers of the Customs Department for offences or violations noticed in DTA would enhance the area of an SEZ and diminish the jurisdiction of the Act 1962. There are two aspects for independent and objective consideration: search and seizure in DTA and, conversely, an investigation into commissions or omissions in an SEZ. The circumstance is that 4 Kg of gold was imported by the AGPL/importer when it had authorization and permission. The imported gold was lying in an uncleared area at the Air Cargo Complex at Nedumbassery, Cochin Airport. Stock, goods or gold lying in an uncleared area cannot be confiscated on the ground that upon completion of import, the said goods could also be used for a purpose otherwise provided for by law - the Order-in-Original, in anticipation of the 4 Kg of gold being misused or moved out of CSEZ, has been confiscated. It is considered that the reasoning of the CESTAT, insofar as 4 kg gold is concerned, is contextual, correct and tenable. Hence, to this limited extent, the said finding does not warrant interference. Application disposed off.
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