TMI Blog2015 (7) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... e for confiscation under Section 111 or 113 of the Act, is an act of smuggling as defined under Section 2(39) and where there is smuggling, Chapter 14 would get attracted. Section 113 provides for confiscation of goods attempted to be improperly exported and Section 122 refers only to the question of adjudication process and the limit of officers and it is only under Section 124, which says that before confiscating the goods or imposing any penalty, the show cause notice should be given to the person concern. The show cause notice runs to 41 pages and most of which are the summary of the statements given by the petitioner and other co-noticees, the material which was recovered the result of the search conducted in the residence etc. Therefore, this Court has no hesitation to hold that the show cause notice is neither pre-meditated nor pre-conceived rather it is an attempt to place all the facts, which have been recorded by the officers of the DRI in the course of investigation. Therefore, by elaborately setting out all the facts in the show cause notice in fact provides full and effective opportunity to the petitioner to put forth his objections to the show cause notice, which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 296 rectangular cut pieces of gold bars. The officers who had examined the same, found that the markings on the gold bars have been erased. However on a closure scrutiny, it appeared to contain foreign markings. The petitioner stated that he received the gold bars from one Mr. Goutham Chakraborty outside the Kolkata Airport and the gold bars were smuggled into India from Bangladesh and he had received the same through one Raju @ Mukesh of Kolkata, the foreign markings in the gold bars have been removed by his friend Goutham Chakraborty. Enquiry was done with the petitioner as to whether he is in possession of any documents for possession/import of the gold bars. The gold bars were examined by the approved Assayer, who is said to have stated that it is a foreign origin and the residential premises of the petitioner was also searched. Thereafter, the statements were recorded from the petitioner under Section 108 of the Act and further proceedings were taken and mahazar was prepared. The petitioner was arrested on 15-10-2013 and was produced before the Additional Chief Metropolitan Magistrate, EO-1, and remanded to Judicial custody. Subsequently, he was enlarged on bail. After the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs v. Sayed Ali Anr., reported in (2011) 3 SCC 537 = 2011 (265) E.L.T. 17 (S.C.) wherein the Hon ble Supreme Court held that only such of those officers of Customs, who have been assigned the specific functions would be proper officers in terms of Section 2(34) of the Act. That specific instruction assigning specific function by either the Board or the Commissioner of Customs is therefore, the governing test to determine whether an officer of Customs is proper officer . It is submitted that to get over the said decision, sub-section (11) was inserted in Section 28 of the Act and even in terms of sub-section (11) of Section 28, the power is for the purpose of exercise of the powers under Section 28 of the Act. By referring to Section 122 of the Act, it is submitted that the officers of DRI are not empowered to issue notice under Section 124 of the Act, that too without the prior approval. Therefore, the impugned show cause notice is wholly without jurisdiction. 5. On the second issue, the learned Senior Counsel elaborately referred to the allegations contained in the notice, more particularly in paragraphs 39, 40, 43, 43.2, 43.4, 43.5, 52, 54 and 57 and submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Customs respectively and therefore, these DRI officers are proper officers under the Customs Act and competent to initiate proceedings. It is further submitted that the Central Board of Excise and Customs (C.B.E. C.) by circular dated 15-2-1999, instructed that the officers of DRI of different categories have been notified and appointed as Commissioner of Customs, Deputy Commissioner of Customs or Assistant Commissioner of Customs for the act specified and these officers, therefore, can legally be entrusted with discharge of functions, normally performed by Commissioners, Deputy Commissioners or Assistant Commissioners of Customs in their jurisdiction, as the case may be. It was directed that the officers of DRI to undertake investigation of cases deducted by them and issue show cause notice on completion of investigation. Similar instructions were issued to officers of Directorate General Anti Evasion and in terms of the said circular, the respondents were competent to issue show cause notice and the adjudication will be done by the jurisdictional Commissionerate. Therefore, it is submitted that the respondent is competent to issue the impugned show cause notice proposing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and reasons, appended to the Customs (Amendment and Validation) Bill, 2011, the purpose of insertion of sub-section (11) of Section 28 was to clarify the true legislative intent that show cause notices issued by the Customs Officers i.e., officers of the Commissionerates of Customs (Preventive), DRI, DGCEI and Central Excise Commissionerates demanding Customs duty not levied or short-levied or erroneously refunded in respect of goods imported are valid, irrespective of the fact that any specific assignment of proper officer was issued or not and it is therefore proposed to amend retrospectively and to validate anything done or action taken under the said Act in pursuance of the provisions of the Act at all material times irrespective of issuance of any specific assignment on 6-7-2011. 9. It is further submitted that Section 124 of the Act only stipulates that no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of the goods or such person is given notice in writing with prior approval of the Officer of Customs not below the rank of Deputy Commissioner of Customs and in the case on hand, the impugned show cause notice does not viola ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t jurisdiction and secondly that the authority pre-judged and pre-decided the issue and no useful purpose would be served by responding to the show cause notice. On the question of jurisdiction, the learned Senior Counsel referred to Section 124 of the Act and submitted that to exercise the power under Section 124, there are twin requirements namely, the prior approval of the Officer of Customs not below the rank of an Assistant Commissioner of Customs has to be obtained and other being such approval should be by an Officer of Customs. The contention is that the respondent being an Additional Director of Directorate of Revenue Intelligence is not an Officer of Customs. That apart, there is nothing to show that prior approval has been obtained from the Officer of Customs not below the rank of an Assistant Commissioner, therefore, the show cause notice is vitiated for want of jurisdiction. To support such arguments, the definition of proper officer as defined under Section 2(34) is pressed into service and by relying on the decision in the case of Sayed Ali Anr., (supra), it is submitted that only such Officers of Customs, who have been assigned specific functions would be proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 112. The proposal for confiscation and penalty is in terms of the powers falling under Chapter 14 of the Act and for which purpose, the procedure required to be followed is Section 124 of the Act. Therefore, the contention of the learned Senior Counsel that the insertion of sub-section (11) to Section 28 is only with regard to the power exercisable under Section 28 of the Act and would not apply to Section 124 is not tenable in the light of the fact that the notifications referred to supra states that all officers of the Directorate of Revenue Intelligence to be Officers of Customs and the Notifications dated 26-4-1990, 6-7-2011 and 21-6-2012 and the Circulars dated 15-2-1999 and 23-9-2009, make it manifestly clear that DRI officials have been appointed as customs officers by in exercise of the powers conferred under Section 4(1) of the Act and the notification reads as follows :- Notification : 19/89-Cus., (N.T.), dated 26-Apr-1990 Appointment of D.R.I., Officials as Customs Officers In exercise of the powers conferred by sub-section (1) of Section 4 of the Customs Act, 1962 (52 of 1962), and in supersession of the notification of the Government of India in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods or imposing any penalty, the show cause notice should be given to the person concern. At this stage, it would be beneficial to refer to the decision of the Hon ble Supreme Court in the case of Union of India v. Jain Sudh Vanaspathi Ltd., (supra), wherein it has been held as hereunder :- 5. It is patent that a show cause notice under the provisions of Section 28 for payment of Customs duties not levied or short-levied or erroneously refunded can be issued only subsequent to the clearance under Section 47 of the concerned goods. Further, Section 28 provides time limits for the issuance of the show cause notice thereunder commencing from the relevant date is defined by sub-section (3) of Section 28 for the purpose of Section 28 to be the date on which the order for clearance of the goods has been made in a case where duty has not been levied; which is to say that the date upon which the permissible period begins to run is the date of the order under Section 47. The High Court was, therefore, in error in coming to the conclusion that no show cause notice under Section 28 could have been issued until and unless the order under Section 47 had been first revised under Section 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons made in the show cause notice. On a reading of the entire allegations in the show cause notice, it appears that the respondent has narrated the sequence of events, it is seen that the petitioner alone is not the only noticees and along with him, there are four other noticees. The officer has referred to the series of statements recorded from each of the noticees and other persons, who have been examined and has in fact elaborately set out all the statements and come to the prima facie conclusion that at one or more places the words admittedly , invariably , wilfully are sprinkled in the show cause notice. In my view mere use of these expressions by the respondent in the show cause notice by itself cannot be a basis to hold that the show cause notice has pre-judged the issue or it is a pre-meditated show cause notice or a foregone conclusion. In fact, the show cause notice runs to 41 pages and most of which are the summary of the statements given by the petitioner and other co-noticees, the material which was recovered the result of the search conducted in the residence etc. Therefore, this Court has no hesitation to hold that the show cause notice is neither pre-meditated n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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