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Executive Director, F. Seyad Rabbani Versus The Additional Director, Dept. of Revenue Intelligence, Chennai

2015 (11) TMI 1233 - MADRAS HIGH COURT

Challenge to summons issues - Power to issue summons - Fraudulent availment of EPCG Scheme by way of endorsing EPCG licences with unconnected exporter's shopping bills in the third party details for obtaining EODC from DGFT - Held that:- Senior intelligence officer can be construed as a gazetted customs officer as he has authority to issue summons. As per the decision of the Supreme Court reported in [2007 (3) TMI 265 - SUPREME COURT OF INDIA], the High Court should not interfere at the stage of .....

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e Respondents : Mr.R.Aravindan ORDER This Writ petition has been filed for issuance of a Writ of Certioari, calling for the impugned summon issued by the 2nd respondent in file No.DRI/CZU/TTN/48/05/INT-1/2015, dated 03.08.2015 and quash the same as illegal, incompetent and arbitrary. 2. The case of the petitioners is that the petitioners company is a manufacturer of spinning yarn and its related works. The company imported machines from the foreign countries through Tuticorin Sea Port. The compa .....

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ficates from the Central Excise Department. The company has obtained exemption from Customs Duty after fulfilling Export Obligation, imposed by the Ministry of Commerce, Indian Republic under Foreign Trade Policy and as per the policy of the Ministry of Commerce, the company has to export the allied materials to foreign countries either manufactured by the petitioners' company or through third party company, within a period of 8 years from the date of installation of the machineries. In orde .....

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scharge Certificate (EODC) has been issued to the petitioners company. The petitioners company made a submission before the Customs Authority at Tuticorin Sea Port for discharging of the duty for obtaining licenses and to cancel the Letter of Undertaking and also Bank Guarantee. The Assistant Commissioner of Indian Customs, Tuticorin Sea Port has passed an order discharging the petitioners from the customs duty and also directed the Bank and concerned department to cancel the Letter of Undertaki .....

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third party details for obtaining EODC from DGFT. The petitioners appeared before the 2nd respondent through the petitioner's company officials, the 2nd respondent has not permitted the petitioner's company officials to attend enquiry and again sent a summon dated 03.08.2015 stating that the petitioners have to appear for enquiry on 10.08.2015. 4. The contention of the petitioners is that the summons issued by the 2nd respondent is highly arbitrary, without application of mind and withou .....

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tion / concession under the Customs notification issued under Section 25(1) of the Customs Act, 1962 as applicable to the Export Promotion Capital Goods (EPCG) Scheme. As per the terms of customs duty exemption, the importer is required to undertake specific export obligation to the extent of eight times import duty saved and to fulfill other conditions prescribed in the exemption notification. 6. It is stated in the counter affidavit that the intelligence pointed out that the importer had obtai .....

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cates to the effect that the goods covered under shipping bills were manufactured by the petitioners. The factual position was that there is no commercial relationship or transaction between the third party exporters and the 2nd petitioner herein, had issued a false certificate certifying that the goods covered under shipping bills had been manufactured by the petitioners. 7. Based on the above, on 23.07.2015, the officials of DRI, Tuticorin and Madurai Regional Unit have verified the records ma .....

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the EODC from the JDGFT, they got the bond and Bank Guarantee, furnished at the time of import of the machinery under EPCG scheme and had then cancelled from the Custom House, Tuticorin. Evidences recovered from the petitioners indicate that they got the endorsement of their EPCG licences in the shipping bills of third party exporters on payment of a commission, calculated at the rate of 3% of the EO, to the third party exporters and officers connected with issuing EODC. The documents recovered .....

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It is stated that the Export Promotion Capital Goods (EPCG) Scheme has been framed to extend concessions in import duty on capital goods for promoting exports. The exporters shall be directed to export goods in the name of the EPCG licence holder. However, the export through third party as defined in Chapter 9 of the Policy is also permitted under the EPCG scheme. 10. Chapter 9 of the Policy defines the "Third-party exports" as exports made by an exporter or manufacturer on behalf of .....

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obligation discharged and shared the benefit. 11. It is stated that the summon had been issued to the Executive Director of the petitioners company directing them to appear before the authority. Subsequently, another summon was issued requiring the appearance of the petitioner on 03.08.2015. It is stated that the Central Board of Excise and Customs (CBEC) vide Circular No. 4/99-Cus dated 15.02.1999 has directed that Directorate of Revenue Intelligence (DRI) officers to undertake investigations .....

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at under Section 108 of the Customs Act, 1962, any gazetted officer of customs is empowered to summon any person either to give evidence or to produce documents or any other thing during enquiry. The Government of India vide notification No.31/97 Cus (N.T) dated 07.07.1997, in exercise of the powers conferred by sub section (1) of Section 4 of the Customs Act, 1962, all officers of the Directorate of Revenue Intelligence are the officers of customs. Therefore, the 2nd respondent is empowered to .....

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e investigation and only thereafter, show cause notice will be issued and then opportunity will be given to the petitioner to defend. Hence, the 2nd respondent prayed for dismissal of this Writ petition. 13. The only submission made by Mr.V.Kathirvelu, learned Senior Counsel appearing for the petitioners is that the summons has been issued by the Senior Intelligent Officer under Section 108 of the Customs Act, 1962. However, the Senior Intelligent Officer is not a competent person to issue such .....

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der Customs Act, 1962 and submitted that Senior Intelligent Officer has no power to function under Section 108 of the Customs Act. The learned Senior Counsel further submitted that Section 148 of the Customs Act deals about the issuance of summons and production of the documents. Section 108 speaks about any gazetted officer of the customs, who has the power to summon the concerned, either to give evidence or produce the documents for enquiry under the Act and the Senior Intelligence officer can .....

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f India has appointed all officers to the Directorate of Revenue Intelligence to be the officers of Customs. Therefore, the 2nd repsondent being the gazetted officer of the Customs, is empowered to issue summons under Section 108 of the Customs Act. 16. The learned standing counsel for the respondents relied on a learned Single Judge of this Court in W.P.(MD)No.12136 of 2014 (Abhishek Mundhra Vs. The Additional Director General, Directorate General of Revenue Intelligence, Chennai) wherein this .....

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Section 28 of the Act underwent an amendments by Customs (Amendment and Validation) Act, 2011, fistly on 08.04.2011, then again on 16.09.2011. By virtue of the amendment, sub section (11) was inserted to Section 28. Thus, the objection, which is being raised based on the decision in the case of Sayed Ali & Anr., (Supra) is no longer available in the light of the insertion of sub section (11) of Section 28 Thus it is submitted that by way of insertion of Sections 11 to 28, the Senior Intellig .....

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