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2019 (11) TMI 455

..... the authority and the power to issue the show-cause notice dated 2nd December, 2017? HELD THAT:- Section 4 of the said Act provides for appointment of any person to discharge the functions of, inter alia, the Commissioner of Customs. The breadth of this section is very wide. Considering the exigency, the government has the power to appoint, inter alia, any person as the Commissioner of Customs. This section provides a parallel and separate mode of recruitment distinct to the procedure mentioned in the said rules under Article 309, to the post of Commissioner. The said section laid down that any person could be appointed as Commissioner of Customs, not confining itself to appointments of “officers of Customs” as Commissioner or Principal Commissioner. Had that been so there could possibly been a source of conflict between the said sections of the Act and the Article 309 rules. For both the above reasons, the recruitment rules for recruitment, promotion and selection in the said 2016 rules do not apply, to the selection under Sections 4 and 6 of the said Act. In any event, there is in my opinion no conflict between the said Act and the rules. There is a well established p .....

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..... ined at the air cargo complex, Netaji Subhas Chandra Bose International Airport between 5th June, 2017 and 1st August, 2017. These nineteen consignments comprised of the above goods. Their value was about ₹ 195 crores. These officials found that they were being imported by gross mis-declaration of their description, quantity and value which resulted in large scale import duty evasion. This syndicate of illegal importers acted through a network of middlemen. Investigation revealed that Navneet Kumar, Deputy Commissioner, Vikky Kumar, Appraiser and Pranabananda Bala, Examining Officer (EO) actively aided this syndicate. They are all respondents in the above batch of appeals. The value of the illegally imported items was ₹ 2,97,08,400/-. In the bill of entry which came into the hands of the appellants later it was found that the total assessable value was declared to be only ₹ 7,45,305/-. Statements under Section 108 of the Customs Act, 1962 (the said Act) were obtained from the employees or agents of the customs brokers and the conniving customs officials. It came to light that this syndicate was large, operating from Kolkata and Delhi. There was a network of smuggl .....

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..... hich were conditions precedent to issuing a show-cause notice under Section 124 of the said Act. e) The show-cause notice showed pre-disposition of the appellants. They appeared to have pre-judged the allegations and made up their mind about the guilt of the persons charged. All the writ applications came up for hearing before a learned single judge of this court. Hearing was concluded on 6th June, 2018. It appears on examination of this judgment that all other grounds made out in the writ applications except the one questioning the jurisdiction of the Additional Director General of the Directorate of Revenue Intelligence, (hereinafter referred to as the Additional Director General) to issue a show-cause notice under Section 124 of the said Act, were abandoned. This will appear from the following passage in the said judgment: Although the parties wanted to canvass other points, the contentions of the parties were limited to the question of lack of jurisdiction of the Additional Director of Directorate of Revenue Intelligence to invoke the provisions of Section 124 of the Customs Act, 1962. The issue, therefore, that falls for consideration in the writ petitions is whether the Addit .....

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..... both learned counsel, in the appeals. I propose to dispose of all the appeals by this common judgment. The argument before the learned trial judge centered around whether the Additional Director General issuing the show-cause notice could be termed as a proper officer under the said Act, the proper officer being the only authorised officer to issue such a notice. On appeal this point was almost abandoned and a new point was raised by Mr. Shaktinath Mukherjee, learned senior advocate for the respondent writ petitioners, to which I shall refer immediately. Although this point was not raised before the court below, we entertained this argument on appeal, instead of remanding the matter back to the trial court for these reasons. We accepted the submission that this point was substantially a pure question of law. To decide on this point some rules and notifications had to be gone into which the appeal court could easily do. If that was done then the dispute between the parties would be finally resolved. Mr. Kapur, learned senior counsel for the appellants was very firm in his submission that because of the impugned judgment and order the entire process of issuance and adjudication of s .....

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..... cifies the classes of customs officers as follows: 3. Classes of officers of customs There shall be the following classes of officers of customs, namely:- (a) Principal Chief Commissioner of Customs; (b) Chief Commissioners of Customs; (c) Principal Commissioners of Customs; (d) Commissioners of Customs; (e) Commissioners of Customs (Appeals); (f) Joint Commissioners of Customs; (g) Deputy Commissioners of Customs; (h) Assistant Commissioners of Customs; (i) such other class of officers of customs as may be appointed for the purposes of this Act. On 7th July, 1997, in exercise of the powers conferred on it by sub-section 1 of Section 4 of the said Act, the Central Government inter alia, appointed all officers of the Directorate of Revenue Intelligence as officers of Customs. By a subsequent notification dated 7th March, 2002 inter alia the Additional Director General of Revenue Intelligence was appointed as the Principal Commissioner of Customs or Commissioner of Customs. On 22nd April, 2016 the Department of Revenue, Ministry of Finance, Government of India exercising its powers under the proviso to Article 309 of the Constitution made rules for the method of recruitment to variou .....

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..... been given to an officer of Customs not below the rank of an Assistant Commissioner of Customs to issue a show-cause notice. There is no reference to a proper officer. In those circumstances, the argument of the respondent writ petitioners or the finding of the learned judge that the impugned show-cause notice had not been issued by a proper officer has no basis whatsoever and is rejected outright. Examining Article 309, until a proper legislation is made, the President of India or the Governor or their nominees may make rules for the recruitment and conditions of service for the services and posts over which they have jurisdiction. The said Act was enacted in 1962, much prior to these rules. Section 4 provided that the Board may appoint such persons as it thinks fit as officers of Customs. The reference to such persons is very significant. This section gave wide powers to the Board to appoint any person as an officer in any class specified in Section 3 quoted above. This simply signified that considering the exigencies, the type, nature and extent of service required and the dearth of existing officers to work in those exigencies, the Board was given unfettered power to appoint an .....

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..... e Deputy Commissioner specified in Schedule I. This schedule only refers to the Principal and Commissioner of customs. The method of recruitment is by promotion on selection as provided in rule 5 read with Schedule III columns 3 and 4. First of all, this rule provided for filling up the vacancies in the Indian Revenue Service. Hence, if there was any vacancy in the post of Commissioner of Customs and Central Excise (Grade IV), Senior Administration Grade, it was to be filled up through a selection process by promotion. The Additional Director General was not appointed against any vacancy, in my judgment. Section 4 of the said Act provides for appointment of any person to discharge the functions of, inter alia, the Commissioner of Customs. The breadth of this section is very wide. Considering the exigency, the government has the power to appoint, inter alia, any person as the Commissioner of Customs. This section provides a parallel and separate mode of recruitment distinct to the procedure mentioned in the said rules under Article 309, to the post of Commissioner. The said section laid down that any person could be appointed as Commissioner of Customs, not confining itself to appoi .....

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..... suggest that instead of the allegations, findings of fact were made towards the persons charged. The difference between an allegation and a statement of fact or finding is that the former is subject to proof whereas the latter is a proved or true allegation, according to the maker. One has to scan the whole show-cause notice to ascertain its nature and purport, whether it makes allegations or records findings. It is true that from paragraph numbers 63 to 75 of the show-cause notice the statements made therein are described as discussion and findings. But paragraph No. 76 thereof clearly suggests that although the said statements were described as discussion and findings, they were mere allegations because the persons charged were called upon to show-cause why the seized goods should not be confiscated and penalty should not be imposed. They were also given an opportunity to inspect the documents relied upon, the details of which were provided in the show-cause notice. They were also asked to submit written replies with documentary evidence. Furthermore, they were requested to indicate whether they would like to be heard. A Customs officer issuing a show cause notice issuing a show- .....

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..... ar & Ors. Vs. Union of India reported in (1991) 1 SCC 544, Municipal Corporation, Jabalpur Vs. Om Prakash Dubey reported in (2007) 1 SCC 373 and State of Orissa and Ors. Vs. Prasana Kumar Sahoo reported in (2007) 15 SCC 129. State of M.P. and Ors. Vs. Lalit Kumar Verma reported in (2007) 1 SCC 575 were about appointments which were irregular for being non-compliant with the relevant rules framed under Article 309. State of U.P & Ors. Vs. Desh Raj reported in (2007) 1 SCC 257 was a case dealing with the same principle and relating to regularisation of service. In my judgment, although Section 4 of the said Act and the Article 309 rules operate in different fields, in this case there was compliance with both, as discussed above. The decision T. R. Pandey Vs. The Chief Commissioner, Andaman & Nicobar Islands of a division bench of this court reported in 1978 LAB I. C. Page 41 spoke about the functions that the officer-in-charge in question could perform and what functions he could not perform, under the relevant rules. The Division Bench remarked an officer appointed to perform the current duties of an appointment can exercise administrative or financial powers vested in t .....

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