TMI Blog2020 (2) TMI 1137X X X X Extracts X X X X X X X X Extracts X X X X ..... e proceeded with. The petitioners could be said to be having not made-out a case for interference and the petition is required to be dismissed and accordingly the same is dismissed. It goes without saying that the observations made hereinabove are only for the purpose of examining the controversy in question and the same have no bearing upon the right of the petitioners to takeout all the submissions available under law while replying to the show cause notices and during the adjudication thereof - Petition dismissed. - R/SPECIAL CIVIL APPLICATION NO. 17710 of 2016 - - - Dated:- 20-2-2020 - HONOURABLE MR. JUSTICE S. R. BRAHMBHATT And HONOURABLE MR. JUSTICE A.G.URAIZEE DARSHAN M VARANDANI, MS AMRITA M THAKORE FOR THE PETITIONER MR DEVANG VYAS, MR NIKUNT K RAVAL , MR SUDHIR M MEHTA FOR THE RESPONDENT JUDGMENT ( PER : HONOURABLE MR. JUSTICE S. R. BRAHMBHATT ) 1. Heard learned advocates for the parties. 2. The petitioners have approached this Court by way of this petition under Article 226 of the Constitution of India with following prayers. (A) Your Lordships be pleased to issue a writ of or in the nature of mandamus or any other writ, order or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uation (Determination of Value of Imported Goods) Rules, 2007 and imposition of socalled differential customs duty amounting to ₹ 5,61,89,613/as also interest and penalty, and also proposing confiscation of the imported goods under Section 111 of the Act. By virtue of the said notice the petitioners were called upon to show cause to the respondent no.4. The petitioner has made voluntary payment of ₹ 1,00,00,000/in August 2014, which is noted in the show cause notice. 3.2 The petitioner filed detailed reply dated 11th February 2015 on merits, along with documents before the respondent no.4, disputing the allegations made in the said show cause notice. The petitioner at that time not aware of the legal position and controversy regarding jurisdiction of the DRI officers to issue show cause notice and therefore its reply did not contain the issue of jurisdiction of the respondent no.3 to issue the show cause notice. The petitioner recently came to know of an instruction dated 29th June 2016 issued by the respondent no.2 mentioning that the Hon'ble Delhi High Court had passed an order dated 3rd May 2016 holding that Section 28(11) cannot validate show cause notices o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssigning specific functions to various customs officer, which includes functions under Section 28 of the Act and with regard to territorial limits or areas of jurisdiction. 3.4 The Central Government in exercise of powers conferred under Section 4(1) of the Act, has appointed various officers of DRI as Customs Officers, but as per Section 2(34) of the Act, the Customs Officers were not designated as proper officer . However, by virtue of their appointments as Customs Officers, they were issuing show cause notices under Section 28 of the Act. This led a litigation to Supreme Court challenging the jurisdiction of such Customs Officers to issue show cause notices. However, in the case of Commissioner of Customs Vs. Saiyed Ali, reported in 2011 (3) SCC 537, the Hon'ble Supreme Court inter alia held that From a conjoint reading of Sections 2 (34) and 28 of the Act, it is manifest that only such a Customs Officer who has been assigned the specific functions of assessment and reassessment of duty in the jurisdictional area where the import concerned has been effected, by either the Board of the Commissioner of Customs, in terms of Section 2(34) of the Act is competent to issue n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stoms. - The petitioner understands that notifications have been issued from time to time in regard to assigning specific functions to various officers of customs, including functions under Section 28 of the Act. Moreover, from time to time, notifications are issued in regard to territorial limits or areas of jurisdiction. 07.03.2002 From time to time, the Central Government in exercise of powers conferred by Section 4(1) of the Act, has appointed various officers of DRI as Customs Officers. The last such notification is Notification No.17/2002Cus (N.T.) dated 7.3.2002. By virtue of such notifications, various officers of DRI were being appointed as Customs Officers under Section 4 of the Act but were not designated as proper officers as per Section 2(34) of the Act. - However, by virtue of their appointment as Customs Officers, they and other persons appointed as Customs Officers by way of such other notifications were issuing show cause notices under Section 28 of the Act. This led to various litigations challenging the jurisdiction of such Customs Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (1) of section 4 before the 6 th day of July 2011 shall be deemed to have and always had the power of assessment under section 17 and shall be deemed to have and always had been proper officers for the purposes of this section. 07.11.2014 Pursuant to certain investigations conducted and statements recorded in 2014, the respondent no.3, an authority in the Ahmedabad Zonal Unit of the DRI, issued a show cause notice dated 7.11.2014 upon the petitioners inter alia proposing redetermination, under the provisions of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 of the value of goods imported by the petitioner no.1 during the period from 2009 to 2013 through Jawaharlal Nehru Custom House, Nhavasheva, Maharashtra and imposition of socalled differential customs duty amounting to ₹ 5,61,89,613/as also interest and penalty. The show cause notice also proposed confiscation of the imported goods under Section 111 of the Act. The petitioners were called upon to show cause to the respondent no.4. 11.02.215 The petitioner filed a detailed reply dated 11.02.2015 on merits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout any territorial limits and would result in a chaotic situation where any officer can exercise powers under Sections 17 and 28 in respect of any import anywhere in the country and may also result in multiplicity of litigations in respect of the same import. (v) In case of the regular customs authorities which are exercising power under Sections 17, 28 the respondent no.2 itself provides for territorial limits or areas of jurisdiction and hence, it is patently arbitrary, highhanded and without application of mind to not provide for such territorial limits or areas of jurisdiction in regard to officers covered by the Notification No.44/2011Cus (N.T.) dated 6th July 2011,which has resulted in such officers exercising such powers/jurisdiction in respect of any and all areas. (vi) The said notification is therefore, ex facie vague since it fails to provide for the territorial limits or areas of jurisdiction of the various persons who have been conferred powers under Section 28 thereunder and is issued without any application of mind. 6. Learned advocate for the petitioners submitted that assuming without admitting that the Notification No.44/2011Cus (N.T.) dated 6t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer for the purpose of such provisions. 8. Learned advocate for the petitioners submitted that the impugned notification and show cause notice are even otherwise unconstitutional, contrary to the statute, illegal and invalid. It is further submitted that the impugned show cause notice is based upon the ground that it is without jurisdiction and hence the alternative remedy is not at all efficacious. It is submitted that the petitioners have no other alternative efficacious remedy available to them under law in respect of the subject matter of the present petition and the reliefs sought herein, if granted, would be adequate. 9. As against this, Shri Sudhir Mehta, learned advocate has filed counter affidavit on behalf of the respondent no.3, which reads as under : . 3. Based on intelligence that import of watermelon seeds was being undervalued by the petitioner, as case was booked by DRI, Ahmedabad against the petitioner on 12th August 2014. Inquiry in the case was conducted and a show cause notice F.No.DRI/AZI/GI02/ ENQ(INT09/ 14) 2014 dated 7th November 2014 was issued to the petitioner in respect of the imports made during 2009 to 2013 demanding customs duty amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1962 to the Additional Director General, DRI. This effectively means that the powers under Section 17 and Section 28 of the Customs Act, 1962 can be exercised by the Additional Director General, DRI. In the instant case, the show cause notice was issued to the petitioner on 7th November 2014 demanding customs duty under Section 28 of the Customs Act, 1962 alongwith confiscation and penalties etc. Conjoint reading of both the said Notifications, effectively means that as on the date of issue of the said show cause notice i.e. 7th November 2014, the Additional Director General of DRI, had powers to function as a Commissioner of Customs for the territorial jurisdiction of the whole of India and as such the contention of the petitioner is totally false and baseless. 4.4 The petitioner at para no.10 has referred to an instruction dated 29th June 2016 and requested the adjudicating Authority to keep the case in call book. Since the issue of whether the case has to be kept in call book or otherwise has to be taken by the respondent no.4, and as such respondent no.3 has no comment to offer on it. 4.5 Further in the case of SCA No.2894 of 2013 filed in the case of (1) M/s. Swati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not challenged the merits of the case instead prayed for the quashing of the Notification no.44/2011 Cus (NT) Dated 6.7.2011 on the grounds that the said Notification does not specify the territorial jurisdiction of the person designated therein as the proper officers for the purpose of section 17, 28 28AAA of the Act. 4.1 The petitioner has challenged the legal validity of the Show cause Notice dated 7.11.2014 issued by the respondent no.3 on the ground that the same is ex facia and without jurisdiction and illegal, which is false and baseless in as much by virtue of Notification no. 17/2002Cus (NT) dated 7.3.2002 issued under Section 4 of the Customs Act, 1962, the Central Board of Excise and Customs has appointed the Additional Director General, DRI posted at Hqrs and Zonal / Regional unit to the Commissioner of Customs. Further the Jurisdictional area for the Additional Director General defined is also mentioned therein as the Whole of India. From the above Notification it is clear that the Additional DIRector General, DRI, has been appointed as the Commissioner of Customs for the Jurisdiction of the Whole of India. Hence, the point raised by the petitioner that the Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection as this would go to the root of the matter. In the instant case, the averments made on oath have remained to be controverted and when it is only a show cause notice, which could be answered properly and the adjudication if permitted would not prejudice the petitioner in any manner. In that view of the matter, we are of the view that the show cause notice without rendering final opinion upon the aspect of the jurisdiction when prima facie appears to be not without any authority of law are required to be permitted to be proceeded with. 15. As a result thereof, the petitioners could be said to be having not made-out a case for interference and the petition is required to be dismissed and accordingly the same is dismissed. It goes without saying that the observations made hereinabove are only for the purpose of examining the controversy in question and the same have no bearing upon the right of the petitioners to takeout all the submissions available under law while replying to the show cause notices and during the adjudication thereof. 16. With these observations, the present petition is dismissed. Notice discharged. (S.R.BRAHMBHATT, J.) (A.G.URAIZEE, J.) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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