TMI Blog2023 (2) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... he powers under section 6 of the Customs Act - Therefore, the show cause notice issued to the petitioner by the DRI is invalid and this decision would be binding to the Courts within the territory of India under Article 141 of the Constitution of India. Therefore, the show cause notice is urged to be quashed. Considering the fact that essential remedy of appeal is available and it is an efficacious remedy, this Court would prefer not to venture into examining these aspects. According to us, this contention can always be raised before the appellate authority who would also lead to adjudication on factual matrix. Another contention on the part of the petitioner is that he was not in India and was caught at New Delhi Airport and when the show cause notice was issued, it was served upon his wife. When he returned to India in February, 2016, he was caught in connection with another case and because of that he was not in a position to contest the allegations levelled in the show cause notice - HELD THAT:- Much emphasis is placed on the ground of violation of principles of natural justice, as penalty imposed here is based on the statement of co-accused and without any independent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be well appreciated by the Appellate authority as and when raised. Thus, what can be gathered is that service of show cause notice appears to be valid and thereafter also, couple of notices were served upon the petitioners for availing an opportunity of hearing at the time of adjudication of the show cause notice and it emerges prima facie that the petitioner has not participated. Whether the reasons put forth for non-participation, even through the authorised representative, could surely be agitated in appeal for the Appellate authority to adjudicate - it is not convincing that there has been any breach of principles of natural justice much less gross violation at the time of service and thereafter of adjudication of the show cause notice. However, the fact remains that the participation on the part of the petitioner was missing when OIO was finalized. Non-availment of opportunity for want of necessary pre-deposit required under section 29E of the Customs Act - HELD THAT:- The appellate authority could not adjudicate on merits. Therefore, the balance needs to be struck by allowing the petitioner to approach the appellate authority by furnishing the amount of predeposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was to be supplied to someone in the same hotel. However, before it was delivered, DRI officers seized the same. 6. Shri Juma Bhokal stated that out of the total six consignments of gold smuggled into India, 46.3 kgs of gold was seized at Surendranagar. Out of this, the total quantity of gold of 21.3 kgs was delivered to Shri Ramesh Kalabhai. 24 kgs was to be delivered to Ahmed Miya and one kg of gold was delivered to the petitioner's contact. 7. According to the petitioner from the passport details and the Visa issued by the Dubai Government, it is quite apparent that the petitioner during the period from 2014 to 2016 was staying at Dubai. 8. On 19.04.2016 the petitioner came to India from Dubai. He was initially arrested at New Delhi by the officers of DRI in connection with another case pertaining to Jamnagar. The Court in April, 2016 granted him bail. It is the say of the petitioner that statement under section 108 of the Customs Act, 1962 was recorded, which was never shared with the petitioner and, therefore, he would not be in a position to know about the pending proceedings against him. 9. The Principal Commissioner of Customs passed Order in Original (OIO) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was never there. According to the petitioner, OIO passed by Principal Commissioner is ex facie illegal and it is in utter disregard to the principles of natural justice. Moreover, the penal liability on the petitioner is on the basis of the statement of persons without any independent corroboration and that itself is an illegal act. This happened without being given any opportunity of being heard. The principles of natural justice being the backbone of any quasi judicial proceedings, according to the petitioner, any order passed by the adjudicating authority is ex facie illegal and in violation of the principles of natural justice. It is the grievance of the petitioner that he has not been given adequate and effective opportunity of being heard. Certain authorities are pressed in service to substantiate the version. Following are the prayers sought: 14. In the above premises, the petitioner most respectfully prays as under: - (A) That Your Lordships may be pleased to issue a Writ of Certiorari or any other appropriate Writ, Order or Direction quashing and setting aside OioKDL/COMMR/PVRR/123/2016-17 dated 31.01.2017 (Annexure- D ) passed by the Commissinoer of Customs, K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d bars of 100 grams each. It was apparent from the marking that the gold bars were of foreign made. Vide Panchnama dated 19.04.2014, the gold had been recovered. 14. In the meanwhile, another team of officers chased the person in Tata Indica car and availed the assistance of officers of Central Excise and Local Crime Branch (LCB), Surendranagar police. Juma Khamisha Bhokal and Hasam Tito were brought to LCB office at Gandhinagar and in presence of two independent panchas, a total of 25 kgs of gold were recovered. They also admitted that the gold bars were smuggled at Tuna Port at Kutch using sea route in a country craft vessel. Out of the total quantity, 21.300 kgs had been delivered to Ramesh Kalabhai Karmata at Hotel Regency, Chotila highway and remaining 25 kgs gold bars were with them. 15. It is grievance of the petitioner that the show cause notice was issued as to why the smuggled gold seized by DRI should not be confiscated under section 111 of the Customs Act. The show cause notice was served upon his wife (Reshma Ajij Sumbhainya) on 13.04.2015 and the name of the petitioner was mentioned in the dispatch register of the DRI. According to the petitioner, there was yet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smuggling of huge quantity of gold, in OIO, the penalty of Rs.1.27 crores has been imposed. According to the respondents, a show cause notice was handed over to his wife and four times personal hearing notices have been given. Thus, there is a sufficient opportunity of hearing made available to the petitioner and, there is no violation of principles of natural justice. Moreover, the mandatory predeposit of Rs.7.5% of the amount of penalty has not been deposited by him. Therefore, also his application was not maintainable. He chose not to appear before the Tribunal on the date of hearing and days of hearing also can be ascertained from the website of Tribunal and, therefore, his contentions are flimsy and false. According to him, the prosecution under sections 174 and 175 of the Indian Penal Code has been initiated against the petitioner, which is pending before the learned Chief Judicial Magistrate. As he never appeared before the Investigating Officer, no further details of involvement of other persons in repeated smuggling of gold could be ascertained. 17. So far as this petitioner is concerned, he has not filed affidavit-in-rejoinder, whereas in the group matters, others hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6) Rajkamal Textile Printery vs. Union of India, 2016 (332) E.L.T. 99 (Guj.). 7) ARCL Organics Ltd. vs. Commissioner of Central Excise, Kolkata-V, 2019 (366) E.L.T.55 (Cal.) 8) D.Jewel vs. Commissioner of Customs, Surat, 2019(366) E.L.T.106(Guj.). 9) Decision of this Court in the case of Commissioner of Customs vs. Pravin R. Ajudiya decided on 08.05.2019 in Civil Application(for stay) No.1 of 2019 in Tax Appeal No.59 of 2019. 10) Decision of Pravin R. Ajudiya vs. Commissioner of Customs of Gujarat High Court decided on 25.07.2019 in Civil Application(for direction) No.2 of 2019 in Tax Appeal No.59 of 2019. 11) Decision in the case of Dharmesh Pansuriya vs. Commissioner of GST and Central Excise, Surat decided on 03.04.2018 by this Court in Civil Application (OJ) No.2 of 2018 in Tax Appeal no.62 of 2018. 19. Mr. B.B.Naik, learned Senior Advocate appearing with Mr. P.S. Rachh for the petitioner has vehemently urged that these are the quasi judicial proceedings imposing huge monetary penalty and, therefore, the person, who recorded the statement also ought to have been a witness and, there has been non-supply of the documents and even non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be binding to the Courts within the territory of India under Article 141 of the Constitution of India. Therefore, the show cause notice is urged to be quashed. 23.1 Relevant findings and observations of the M/S.CANNON INDIA PRIVATE LIMITED V/S. COMMISSIONER OF CUSTOMS are necessary to be reproduced at this juncture profitably hereinbelow: 14. It is well known that when a statute directs that the things be done in a certain way, it must be done in that way alone. As in this case, when the statute directs that the proper officer can determine duty not levied/not paid, it does not mean any proper officer but that proper officer alone. We find it completely impermissible to allow an officer, who has not passed the original order of assessment, to reopen the assessment on the grounds that the duty was not paid/not levied, by the original officer who had decided to clear the goods and who was competent and authorised to make the assessment. The nature of the power conferred by Section 28 (4) to recover duties which have escaped assessment is in the nature of an administrative review of an act. The section must therefore be construed as conferring the power of such revi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Column (3) of the notification under the Customs Act on officers referred to in Column (2). The relevant part of the notification reads as follows:- [To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii)] Government of India Ministry of Finance (Department of Revenue) Notification No.40/2012-Customs (N.T.) New Delhi, dated the 2nd May, 2012 S.O. (E). In exercise of the powers conferred by sub-section (34) of section 2 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise and Customs, hereby assigns the officers and above the rank of officers mentioned in Column (2) of the Table below, the functions as the proper officers in relation to the various sections of the Customs Act, 1962, given in the corresponding entry in Column (3) of the said Table: - Designation of the Officers Functions under Section of the Customs Act, 1962 (2) (3) Commissioner of Customs (i) Section 33 Additional Commissioner of Customs (i) Sub-section (5) of Section 46; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred on the Central Government is obvious and that is because the Central Government is the authority which appoints both the officers of the Directorate of Revenue Intelligence which is set up under the Notification dated 04.12.1957 issued by the Ministry of Finance and Customs officers who, till 11.5.2002, were appointed by the Central Government. The notification which purports to entrust functions as proper officer under the Customs Act has been issued by the Central Board of Excise and Customs in exercise of non-existing power under Section 2 (34) of the Customs Act. The notification is obviously invalid having been issued by an authority which had no power to do so in purported exercise of powers under a section which does not confer any such power. 22. In the above context, it would be useful to refer to the decision of this Court in the case of Commissioner of Customs vs. Sayed Ali and Another wherein the proper officer in respect of the jurisdictional area was considered. The consideration made is as hereunder:- 16. It was submitted that in the instant case, the import manifest and the bill of entry were filed before the Additional Collector of Customs (Im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t made by any individual for his personal use or by the Government or by any educational, research or charitable institution or hospital, within one year and in all other cases within six months from the relevant date, may cause service of notice on the person chargeable, requiring him to show cause why he should not pay the amount specified in the notice. It is evident that the notice under the said provision has to be issued by the proper officer . 19. Section 2(34) of the Act defines a proper officer , thus: 2. Definitions.- (34) proper officer , in relation to any functions to be performed under this Act, means the officer of customs who is assigned those functions by the Board or the Commissioner of Customs; It is clear from a mere look at the provision that only such officers of customs who have been assigned specific functions would be proper officers in terms of Section 2(34) the Act. Specific entrustment of function by either the Board or the Commissioner of Customs is therefore, the governing test to determine whether an officer of customs is the proper officer . From a conjoint reading of Sections 2(34) and 28 of the Act, it is manifest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contents are affirmed by the person before the Commissioner. 26. It is also the say of the petitioner that Customs Excise and Service Tax Appellate Tribunal (CESTAT) dismissed the appeal for non-compliance of the requirement of pre-deposit as provided statutorily. Therefore, the petitioner has no remedy and the petitioner's property has also been attached. According to the petitioner, there are various decisions of the High Court that if a person is not in a position to give pre-deposit, the Court can consider his immovable property or any other reasonable opportunity of hearing the appeal be given, as the gold has been absolutely confiscated and the property also has been attached. Therefore, the Department has adequate security and the department would not suffer from any prejudice, if the adjudication is undertaken keeping in mind the principles of natural justice. 27. As the gold is not prohibited for import, therefore, the action of Commissioner in confiscating such gold is illegal, according to the petitioner. It is urged that Commissioner has failed to recognise the settled position that gold is not prohibited for import and it is only restricted. Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f quantity of the smuggled gold unloaded from Vessel MSV Al Ashaque- Al-Madina by one Bashir Khamisha Bhokal. It is also alleged that the smuggled gold of 8.800 kg valued at Rs.2.65 crores was found abandoned near Pir Sarkar Dargah, off Porbandar road, which was also part of gold smuggled through Vessel MSV Al Ashaque- Al- Madina. Statements have been recorded under section 108 of the Customs Act and they are sought to be relied upon by the department considering their admissibility under the law coupled with other corroborative evidences in the form of Panchnama, seizure of documents of hotel stay, arrival of vessel in India etc. 34. Denial of right to cross-examine the witnesses whose statements recorded under section 108 of the Customs Act and of those officers who recorded such statements is much emphasized upon. 34.1 Worthwhile would be to refer to the decision of the Apex Court rendered in the case of M/s. Kanungo Company vs Collector Of Customs And Ors. , (1973) 2 SCC 438, which has been followed later on by the Calcutta High Court also to deny the cross- examination. This authority also says that cross-examination is not an absolute right and what needs to be es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g lawful importation of watches twice before the writ petition was preferred and appropriate reliefs had been granted and yet, it failed to satisfy the Customs Authority that 280 watches were not imported in violation of the statutory restrictions. The Customs Authorities concluded that watches were illegally imported and, therefore, order for confiscation. It was not for the Court to revise or set aside or quash the order. One of the contentions was that of the persons from whom enquiries were alleged to have been made, the Authorities should have been produced to enable it to cross-examine them. The Court held that the principles of natural justice did not require that in the matter like the one before the Court, such persons who gave the information should be examined in presence of the appellant and should be allowed to cross-examine by them on the statement made before the Customs Authorities. Accordingly, the Court found no force in such contention. The Calcutta High Court followed the decision of Issardas Daulat Ram vs. Union of India, AIR 1965 SC 1867 and denied the cross-examination. 34.5 The cross-examination, in a given scenario, as was there before the Apex C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Industrial Development Corpn. v. Dosu Aardeshir Bhiwandiwala, it was observed by this Court in SCC p.175, para 30 that the Court while exercising its jurisdiction under Article 226 is duty-bound to consider whether the petitioner has any alternative or effective remedy for the resolution of the dispute. 38. With regard to non-availment of opportunity for want of necessary pre-deposit required under section 29E of the Customs Act, the appellate authority could not adjudicate on merits. Therefore, we are of the opinion that the balance needs to be struck by allowing the petitioner to approach the appellate authority by furnishing the amount of predeposits of the requisite amount. Resultantly, without making any interference with the OIO, all the petitioners are permitted to approach the appellate authority. Let the amount of pre-deposit be furnished in four weeks period and request, if any, comes from the petitioners to the Appellate authority to consider and regard the value of attached properties as adequate security at the time of furnishing pre-deposit, the same may be regarded, if permissible. Once the same is done, the authority concerned shall issue the notice on a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
