Punjab-Haryana High Court
Gautam Spinners vs Deputy Director, Directorate Of … on 9 January, 2025
Author: Sudeepti Sharma
Bench: Arun Palli, Sudeepti Sharma
CWP-16779-2021
2021 (O&M) -1-
201
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
-.-
Decided on 09.01.2025
1. CWP-16779
16779-2021 (O&M)
M/s Gautam Spinners ....Petitioner
VERSUS
Deputy Director, Directorate of Revenue
Intelligence (DRI), Ludhiana and Others ....Respondent
2. CWP-288
288-2023 (O&M)
M/sAllround
Allround (India) Vegetable
Processing Machine Pvt. Ltd. and another ....Petitioners
VERSUS
Union of India and Others
O ....Respondents
3. CWP-16751
16751-2021 (O&M)
Gautam International Through Its Proprietor .....Petitioner
VERSUS
Additional Director General, Directorate of
Revenue Intelligence and Another ....Respondents
4. CWP-12767
12767-2023 (O&M)
Tridev Overseas .....Petitioner
VERSUS
Union of India and Ors ....Respondents
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CWP-16779-2021
2021 (O&M) -2-
5. CWP-29325
29325-2022 (O&M)
Mahalaxmi Traders
raders .....Petitioner
VERSUS
Union of India and Ors ....Respondents
6. CWP-17888
17888-2021 (O&M)
M/s Dhown Woollen
oollen Mills .....Petitioner
VERSUS
Deputy Director, Directorate of Revenue
R
Intelligence (DRI),
DRI), Ludhiana and Another
A ....Respondents
7. CWP-18416
18416-2021 (O&M)
M/s PDG Wool
ool Traders and Another .....Petitioners
VERSUS
Deputy Director, Directorate of Revenue
R
Intelligence (DRI),
DRI), Ludhiana Zonal
Z Unit and Another
nother ....Respondents
8. CWP-26913
26913-2022 (O&M)
Sanjeev Textile
extile Woolen Mills .....Petitioners
VERSUS
Union of India and Ors ....Respondents
9. CWP-17857
17857-2021 (O&M)
Raghav Woollen
oollen Mills Pvt. Ltd. and Another .....Petitioners
VERSUS
Deputy Director, Directorate of Revenue
R
Intelligence (DRI)
DRI) and Another
A ....Respondents
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CWP-16779-2021
2021 (O&M) -3-
10. CWP-18276
18276-2022 (O&M)
Hero Electric Vehicles
ehicles Pvt. Ltd. .....Petitioner
VERSUS
Union of India and Ors ....Respondents
11. CWP-626
626-2022 (O&M)
M/s Aamamya Impex
I .....Petitioner
VERSUS
Union of India and Ors ....Respondents
12. CWP-16817
16817-2021 (O&M)
Gautam Spinners ....Petitioner
VERSUS
Assistant Director, Directorate of Revenue
Intelligence and Another ....Respondents
13. CWP-23088
23088-2021 (O&M)
M/s Avi International
nternational ....Petitioner
VERSUS
Union of India and Ors ....Respondents
14. CWP-11593
11593-2023 (O&M)
T R Knitters ....Petitioner
VERSUS
Union of India and Ors ....Respondents
15. CWP-24394
24394-2021 (O&M)
Ruby Knitting Corporation ....Petitioner
VERSUS
Directorate of Revenue
Intelligence and Ors.
TRIPTI SAINI
....Respondents
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CWP-16779-2021
2021 (O&M) -4-
16. CWP-14257
14257-2022 (O&M)
Gopi Fabrics Pvt
vt. Ltd. ....Petitioner
VERSUS
Union of India and Ors ....Respondents
17. CWP-12379
12379-2023 (O&M)
Rajesh Knitting
nitting Industries ....Petitioner
VERSUS
Union of India and Ors ....Respondents
18. CWP-12465
12465-2023 (O&M)
N.P. Textile Mills
ills ....Petitioner
VERSUS
Union of India and Ors ....Respondents
19. CWP-11853
11853-2023 (O&M)
Fine Knit Fab ....Petitioner
VERSUS
Union of India and Ors ....Respondents
20. CWP-12605
12605-2023 (O&M)
Unique Embroideries
mbroideries ....Petitioner
VERSUS
Union of India and Ors ....Respondents
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CWP-16779-2021
2021 (O&M) -5-
21. CWP-12645
12645-2023 (O&M)
Lotus Nets Pvt. Ltd.
L ....Petitioner
VERSUS
Union of India and Ors ....Respondents
22. CWP-12466
12466-2023 (O&M)
Top Knit Textiles
extiles ....Petitioner
VERSUS
Union of India and Ors ....Respondents
23. CWP-12661
12661-2023 (O&M)
K.B.Fabrics ....Petitioner
VERSUS
Union of India and Ors ....Respondents
24. CWP-8295
8295-2023 (O&M)
Inder International and
a Ors ....Petitioners
VERSUS
Union of India and Ors ....Respondents
25. CWP-710
710-2022 (O&M)
M/s Allround India Vegetable Processing
Machine Pvt. Ltd and Anr. ....Petitioners
VERSUS
Union of India and Ors ....Respondents
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CWP-16779-2021
2021 (O&M) -6-
26. CWP-12915
12915-2023 (O&M)
Shanker Industries ....Petitioner
VERSUS
Union of India and Ors ....Respondents
27. CWP-12880
12880-2023 (O&M)
Sudip Malik Mills ....Petitioner
VERSUS
Union of India and Ors ....Respondents
28. CWP-12841
12841-2023 (O&M)
D.K. Fashions ....Petitioner
VERSUS
Union of India and Ors ....Respondents
29. CWP-12802
12802-2023 (O&M)
Devgan Knit Fab ....Petitioner
VERSUS
Union of India and Ors ....Respondents
30. CWP-12663
12663-2023 (O&M)
Jai Shankar Knit Fab ....Petitioner
VERSUS
Union of India and Ors ....Respondents
31. CWP-11727
11727-2023 (O&M)
Sehgal Knitters ....Petitioner
VERSUS
Union of India and Ors ....Respondents
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CWP-16779-2021
2021 (O&M) -7-
32. CWP-11680
11680-2023 (O&M)
Star Milk Mills Pvt. Ltd. ....Petitioner
VERSUS
Union of India and Ors ....Respondents
33. CWP-17715
17715-2021 (O&M)
Raghav Woolen Mills Pvt. Ltd and
a Another ....Petitioners
VERSUS
Deputy Director Directorate Of Revenue
Intelligence DRI And Another ....Respondents
34. CWP-17320
17320-2021 (O&M)
M/SZee
Zee Knits And Weaves Private
Limited And Another ....Petitioners
VERSUS
Commissioner of
o Customs (Export) And Another ....Respondents
35. CWP-17324
17324-2021 (O&M)
M/s Worldwide Tradelinks And Another ....Petitioners
VERSUS
Commissioner of
o Customs (Export) And Another ....Respondents
36. CWP-17731
17731-2021 (O&M)
Raghav Woolen Mills Pvt. Ltd. And Another ....Petitioners
VERSUS
Deputy Director, Directorate
Directo of Revenue
Intelligence (DRI
DRI) And Another ....Respondents
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CWP-16779-2021
2021 (O&M) -8-
37. CWP-23537
23537-2016 (O&M)
M/s Jairath International & Anr.
Anr ....Petitioners
VERSUS
Union off India & Ors ....Respondents
38. CWP-16204
16204-2016 (O&M)
Rajesh Kumar Aggarwal ....Petitioners
VERSUS
Union off India & Ors ....Respondents
39. CWP-14039
14039-2023 (O&M)
Sureka Knitting Mills Through Its Partner
Sh. Nirmal Kumar Sureka ....Petitioner
VERSUS
Union off India & Ors ....Respondents
40. CWP-14037
14037-2023 (O&M)
R5 Fabb Pvt. Ltd. ....Petitioner
VERSUS
Union off India & Ors ....Respondents
41. CWP-13941
13941-2023 (O&M)
Kochar Woollen Mills Pvt.
Pvt Ltd. ....Petitioner
VERSUS
Union off India & Ors.
Ors ....Respondents
42. CWP-14229
14229-2023 (O&M)
Bhanu Embroideries ....Petitioner
VERSUS
Union off India & Ors.
TRIPTI SAINI
Ors ....Respondents
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CWP-16779-2021
2021 (O&M) -9-
43. CWP-13057
13057-2023 (O&M)
Shree Satguru Embroideries ....Petitioner
VERSUS
Union off India & Ors.
Ors ....Respondents
44. CWP-13056
13056-2023 (O&M)
V R Knitters ....Petitioner
VERSUS
Union off India & Ors.
Ors ....Respondents
45. CWP-14984
14984-2023 (O&M)
Universal Industries ....Petitioner
VERSUS
Union off India & Ors.
Ors ....Respondents
46. CWP-15112
15112-2023 (O&M)
Stylam Industries Ltd. ....Petitioner
VERSUS
Union off India & Ors.
Ors ....Respondents
47. CWP-13942
13942-2023 (O&M)
D K Overseas ....Petitioner
VERSUS
Union off India & Ors.
Ors ....Respondents
48. CWP-14214
14214-2024 (O&M)
Gupta G And Company ....Petitioner
VERSUS
Union off India & Ors.
Ors ....Respondents
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CWP-16779-2021
2021 (O&M) -10
10-
49. CWP-26231
26231-2016 (O&M)
Derby Overseas (P) Ltd. ....Petitioner
VERSUS
Union off India & Ors.
Ors ....Respondents
CORAM : HON'BLE MR. JUSTICE ARUN PALLI
HON'BLE MRS. JUSTICE SUDEEPTI SHARMA
Present: For the Petitioners
Mr. Saurabh Kapoor, Advocate and
Ms. Muskan Gupta, Advocate
Mr. Deepak Gupta, Advocate
Mr. Amrinder Singh, Advocate
For the respondents
Mr. Sourabh Goel, Sr. Standing Counsel with
Ms. Geetika Sharma, Advocate for the responde
respondents-Revenue.
Mr. Anshuman Chopra, Sr. Standing Counsel with
Mr. Deepesh Kakkar, Advocate and
Mr. Govinda, Advocate for the respondents
respondents-CBIC
Mr. Gurinderjit Singh, Sr. Panel Counsel
for respondents-GST.
respondents
-.-
SUDEEPTI SHARMA, J.
1. Since common question of law is involved in the above-numbered
numbered
writ petitions, therefore, we decide these writ petitions vide this common
judgment.
2. The challenge in the present writ petitions is to the show cause notices
issued under Section 28 of the Customs Act, 1962 by different DRI authorities on
the ground that they are not proper and competent officers to issue show cause
notices, in view of judgment passed by the Hon’ble Supreme Court in M/s Canon
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CWP-16779-2021
2021 (O&M) -11
11-
India Private Limited Vs. Commissioner of Customs [2021 SCC Online SC 200]
Civil Appeal No.1827
No of 2018 decided on 09.03.2021
09.03.2021.
3. Relevant portion of the judgment of Hon’ble Supreme Court in the
case of M/s Canon India Private Limited (supra)
(supra), is reproduced as under:-
“4.
4. The main issue is whether after clearance of the cameras on the
basis that they were exempted from levy of basic Customs duty
under Notification No.15/2012, the proceedings initiated by the
Directorate of Revenue Intelligence for recovery of duty not paid
under section 28(4) of the Customs Act, 1962 are valid in law
law.
* * * * *
9. The question that arises is whether the Directorate of Revenue
Intelligence had authority in law to issue a show cause notice under
Section 28(4) of the Act for recovery of duties allegedly not levied or
paid when the goods have been cleared for import by a Deputy
Commissioner of Customs who decided that the goods are exempted.
It is necessary that the answer must flow from the power conferred by
the statute i.e. under Section 28(4) of the Act. This Sec
Section
tion empowers
the recovery of duty not paid, part paid or erroneously refunded by
reason of collusion or any wilful mis
mis-statement or suppression of facts
and confers the power of recovery on “the proper officer”. The
obvious intention is to confer the powe
powerr to recover such duties not on
any proper officer but only on “the proper officer”. This Court in
Consolidated Coffee Ltd. and Another v. Coffee Board, Bangalore,
(1980) 3 SCC 358 has held:-
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“14. …Secondly, and more importantly, the user of the definite
article `the’ before the word `agreement’ is, in our view, very
significant. Parliament has not said `an agreement’ or `any
agreement’ for or in relation to such export and in the context
the expression `the agreement’ would refer to that agreement
which is implicit in the sale occasioning the export.”
In Shri Ishar Alloy Steels Ltd. v. Jayaswals Neco Ltd., (2001) 3 SCC
609 has held:-
“9. …’The’ is the word used before nouns, with a specifying or
particularising effect as opposed to the indefinite or
generalizing force of `a’ or `an’. It determines what particular
thing is meant; that is, what particular thing we are to assume
to be meant. `The’ is always mentioned to denote a particular
thing or a person.”
* * * * *
16. At this stage, we must also
o examine whether the AdditionalDirector General of the DRI who issued the recovery notice under
Section 28(4) was even a proper officer. The Additional Director
General can be considered to be a proper officer only if it is shown
that he was a Customs officer
of under the Customs Act. In addition, thathe was entrusted with the functions of the proper officer under section
6 of the Customs Act. The Additional Director General of the DRI can
be considered to be a Customs officer only if he is shown to have been
beappointed as Customs officer under the Customs Act.
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18.. The next step is to see whether an Additional Director General of
the DRI who has been appointed as an officer of Customs, under the
notification dated 7.3.2002, has been entrusted with the functions
under Section 28 as a proper officer under the Customs Act. In
support of the contention that he has been so entrusted with the
functions of a proper officer under section 28 of the Customs Act, Shri
Sanjay Jain, learned Additional Solic
Solicitor
itor General relied on aNotification No.40/2012 dated 2.5.2012 issued by the Central Board
of Excise and Customs. The notification confers various functions
referred to in Column (3) of the notification under the Customs Act on
officers referred to in Column
Column (2). The relevant part of the notificationreads as follows:-
follows:
“[To be published in the Gazette of India, Extraordinary, Part II,
Section 3, Sub-section
Sub (ii)]Government of India
Ministry of Finance
(Department of Revenue)
Notification No.40/2012
No.40/2012-Customs (N.T.)New Delhi, dated the 2nd May, 2012
S.O. (E). – In exercise of the powers conferred by sub
sub-section
section (34) ofsection 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
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CWP-16779-2021
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14-Act, 1962, given in the corresponding entry in Column (3) of the said
Table: –
Sr. Designation of the Functions under Section of the
No. officers Customs Act, 1962
(1) (2) (3)
1 Commissioner of Customs (i) Section 33
2. Additional Commissioner (i) Sub-section(5)
section(5) of Section 46;
or Joint Commissioner of and
Customs (ii) Section 149
3. Deputy Commissioner or (i) ....
Assistant Commissioner of (ii)....
Customs and Central (iii)....
Excise (iv)....
(v)....
(vi) Section 28; .....
19. It appears that a Deputy Commissioner or Assistant
Commissioner of Customs has been entrusted with the functions under
Section 28, vide Sl. No.3 above. By reason of the fact that the
functions are assigned to officers referred to in Column (3) and those
officers above the rank of officers mentioned in Column (2), the
Commissioner of Customs would be included as an officer entitled to
perform the function under Section 28 of the Act conferred on a
performDeputy Commissioner or Assistant Commissioner but the notification
appears to be ill-founded.
ill founded. The notification is purported to have been
issued in exercise of powers under sub
sub-Section (34) of section
on 2 of the
Customs Act. This section does not confer any powers on any
authority to entrust any functions to officers. The sub
sub-Section is part
of the definitions clause of the Act, it merely defines a proper officer,
it reads as follows:-
follows:
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15-“2.
2. Definitions – In this Act, unless the context otherwise requires, –
…
(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 [Principal Commissioner of Customs or
Commissioner of Customs].”
20. Section 6 is the only Section which provides for entrustment of
functions of Customs officer on other officers of the Central or the
State Government or local authority, it reads as follows:
follows:-
“6.
6. Entrustment of functions
functions of Board and customs officers oncertain other officers – The Central Government may, by notification
in the Official Gazette, entrust either conditionally or unconditionally
to any officer of the Central or the State Government or a local
authority any functions of the Board or any officer of customs under
this Act.”
21.. If it was intended that officers of the Directorate of Revenue
Intelligence who are officers of Central Government should be
entrusted with functions of the Customs officers, it was imperative
that the Central Government should have done so in exercise of its
power under Section 6 of the Act. The reason why such a power is
conferred 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
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Finance and Customs officers who, till 11.5.2002, were appointed by
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16-
the Central Government. The notific
notification
ation 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
non-existing
existing
power under Section 2 (34) of the Customs Act. The notification is
obviously invalid having
ha 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 Commission
Commissioner
er of Customs v. Sayed Ali and
Another, (2011) 3 SCC 537 wherein the proper officer in respect of
the jurisdictional area was considered. The consideration made is as
hereunder:
hereunder:-
“16. It was submitted that in the instant case, the import
manifest and the bill
ill of entry were filed before the AdditionalCollector of Customs (Imports), Mumbai; the bill of entry was
duly assessed, and the benefit of the exemption was extended,
subject to execution of a bond by the importer which was duly
executed undertaking the obligation of export. The learned
counsel argued that the function of the preventive staff is
confined to goods which are not manifested as in respect of
manifested goods, where the bills of entry are to be filed, the
entire function of assessment, cleara
clearance,
nce, etc. is carried out bythe appraising officers functioning under the Commissioner of
Customs (Imports).
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17. Before adverting to the rival submissions, it would be
expedient to survey the relevant provisions of the Act. Section
28 of the Act, which is relevant for our purpose, provides for
issue of notice for payment of duty that has not been paid, or
has been short-levied
levied or erroneously refunded, and providesthat:
“28.
28. Notice for payment of duties, interest, etc. – (1) When any
duty has not been leviedd or has been short-levied
levied orerroneously refunded, or when any interest payable has not
been paid, part paid or erroneously refunded, the proper officer
may,-
(a) in the case of any import made by any individual for his
personal use or by Government or by any educational, research
or charitable institution or hospital, within one year;
(b) in any other case, within six months, from the relevant date,
serve notice on the person chargeable with the duty or interest
which has not been levied or charged or whi
which
ch has been soshort-levied
levied or part paid or to whom the refund has erroneouslybeen made, requiring him to show cause why he should not pay
the amount specified in the notice:
Provided that where any duty has not been levied or has been
short-levied or the interest has not been charged or has been
part paid or the duty or interest has been erroneously refunded
by reason of collusion or any wilful mis
mis-statement
statement orTRIPTI SAINI
suppression of facts by the importer or the exporter or the
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18-agent or employee of the importer oorr exporter, the provisions of
this subsection shall have effect as if for the words `one year’
and `six months’, the words `five years’ were substituted.”
18. It is plain from the provision that the `proper officer’ being
subjectively satisfied on the basiss of the material that may be
with him that customs duty has not been levied or short levied
or erroneously refunded on an import 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 no
notice
ticeunder 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 Secti
Section
on 2(34) the Act.
Specific entrustment of function by either the Board or the
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Commissioner of Customs is therefore, the governing test to
determine whether an `officer of customs’ is the `proper officer’.
20. From a conjoint reading of Sections 2(34) and 228
8 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 affected, by either the Board or the
Commissioner
er of Customs, in terms of Section 2(34) of the Act
is competent to issue notice under Section
ection 28 of the Act. Any
other reading of Section 28 would render the provisions of
Section 2(34) of the Act otiose inasmuch as the test
contemplated under Section 2(3
2(34) of the Act is that of specific
conferment of such functions.”
23.. We, therefore, hold that the entire proceeding in the present case
initiated by the Additional Director General of the DRI by issuing
show cause notices in all the matters before us are invalid without
any authority of law and liable to be set
set-aside
aside and the ensuing
demands are also set-aside.”
set
4. Hon’ble Supreme Court in the case of M/s Canon India Private
Limited (supra) held that the show cause notices in all the matters are invalid,
without
ithout any authority of law and liable to be set aside and the ensuing demands are
also set aside.
5. The Commissioner of Customs filed Review Petition
etition No.400 of 2021
of Civil appeal No. 1827 of 2018 titled as Commissioner of Customs Vs. M/s
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Canon India Pvt. Ltd.
Ltd [2024 SCC Online SC 3188]
3188], and the same was decided on
07.11.2024. The relevant portion of the same is reproduced as under:
under:-
“F.
F. CONCLUSION
168. In view of the aforesaid discussion, we conclude that:
(i) DRI officers came to be appointed as the officers of customs vide
Notification No. 19/90-Cus
19/90 (N.T.) dated 26.04.1990 issued by theDepartment of Revenue, Ministry of Finance, Government of India.
This notification later came to be superseded by Notification No.
17/2002 dated 07.03.2002 issued by the Department of Revenue,
Ministry of Finance, Government of India, to account for
administrative changes.
(ii) The petition seeking review of the decision in Canon India (supra)
is allowed for the following reasons:
a. Circular No. 4/99-Cus
4/99 Cus dated 15.02.1
15.02.1999
999 issued by the CentralBoard of Excise & Customs, New Delhi which empowered the officers
of DRI to issue show cause notices under Section 28 of the Act, 1962
as well as Notification No. 44/2011 dated 06.07.2011 which assigned
the functions of the proper officer for the purposes of Sections 17 and
28 of the Act, 1962 respectively to the officers of DRI were not
brought to the notice of this Court during the proceedings in Canon
India (supra). In other words, the judgment in Canon India (supra)
was rendered
rendere without looking into the circular and the notificationreferred to above thereby seriously affecting the correctness of the
same
same.
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b. The decision in Canon India (supra) failed to consider the statutory
scheme of Sections 2(34) and 5 of the Act, 1962 respectively. As a
result, the decision erroneously recorded the finding that since DRI
officers were not entrusted with the functions of a proper officer for
the purposes of Section 28 in accordance with Section 6, they did not
possess the jurisdiction to issue show cause notices for the recovery of
duty under Section 28 of the Act, 1962.
c. The reliance placed in Canon India (supra) on the decision in
Sayed Ali (supra) is misplaced for two reasons – first, Sayed Ali
(supra) dealt with the case of officers of customs (Preventive), who,
on the date of the decision in Sayed Ali (supra) were not empowered
to issue show cause notices under Section 28 of the Act, 1962 unlike
the officers of DRI; and secondly, the decision in Sayed Ali (supra)
took into consideration
consideration Section 17 of the Act, 1962 as it stood prior to
its amendment by the Finance Act, 2011. However, the assessment
orders, in respect of which the show cause notices under challenge in
Canon India (supra) were issued, were passed under Section 17 of the
Act, 1962 as amended by the Finance Act, 2011.
(iii) This Court in Canon India (supra) based its judgment on two
grounds:
(1) the show cause notices issued by the DRI officers were invalid for
want of jurisdiction; and (2) the show cause notices were issu
issued
ed afterthe expiry of the prescribed limitation period. In the present judgment,
we have only considered and reviewed the decision in Canon India
TRIPTI SAINI
(supra) to the extent that it pertains to the first ground, that is, the
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jurisdiction of the DRI officers to issue show cause notices under
Section 28. We clarify that the observations made by this Court in
Canon India (supra) on the aspect of limitation have neither been
considered nor reviewed by way of this decision. Thus, this decision
will not disturb the findings
findings of this Court in Canon India (supra)
insofar as the issue of limitation is concerned.
(iv) The Delhi High Court in Mangali Impex (supra) observed that
Section 28(11) could not be said to have cured the defect pointed out
in Sayed Ali (supra) as the possibility of chaos and confusion would
continue to subsist despite the introduction of the said section with
retrospective effect. In view of this, the High Court declined to give
retrospective operation to Section 28(11) for the period prior to
08.04.2011 by harmoniously construing it with Explanation 2 to
08.04.2011
Section 28 of the Act, 1962. We are of the considered view that the
decision in Mangali Impex (supra) failed to take into account the
policy being followed by the Customs department since 1999 which
provides
ovides for the exclusion of jurisdiction of all other proper officers
once a show cause notice by a particular proper officer is issued. It
could be said that this policy provides a sufficient safeguard against
the apprehension of the issuance of multiple show cause notices to the
same assessee under Section 28 of the Act, 1962. Further, the High
Court could not have applied the doctrine of harmonious construction
to harmonise Section 28(11) with Explanation 2 because Section
28(11) and Explanation 2 operat
operate in two distinct fields and no
TRIPTI SAINI
inherent contradiction can be said to exist between the two.
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Therefore, we set aside the decision in Mangali Impex (supra) and
approve the view taken by the High Court of Bombay in the case of
Sunil Gupta (supra).
(v) Section
Section 97 of the Finance Act, 2022 which, inter
inter-alia,
alia,
retrospectively validated all show cause notices issued under Section
28 of the Act, 1962 cannot be said to be unconstitutional. It cannot be
said that Section 97 fails to cure the defect pointed out in Cano
Canon
n India
(supra) nor is it manifestly arbitrary, disproportionate and overbroad,
for the reasons recorded in the foregoing parts of this judgment. We
clarify that the findings in respect of the vires of the Finance Act,
2022 is confined only to the question
questionss raised in the petition seeking
review of the judgment in Canon India (supra). The challenge to the
Finance Act, 2022 on grounds other than those dealt with herein, if
any, are kept open.
(vi) Subject to the observations made in this judgment, the officers
officer
of Directorate of Revenue Intelligence, Commissionerates of
Customs (Preventive), Directorate General of Central Excise
Intelligence and Commissionerates of Central Excise and other
similarly situated officers are proper officers for the purposes of
Section 28 and are competent to issue show cause notice
Section
thereunder. Therefore, any challenge made to the maintainability of
such show cause notices issued by this particular class of officers,
on the ground of want of jurisdiction for not being the proper
officer, which remain pending before various forums, shall now be
officer,
TRIPTI SAINI
dealt with in the following manner
manner:
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24-a. Where the show cause notices issued under Section 28 of
the Act, 1962 have been challenged before the High Courts
directly by way of a writ petition, the respective High Court
shall dispose of such writ petitions in accordance with the
observations made in this judgment and restore such notices
for adjudication by the proper officer under Section 28.
b. Where the writ petitions have been disposed of by the
respective High Court and appeals have been preferred against
such orders which are pending before this Court, they shall be
disposed of in accordance with this decision and the show
cause notices impugned therein shall be restored for
adjudication by the proper officer under Section 28.
c. Where the orders-in-original
original passed by the adjudicatingauthority under Section 28 have been challenged before the
High Courts on the ground of maintainability due to lack of
jurisdiction of the proper officer to issue sshow
how cause notices,the respective High Court shall grant eight weeks’ time to the
respective assessee to prefer appropriate appeal before the
Customs Excise and Service Tax Appellate Tribunal
(CESTAT).
d. Where the writ petitions have been disposed of by tthe
he HighCourt and appeals have been preferred against them which are
pending before this Court, they shall be disposed of in
accordance with this decision and this Court shall grant eight
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25-weeks’ time to the respective assessee to prefer appropriate
appeals before the CESTAT.
e. Where the orders of CESTAT have been challenged before
this Court or the respective High Court on the ground of
maintainability due to lack of jurisdiction of the proper officer
to issue show cause notices, this Court or the respecti
respective
ve HighCourt shall dispose of such appeals or writ petitions in
accordance with the ruling in this judgment and restore such
notices to the CESTAT for hearing the matter on merits.
f. Where appeals against the orders
orders-in-original
original involvingissues pertaining
g to the jurisdiction of the proper officer toissue show cause notices under Section 28 are pending before
the CESTAT, they shall now be decided in accordance with
the observations made in this decision
decision.
169. In view of the aforesaid, we allow the Review Petition No.
400/2021 titled Commissioner of Customs v. M/s Canon India Pvt.
Ltd. and the connected Review Petition Nos. 401/2021, 402/2021
and 403/2021 insofar as the issue of jurisdiction of the proper
officer to issue show cause notice under Sect
Section
ion 28 is concerned. As
discussed, the findings of this Court in Canon India (supra) in
respect of the show cause notices having been issued beyond the
limitation period remain undisturbed
undisturbed.”
6. In view of the above we dispose of all the above referred to writ
petitions in accordance with the decision of Hon’ble Supreme Court in Review
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26-
Petition No 400/2021 titled Commissioner of Customs v. M/s Canon India Pvt.
Ltd. and other connected review petitions
p [2024 SCC Online SC 3188]
3188].
7. Since
ince in all the above referred to writ petitions show cause notices
issued under Section 28 of the Act 1962 have been challenged
challenged, the present writ
petitions are disposed of by restoring such notices for adjudication by the proper
officer under Section 28 of the Act, 1962.
8. Since in the impugned notices in the present writ petitions the period
of 30 days was granted to file reply and further proceedings were stayed by this
Court, therefore, all the petitioners are directed to file reply within a per
period
iod of 30
days. The time limit of 30 days granted to all the petitioners for filing reply in the
impugned notices would start from the date of receipt of copy of this judgment.
The respondents are further directed to adjudicate the matter in accordance with
wi
law.
9. Disposed of accordingly.
10. Pending applications, if any, also stand disposed of.
(ARUN
ARUN PALLI)
PALLI (SUDEEPTI SHARMA)
JUDGE JUDGE
January 09, 2025
tripti
Whether speaking/non-speaking
speaking/non speaking : Speaking
Whether reportable :YYes
TRIPTI SAINI
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