Customs, Excise and Gold Tribunal - Mumbai
Sayed Ali Handloom Carpet vs Commissioner Of Customs on 1 February, 2002
Equivalent citations: 2003(159)ELT235(TRI-MUMBAI)
ORDER G.N. Srinivasan, Member (J)
1. In these two cases certain carpet manufacturers/exporters situated at Varanasi were charged that they were misusing Import-Export Pass Book Scheme either by selling the goods cleared duty free or selling the passbook on premium in violation of the ITC restrictions imposed on such sale. The Marine and Preventive Wing of the Customs (Preventive) Commissionerate took up the investigations in respect of the appellants and issued show cause notice dated 27-8-1991 charging the appellants about the violations which they have committed. The appellants imported polyvinyl alcohol and dyes and they were charged of violating ITC restrictions mentioned above and thereby violating the provisions of the Customs Act, namely Section 111(d) and/or 111(o) of the Customs Act. The show cause notice required the appellants to show cause to the Additional Collector of Customs (Preventive), Mumbai. That 1991 notice was adjudicated by the Additional Commissioner of Customs resulted in adjudication order passed by the Additional Commissioner of Customs (Preventive), dated 3-2-1993 against which an appeal was filed before the Commissioner (Appeals) who passed Order No. 160/93, dated 14-12-1993 resulting in the issuance of further show cause notice dated 16-4-1994 calling upon the appellants to show cause to the Collector of Customs (Preventive), Mumbai for imposition of penalty under Section 112(a) and (b)(i)(ii) of the Customs Act and the said show cause notice also demanded duty under Section 28(1) of the Act. It resulted in the impugned order dated 19-8-1996 passed by the Commissioner of Customs (Preventive), Bombay whereunder the Commissioner confirmed the demand of duty of Rs. 5,07,274/-. He also ordered confiscation of two consignments of dyes sulphur blue and sulphur blue green valued at Rs. 1,34,118.52 and imposed a fine of Rs. 1.5 lakh. He also imposed penalty of Rs. 1 lakh on Sayed Ali, Partner of Handloom Carpet and penalty of Rs. 25,000/- each on Prabhudas Ganatra and Vikram Garodia. Hence the appeals by the assessee as well as the partner.
2. At the outset, representative of the appellant argued that the impugned order as well as the show cause notice signed by the Commissioner of Customs (Preventive) is without jurisdiction. He states that a notice could be issued only by a proper officer of Customs and not by any officer of Customs. He relies on the judgment of the Tribunal in Manohar Bros. (Capacitors) v. CC [1998 (98) E.L.T. 821] wherein the Tribunal has held that Collector of Central Excise, Bombay-Ill did not have jurisdiction to issue show cause notice demanding duty under the Customs Act even though he was designated as an officer of Customs. The said case also held that he could not have adjudicated the notice. In coming to the conclusion, it is argued, the said decision referred to the provisions of Section 4 of the Customs Act and Notification 58/92, dated 31-7-1992 which appointed Collector of Central Excise, Bombay-III as Collector of Customs. Learned DR adopted the reasoning of the impugned order.
3. We have considered the submissions made by the representative of the appellant. In Paragraphs 9.3, 9.4 and 9.6 of the said decision the Tribunal has held as follows :-
"9.3 The subject show cause notices are basically the notice issued Under the provisions of Section 28 of the Customs Act, 1962 and the said section provides for issuance of notice by the "proper officer". The proper officer is defined in Section 2(34) of the Act to mean "the Officer of Customs who is assigned those functions by the Board or the Collector of Customs''. The definition given, thus makes it clear that only such of the officers of Customs to whom the specific functions (in the instant case, the functions of Collection of duty) are assigned, would be the "proper officer" and he alone, to the exclusion of any other officer of Customs, is authorised to issue the notice of demand vide Section 28(1) of the Act. This conclusion is obvious as otherwise, either the words "officer of Customs" would have been used in Section 28(1) of the Act or the definition of "proper officer" would have been appropriately given. Specific assignment of particular functions is therefore, an essential criteria and only such of the officers who are specifically entrusted the functioning in that regard, could fall within the category of "proper officer".
9.4 Recourse is taken to the Notification No. S8/92-Cus. (N.T.), dated 31-7-1992 where, amongst others, Collector of Central Excise, Bombay-III has been appointed as Collector of Customs. The said notification mentions that he would be the Collector of Customs within his jurisdiction. The notification is issued in exercise of powers vested vide Section 4 of the Customs Act, 1962. By virtue of the notification, the Commissioner of Central Excise, Bombay-111 has become the Commissioner of Customs and as such the officer of Customs, but as already indicated earlier, all officers of Customs are not ipso facto, the proper officer and only those who have been "assigned those functions" fall within that category. Section 5 of the Art provides that all the officers of Customs may exercise powers and discharge duties conferred or imposed on him under the Act and Sub-section (2) thereof, empowers an officer of Customs to exercise powers and discharge the functions of the officer subordinate to him. These provisions also could not be brought into play unless it is either show that the Commissioner issuing notice was either conferred the duty or was an officer Superior, not cadrewise but as a functionary, to the officer of Customs who had been assigned the function of collection of the Customs duty.
9.6 With none of the criteria indicating the Commissioner of Central Excise and Customs to be the "proper officer" competent to issue notice for demand, vide Section 28(1) of the Customs Act, 1962, the show cause-cum-demand notices issued by him have to be held as without jurisdiction and hence, invalid and any adjudication proceedings initiated thereon have to be held as void."
4. From the reading of the above three paragraphs, it is very clear that the Commissioner of Customs (Preventive) does not have jurisdiction to issue the impugned show cause notice and in view thereof he could not have the jurisdiction to adjudicate the matter when imports have taken place at Bombay Customs House. Hence the impugned order is set aside and the appeals stand allowed, ordering consequential relief, if any, according to law.