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
TRIPTI SAINI
2025.01.20 16:55
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integrity of this document
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
TRIPTI SAINI
2025.01.20 16:55
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integrity of this document
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
2025.01.20 16:55
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integrity of this document
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
TRIPTI SAINI
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integrity of this document
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
TRIPTI SAINI
2025.01.20 16:55
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integrity of this document
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
TRIPTI SAINI
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integrity of this document
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
TRIPTI SAINI
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integrity of this document
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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integrity of this document
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
TRIPTI SAINI
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integrity of this document
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 TRIPTI SAINI 2025.01.20 16:55 I attest to the accuracy and integrity of this document 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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CWP-16779-2021 2021 (O&M) -12 12-
"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 Additional Director 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, that he 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 be appointed as Customs officer under the Customs Act. TRIPTI SAINI
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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 a Notification 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 notification reads 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) 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 TRIPTI SAINI 2025.01.20 16:55 I attest to the accuracy and integrity of this document CWP-16779-2021 2021 (O&M) -14 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 perform Deputy 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:TRIPTI SAINI
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CWP-16779-2021 2021 (O&M) -15 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 on certain 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 TRIPTI SAINI Finance and Customs officers who, till 11.5.2002, were appointed by 2025.01.20 16:55 I attest to the accuracy and integrity of this document CWP-16779-2021 2021 (O&M) -16 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 Additional Collector 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 by the 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 provides that:
"28.
28. Notice for payment of duties, interest, etc. - (1) When any duty has not been leviedd or has been short-levied levied or erroneously 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 so short-levied levied or part paid or to whom the refund has erroneously been 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 or TRIPTI SAINI suppression of facts by the importer or the exporter or the 2025.01.20 16:55 I attest to the accuracy and integrity of this document CWP-16779-2021 2021 (O&M) -18 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 tice 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 Secti Section on 2(34) the Act.
Specific entrustment of function by either the Board or the TRIPTI SAINI 2025.01.20 16:55 I attest to the accuracy and integrity of this document CWP-16779-2021 2021 (O&M) -19 19- 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 TRIPTI SAINI 2025.01.20 16:55 I attest to the accuracy and integrity of this document CWP-16779-2021 2021 (O&M) -20 20- 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 the Department 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 Central Board 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 notification referred to above thereby seriously affecting the correctness of the same same.
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CWP-16779-2021 2021 (O&M) -21 21- 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 after the 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 2025.01.20 16:55 I attest to the accuracy and integrity of this document CWP-16779-2021 2021 (O&M) -22 22-
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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CWP-16779-2021 2021 (O&M) -24 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 adjudicating authority 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 High Court 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 TRIPTI SAINI 2025.01.20 16:55 I attest to the accuracy and integrity of this document CWP-16779-2021 2021 (O&M) -25 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 High Court 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 involving issues pertaining g to the jurisdiction of the proper officer to issue 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 TRIPTI SAINI 2025.01.20 16:55 I attest to the accuracy and integrity of this document CWP-16779-2021 2021 (O&M) -26 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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integrity of this document