Karnataka High Court
M/S Sri Meenakshi Apparels Pvt Ltd vs The Commissioner Of Customs on 30 August, 2010
Bench: N.Kumar, H.S.Kempanna
IN THE HIGH COURT OF KARNATAKA AT BANG1}LORE DATED THIS THE 30TH DAY OF AUGUST," _ : PRESENT : 'V L. . ' THE HON'BLE MR. JU:3TI_(_:E _ 1' . _ 1' _ THE I-ION'BLE MR. JU$1'IC E CS'I'A.N0. 4 OF 2007 ei/'u}V. c§TA.N§:5:VbF:2007 CSTA.No.4 OF 2007;:--.. f _ 'A ' H N Between: H M/s. Sri Meer;:7;.]z.shTiAppa'1'els'" Private Lizrxfit-e_di~«.. " j V" ' ~ N0.71,2'3§ F'::(_)O:r, " " S0naVTowe'1's_,' Millers R0ad;,~_ ' _ I~3ar1gal0re--56CV Represented by Di'1'e3ei-av; L0kesh."A_ VA V' V' " . "' Appellant V' _ Sr-i, B26. Cfiidahéinda Urs, Advocate) % The C-_)(_)l.'1"1'I1;I.iE":'V.SiOI'1(3I' of Customs (Adjudication), 2*" Flocbr, New Customs House, = A. }i3.a11aT'd Estate. V' _Mi3_mbai-400 O01. Respondent
{By Sri Y. Hari Prasad, Advocate) This CSTA is filed under Section 130(1) of the Customs Act, 1962 arising out of the order dated 21 '.'06.2006 passed in Final Order No.1074/2006, praying toi.,fo-finulate the substantial question of law stated therein and gsctwaside the Order of CESTAT, South Zonal Bench, Ban]galo'r.ej iifinal Order No. 1074/2006 dated 21.06.2006 that the S3;idl'Gr(i(:1Tl is' bad in law in the ends of justice and equity';"' = --- Q g ' CSTA.No.5 OF 2007 0 Between:
M / s. Sun Knitwear Private Limited, No.71, 2"" Floor, _ g --_ ,-- , Sona Towers, Millers Road, Bangalore--560,052. , Represented its Director;
Lokesh.
V Appellant [By Sri -ighidanandafill-s,iiAd\gocate) The V (Adjudication), ' _ I gnci Floor, "i°\*ew Customslliouse, Ballard E2state,«.. p Iiiumsbamoo 001; """
0' ll 0' it Respondent 0' ii' Sri Prasad, Advocate] =iHl=*=E¢** ;l'his CSTA is filed under Section 130(1) of the "Customs Act. 1962 arising out of the order dated 21.06.2006 ",passed in Final Order Nos. 1073/2006, praying to formulate the substantial question of law stated therein and set aside the Order of CESTAT, South Zonal Bench, Bangalore in Final V Order No.10'?3/2006 dated 21.06.2008 that the said order is bad in law in the ends ofjustice and equity. ' These CSTAS. coming on for Adrnissi.or1..'_f N.Kumar J., delivered the following: .. JUDQfl§§T These two appeals' 0' assessees, challenging V order' * 0 iéiiptpellate Tribunal, which of the Commissioner, who -'t~heA'0iiiat5ugned order ----in .original as _j
2. goods under claim for No.4/2007 received a sum draw back, whereas the assessee C:S'11'A'VNo.5/2007 received an amount of 0 -- as draw back. DR} investigations .re'Vfea1ed'.,tha:tv~'Ehe assessees had not received the export proeee_ds'within the period allowed. Therefore, show Aeaigsevvhfiotiees were issued under Rule 16/Ruie16--A of Customs and Central Excise Draw Back Rules, 0 2 "i995, [for short hereinafter referred to as the ''Rules''), V for recovery of the draw back amounts. Penalties under Section 117 of the Customs Act, 1962 {fc-r.__ short hereinafter referred to as the "Act") were also The Commissioner of Customs passed orders for recovery of the draw"hack« arnounts; _ However, he dropped the penal proceedingsolagainst, Challenging the said the appeals before the though initiation of show cause notices by :_the;Com:rniss'ioner__for" Customs is proper. he _t'o«.v.adjudicVate the dispute in question as vested with the Assistant Commissioneriiof Customs under Rule 16/ Rule 16--A of Thevmalso challenged the impugned order, dire'c»tingo' refccvery of the draw back amounts on merits. The T__r'ib-unal, after considering the various provisions of .. the the Notifications issued and also taking note of do Cthe': Rules held, by a Notification dated W1 March 2002 "in No.17/2002, the Directorate of Revenue Intelligence V (D.R.I] Officers are appointed as Customs'_.-Officers and therefore, by virtue of Section 5(2) a superior Customs Officer has the power duties conferred or imp0sed~"under V Officer of the Customs, who therefore, the Commissioner, of the jurisdiction to inVe¥stigatei'"the'jédisputetAregarding 'duty draw back also and the question of jurisdiction}. and against the assessees; is absolutely no meriféfililfi is concerned and therefore on' the appeals came to be dismissed: the same, the assessees are 'O V. be'fore'7thi"s~Courtinthese two appeals. O' "L6§.a.r1'1ed counsel for the assessees contends, though' 'theNotification conferred powers by virtue of sub -'Section [1] of Section 4 of the Act to appoint the O lf)i1'ector of Revenue Intelligence as the Commissioner of W-'Oustoms and authorises him to investigate the matter V by issuing show cause notice, that Notification cannot be read as conferring power on him to adjudicatethe dispute. Adjudication of dispute accordance with Rule 16/Rule; .l.6_--_A of the ivvliich' . confer powers only on the Assistant Customs or the Deputy"Cvcnimis'siorler_ the case may be, and therefore-. the order-pasised by the Commissioner of v*A"v\.ri*t.lj.1out jurisdiction and liable his contention, he also d.atedml5U1 February 1999, No.4/ 1999, where it is stated, of Revenue Intelligence Officers arejvempovvered to undertake investigation on 9 A c'ases7de'tected byflthern and to issue show cause notices land' investigations, the adjudication has to doriei}'by the concerned jurisdictional Additional xConirnissioners, Deputy Commissioners or Assistant ";_V'C-oinrnissioners of Customs, as the case may be and
----therefore, he submitted that the adjudication done by V. the Commissioner, in the light of the aforesaidwcircular is one Without jurisdiction. It was also -the dispute regarding duty draw back could adjudicated by the Tribunal a's"n0. the same before the Tribunal;._.
provision to Section 129~iX"the reasons, he wants the tofbevvvset aside.
4. Per contra, .v'99_a}Jpearing for the Revenue on by the assesseegé 9' the Notification dated 7th "Notification No. 19/ 1990 Whichzflis '-thecause""for':exp1anation by the Board in terms of N-0.94./1999. When the Notification K1990' stands superseded by Notification dated 71"
explanation offered by the Board, explaining the said circular also vanishes. That apart, Section 15(2) of the Act confers power on the superior 'Cues-toms Officers, unless they are prevented by express
-~-order by the Board, from discharging the functions of V. lower Customs Officers. Therefore, a reading of__._Section 4 (1) read with Section 5(2) of the Actj"'a.nd"'..,the Notification issued confer not only the investigate and issue a show" rcause _notic_eV on lithe»? V Director of Revenue Intelligence, but' also', confer' ;_5owers to adjudicate the dispute regarding when a Commissioner adj*u.,dicates regarding draw back and passes which an appeal liesfto' there is no merit in eitheriof hy the counsel for the asse,sVseVes;.A: it In "the aforesaid facts and the rival contentions,' the "short point that arises for our
- gconsitiieration is, A _ f'-,,'-Whether the Directorate of Revenue Intettigizence had the jurisdiction to adjudicate ' .. dispute regarding draw back and whether 'such order acyudzlcating the duty draw back is appealable to the Tribunal ? "
iv Rule 16-A of the Rules deals with Recovery of amount of draw back where export proceeds not realizejdi..:'Seetion 75 of the Act supercedes for Draw baclfgfl materials used in the manufa.ctu.r_eA oi': ; exported. However, if the or received less than p materials, then, theReven.iu'ef..c:afi'recover'vthfiiflfxiount of draw back paid to i.__6--A of the Rules provides for be recovered.
It provides is to be issued to the evidence of realization of exportpi-oceed's'.l'a"period of thirty days from the date, of re"ce_ipt~wof notice and where the exporter 'does lnotlpéroduce such evidence within, the said period 1 of tI*iirt3{daysl; the Assistant Commissioner of Customs oi'-«4._Deputy7Commissioner of Customs, as the case may be, shall pass an order to recover the amount of draw R paid to the claimant and the exporter shall repay " -"the amount so demanded within sixty days of the 1i/ 11 Government of India in the Ministry of finance (Department of Revenue} No.1 9/ 90/ 90--Customs {NIH}, dated the 26th April 1990, the Central Governrne_nt._ appoints the officers mentioned in column (2) *of=t'h'e C' Table below to be the Commissioner of cus:~om,.i__iii~.i Officers mentioned in column (3) thereof_*to bel'--thei "
Additional Commissioners or Joint coxnmissioners of C' Customs and Officers mentioned in colu:'nn: th'e.re'cf to be the Deputy Comm,-ésslioners or, Ass_istantr Commissioners of Customs _for the.areas--,rnentionedi-in 3 if the corresponding entry in colutnnat 1 I of the said Tab_le._ * with effect from the date to be noty > "ted b_u.vthes Central .' Government in the OjflCz'01{7.,a?ette;=w V ' Area of - WD:esignattonVof the Officers jurisdiction - V f 1 (1) A.= ._ 1 .13; (4) Whole of India'"5.._A:dditionagl -. "Afddit_iQnal Deputy Directors, H 5Directoi= Geriercd f..,Directors, or or Assistant oj"Reuen;ue ._ 'V Qfoiiit Directors, Directors, of tglnteliigence ~ 'V cf Directorate of Directorate of
---- ~ j. 'Revenue Revenue _He.adquarie:'s * Intelligence Intelligence " Ctf1_Cif " ' posted at posted at ' 'r~eg'ional Headquarters Headquarters VE£I'lL't3'.3. " . and and '-- Zonal/ regional Zonat/ regional units. units.
[N_oti£icat.ion No'.'i'7'/"2002--Cus.[N.T.), dated 7-3-2002} » _'i'-he1'e_f0re,.fV't'he Director of Revenue Intelligence has been '--co'n'ferretij--- ivith the power of the Commissioner of The power of such Officer to investigate and islsue show cause notice caiiing upon the assessee to Do 12 pay back the draw back is not disputed. What is disputed is the power of the said authority to the dispute. Reiying on the circular datedfi 1999, which is issued in pursuance No. 19/90 conferring the been held, though they power to investigate and issue sh'ow."causegnotice'; adjudication is to be done as per jurisdictional Commissioneigg. Addit'1'o'na1Aé::"99Cornriiissioners, Deputy V' 9 Commissioners of Custotns'; is issued to explain the effect of No.19/ 1990 has no legs to stand Notification No.19/ 1990 is Av5"yupei5C€de«;1 byiiwiotification No.7/2002. Section 5 of powers of Officers of Customs. Sub- Section of Section 5 provides, an Officer of Customs irnay "eicercise the powers and discharge the duties "",gVVc'oriferred or imposed under this Act on any other
-":Officer of Customs who is subordinate to him. M./, 13 Therefore, statutorily, it is provided that a higher"Off1cer can perform the functions and duties of a Officer. It is by virtue of the Director of Revenue Intelligence; f. Commissioner of Customs to investigate"and..issue*show cause notice, has adjuldirgated payment of duty on which reliance is placed absence of a Notification;v."§r_1ce in pursuance of Section Person so appointed has Section 5 (2) of the Act. the Tribunal has said and thfc;*refore';"it_:V1snot possible to accept the contention that 'l V' A Ijirector offlerenue Intelligence had no jurisdiction the dispute regarding duty draw back. AR~eliar_tceVl'.il'sl also placed on the judgment of the Apex x which has held that when a statute specifically 'fstates who should exercise the power, how power
--should be exercised and the same fashion is concerned, 14/ 14 there is no quarrel with the legal proposition. Section 5 [2] of the Act specifically provides that, a higherijfficer of the Customs also has the power to and duties of a lower OffiCf:I"'I' ip appointed under Sectionéi Section 5 (2) of the Act, 5urisdiction:,:to'"ei<erciseA the power of a subordinsatewit.Avorflae-..ioweAr"authority and therefore, the power Director of Revenue under the Act and with and therefore.
he and he has adjuvdicated
6. far the contention that the order byéépthe 'Cornmissioner of Customs, adjudicating Vof,,'.:duty draw back cannot be the subject rriatte_r'ot§7an appeal by the Tribunal is concerned, it is .. rnisconceived. The appeal provisions are contained in A "A._VVSec'tion 129--A of the Act, which reads as under:
i/ 15 129A. Appeals to the Appellate Tribunal:
(1) Any person aggrieved by any of the following orders may appeal to the Appellate order-- it A it C' A Clause (a) of sub --Sectioi:i C' or order passed by the Commissioner of Adjudicating Authority; {bi oi'sufh'l;Set;tion (1) of Section 129A dea1fis_.":"w'it:h passed by the COII1II1lSSi0I1€If._Of 128--A of the Act. The _pEfov§L1sio_. to"th'e_sai_d Selotiofi makes it clear, an ordeirvlpassetdby Commissioner of Appeals under'«S'e'::tior1_.1.»2V8_;A~..i_s"'n'ot appealable to the Appellate Tri_bunal.tuth_at'is'; a second appeal is not maintainable.
.-- revision Vtowlthe Central Government is provided v.i:'r1.rC.vtlifeeircumstances of the Case, the impugned o1"t:lery__pass'ed by the Commissioner of Customs is not in his appellate jurisdiction, but has passed the said order A' 'gas -an Adjudicating Authority, that is, order-- in-- original. 'V -----Against the said order, clause (a} of sub--Sect1'on (1) of \/t 16 Section I29--A provides appeal to the Appellate Tribgnal. Therefore, we do not see any merit in contention also. In the View we have taker:-A;':we..scVic-'a "
see any merit in both the appea1s"'a:e.-d the appeals are dismissed.