Legal principle

An officer appointed by the Board as common adjudicating authority remains a 'proper officer'/officer of Customs competent to adjudicate the show cause notice assigned to him, and there is no right to cross-examine investigation witnesses before adjudication proceedings commence.

Court decision

The High Court held that Respondent No.2 had jurisdiction to issue the impugned show cause notice and Respondent No.4 had jurisdiction to adjudicate it; the reliefs of quashing were declined, and the alternative mandamus seeking pre-adjudication documents and cross-examination was refused, the Court being in full agreement with Parmarth Iron Pvt. Ltd. All three writ petitions were dismissed, in favour of the Revenue.

Facts

M/s Sultan Tanneries and Leather Products and two allied companies exported four consignments described as 'finished leather made out from buffalo hides' to Italian buyers via Nhava Sheva Port between 01.04.2006 and 30.11.2009, claiming export duty exemption @60%, duty drawback and DFIA benefits. DRI concluded the shipments were actually semi-finished leather, making the exemptions and incentives inadmissible. Accordingly, the Commissioner of Customs (Export), Jawaharlal Nehru Customs House (Respondent No.2) issued a show cause notice dated 22.06.2011 proposing confiscation of goods (declared FOB value Rs.1,59,69,201), recovery of export duty of Rs.95,81,520 with interest, denial of DFIA benefits, recovery of import duty forgone of Rs.1,89,47,771, and joint and several penalties under Sections 114, 114A, 114AA and 117 of the Customs Act. By Board order dated 20.11.2012 the Respondent No.3/4, Commissioner CGST and Central Excise, Kanpur, was appointed Common Adjudicating Authority, prompting the petitioner to challenge his jurisdiction after the CGST Act, 2017 came into force.

Key provisions

• Section 28, Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded
• Section 17, Customs Act, 1962 — Assessment of duty
• Rule 16, Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 — Repayment of erroneous or excess payment of drawback and interest
• Section 4, Customs Act, 1962 — Appointment of officers of customs
• Section 6, Customs Act, 1962 — Entrustment of functions of Board and customs officers on certain other officers
• Section 75, Customs Act, 1962 — Drawback on imported materials used in the manufacture of goods which are exported
• Section 28AAA, Customs Act, 1962 — Recovery of duties in certain cases
• Section 2(1), Customs Act, 1962 — Definitions
• Section 3, Customs Act, 1962 — Classes of officers of customs
• Section 5, Customs Act, 1962 — Powers of officers of customs
• Section 111(d), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 152, Customs Act, 1962 — Delegation of powers