Proper Officer - Specific entrustment of function necessary

Proper Officer: Specific entrustment of function necessary   
http://164.100.9.38/judis/bitstream/123456789/20746/1/37564.pdf Supreme Court of India Commr. Of Customs vs Sayed Ali & Anr. on 18 February, 2011 [Since rectified by the CBEC with retrospective effect - RIIF]

Act: CUSTOMS ACT, 1962: Section 2(34) and 28 read with s. 111 (d) - "Proper officer"-Notice for payment of duty, interest etc. - Issued by Collector of Customs (Preventive) - Propriety of - HELD: Only such a Customs Officer who has been assigned the specific functions of assessment and re-assessment of duty in jurisdictional area, where the import concerned has been affected, by either the Board or the Commissioner of Customs in terms of s.2(34), is competent to issue notice u/s 28 - Specific entrustment of function by either the Board or the Commissioner of Customs is, therefore, the governing test to determine whether an "officer of customs" is the "proper officer"- In the instant cases, the import manifest and the bill of entry having been filed before the Collectorate of Customs (Imports) Mumbai, the same having been assessed and clearance for home consumption having been allowed by the proper officer on importers executing bond, undertaking the obligation of export, the Collector of Customs (Preventive), not being a "proper officer" within the meaning of s. 2(34) of the Act, was not competent to issue show cause notice for re-assessment u/s.28 of the Act - Notifications No. 250- Cus and 251-Cus dated 27.8.1983. Civil Appeal Nos. 4294-4295 of 2001 arose out of the notice issued to assessee-respondent No.2, a partnership firm engaged in the business of carpet manufacture, by Collector of Customs (Preventive) on 16.4.1994 asking the assessee to show cause as to why goods under seizure be not confiscated and customs duty be not levied in terms of s. 28 (1) of the Customs Act, 1962 by invoking extended period of limitation. When the matter reached the Customs Excise and Gold (Control) Appellate Tribunal, it held that the Commissioner of Customs (Preventive) did not have jurisdiction to issue the show cause notice. When on similar facts appeals giving rise to CA Nos. 4603-4604 of 2005, came before CESTAT, it upheld the issuance of show cause notice by the Collector of Customs(Preventive), u/s 20 of the Act.

             Date of Judgement: 18-Feb-2011

            Case Type: Appeal (civil)

            Case Number: Appeal (civil) 4294-4295 of 2002

            Case Year: 2002

            Judge Name: D.K. JAIN (J) H.L. DATTU (J)

            Petitioner Name: COMMR. OF CUSTOMS

            Respondent Name: SAYED ALI AND ANOTHER

            Head Notes: Allowing CA Nos. 4603-4604 of 2005 and dismissing CA Nos. 42304-4295 of 2002, the Court HELD: 1.1 It is evident that the notice u/s 28 of the Customs Act, 1962 has to be issued by the "proper officer". Section 2(34) which defines the term "proper officer" makes it clear that only such officers of customs who have been assigned specific functions would be "proper officers" in terms of s.2(34). Specific entrustment of function by either the Board or the Commissioner of Customs is, therefore, the governing test to determine whether an "officer of customs" is the "proper officer". [para 12-13] [1057-D-G] 1.2 From a conjoint reading of s.2(34) and s.28 of the Act, it is manifest that only such a customs officer who has been assigned the specific functions of assessment and re-assessment of duty in the jurisdictional area where the import concerned has been affected, by either the Board or the Commissioner of Customs, in terms of s. 2(34) of the Act is competent to issue notice u/s 28 of the Act. Any other reading of s. 28 would render the provisions of s. 2(34) of the Act otiose in as much as the test contemplated u/s 2(34) of the Act is that of specific conferment of such functions. [para 14] [1057-H; 1058-A-B] 1.3 It cannot be said that once territorial jurisdiction is conferred, the Collector of Customs (Preventive) becomes a "proper officer" in terms of s.28 of the Act, as it would lead to a situation of utter chaos and confusion, in as much as all officers of customs, in a particular area be it under the Collectorate of Customs (Imports) or the Preventive Collectorate, would be "proper officers".Therefore, it is only the officers of customs, who are assigned the functions of assessment, which of course, would include re-assessment, working under the jurisdictional Collectorate within whose jurisdiction the bills of entry or baggage declarations had been filed and the consignments had been cleared for home consumption, will have the jurisdiction to issue notice u/s. 28 of the Act. [para 14] [1058-B-E] 1.4 In the instant cases, the import manifest and the bill of entry having been filed before the Collectorate of Customs (Imports) Mumbai, the same having been assessed and clearance for home consumption having been allowed by the proper officer on importers executing bond, undertaking the obligation of export, the Collector of Customs (Preventive), not being a "proper officer" within the meaning of s. 2(34) of the Act, was not competent to issue show cause notice for re-assessment u/s.28 of the Act. Nothing has been brought on record to show that the Collector of Customs (Preventive), who had issued the show cause notices was assigned the functions u/s.28 of the Act as "proper officer" either by the Board or the Collector/Commissioner of Customs. [para 16] [1058-H; 1059-A-C] 1.5 Notifications No. 250-Cus and 251-Cus., both dated 27.8.1983, issued by the Central Government in exercise of the powers conferred by sub-s. (1) of the s.4 of the Act, appointing Collector of Customs (Preventive) etc. to be the Collector of Customs for Bombay, Thane and Kolaba Districts in the State of Maharashtra did not ipso facto confer jurisdiction on him to exercise power entrusted to the "proper officers" for the purpose of s.28 of the Act. [para 16] [1059-E-F] 1.6 It cannot, therefore, be said that the source of power to act as a "proper officer" is ss. 4 and 5 of the Act and not sub-s.(34) of s.2 of the Act. The said sections merely authorize the Board to appoint officers of customs and confer on them the powers and duties to be exercised/discharged by them, but for the purpose of s.28 of the Act, an officer of customs has to be designated as "proper officer" by assigning the function of levy and collection of duty, by the Board or the Commissioner of Customs. [para 16] [1059-D-F] Union of India AND OTHERS Vs. Ram Narain Bishwanath AND OTHERS (1998) 9 SCC 285 - held inapplicable. 1.8 This judgment shall not preclude the Revenue from initiating any proceedings against the importers for recovery of duty and other charges payable in respect of the subject goods, if permissible under the Act. [para 17] [1060-C-D] Konia Trading Co. Vs. Commissioner of Customs, Jaipur 2004(170) ELT 51 (Tri.-LB); Manohar Bros. (Capacitors) Vs. Collector of Customs II, Bombay, 1998 (98) ELT 821 (Tri); Collector vs. Manohar Bros. (Capacitors) 2004(166) ELT A152(SC); Devilog Vs. System India Vs. Collector of Customs, Bangalore 1995 (76) ELT 520 (Kar.); Orient Arts AND Crafts Vs. Commissioner of Customs (prev.) Mumbai 2003(155) ELT 168 (Tri-Mum); and Informatika Software (P) Ltd. AND OTHERS Vs. Commissioner of Customs (P.) Calcutta.1997 (73) ECR 348 ((Tri. Kolkata); The Commissioner, Sales Tax, U.P. vs. M/s. Suraj Prasad Gouri Shankar (1974) 3 SCC 230; and Sharad Himatlal Daftry vs. Collector of Customs 1988 (36) ELT 468 (Cal.) - cited. Case Law Reference: 2004(170) ELT 51 (Tri.-LB) cited para 7 (1998) 9 SCC 285 held inapplicable para 9 1998 (98) ELT 821 (Tri) cited para 9 2004(166) ELT A152(SC) cited para 9 1995 (76) ELT 520 (Kar.) cited para 10 2003(155) ELT 168 (Tri-Mum) cited para 10 1997 (73) ECR 348 ((Tri. Kolkata) cited para 10 (1974) 3 SCC 230 cited para 10 1988 (36) ELT 468 (Cal.) cited para 11 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4294-4295 of 2002. From the Judgment AND Order dated 01.02.2002 of the Customs, Excise AND Gold (Control) Appellate Tribunal (CEGAT) Mumbai in final order No. CII/342-43/WZB/2002 in Appeal Nos. C/660-661/96-Bom. With Civil Appeal No. 4603-4604 of 2005. V. Shekhar, Harish Chander, Joseph Vellapally, Amey Nargolokar, T.A. Khan Zangpo Sherpa, B. Krishna Prasad, R. Nedumaran, Vipin Jain, Reena Khair, S.R. Setia, Ragvesh Singh, Neha S. Verma for the appearing parties.   

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