The Delhi bench of Customs Excise and Service Tax Appellate Tribunal (CESTAT) has approved the three customs appeal made by Ashok Singhla and others regarding a show-cause notice they received reiterating the Supreme Court decision that the Additional Director General (ADG) has no jurisdiction over issuing show-cause notice.
The show-cause notice issued by the ADG of the Directorate of Revenue Intelligence (DRI), alleged that the appellants Ashok Singhla, KY Enterprises, and Kapil Dev Aggarwal misdeclared the description of goods in an attempt to grossly undervalue them. Finding substance in the allegations of the show-cause notice, the Principal Commissioner of Customs imposed subsequent penalties on them
Ashok Singhla&Ors. argued that the ADG, DRI did not have the jurisdiction to issue the show-cause notice as he was not the “proper officer” under Section 28 of the Customs Act. To further strengthen the argument, the Supreme Court decision in Canon India Pvt. Ltd. vs. Commissioner of Customs, and Commissioner of Customs, Kandla vs. M/s. Agarwal Metals and Alloys were cited“ 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-aside and the ensuing demands are also set- aside. ”
The Directorate of Revenue Intelligence defended its argument by calling into question the pending review petition of the judgment in the Canons India case.
The tribunal bench of CESTAT with Justice Dileep Gupta as the President and Justice P V Subba Rao as the Technical member, in favor of the appellants, stated that the order passed by the Principal Commissioner of Customs cannot be issued and thereby, approved the three customs appeal.
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