Order for Confiscation and Penalty can’t be sustained since Demand Notice issued by DRI was without under Jurisdiction: CESTAT [Read Order]

The Mumbai bench of the Customs, Central Excise and Service Tax (CESTAT) has held that the proper for confiscation and penalty cannot be sustained since the demand was raised without jurisdiction by the Director General, Directorate of Revenue and Intelligence (DRI)under the Customs Act, 1962.

The appellant, Nitin Jatania, appellant, approached the Tribunal challenging the order passed by the Commissioner of Customs (Adjudication), by which the demand raised in the show cause issued by the Additional Director General, Directorate of Revenue and Intelligence, Mumbai, under sections 28 and 124 of the Customs Act 19623 has been confirmed.

Considering the issue, whether the Additional Director General, DRI had the jurisdiction to issue the notice, the Tribunal bench comprising President Justice Dilip Gupta and Technical Member Mr. Anjani Kumar referred the decision of the Supreme Court in Canon India wherein it was held that the nature of thepower to recover the duty, not paid or short paid after the goods have been assessed and cleared for import is a power that has been conferred to review the earlier decision for assessment.

“This power which has been conferred under section 28 of the Customs Act on the proper officer, must necessarily mean the proper officer who, in the first instance, assessed and cleared the goods. Thus, the Additional Director General, DRI did not have the jurisdiction to issue the show cause notice,” the Tribunal observed.

The Tribunal further noted the Tribunal decision in Bakeman’s Home Products case and held thatdemand was raised under the proviso to Section 28(1) of the Act on the allegation of mis-declaration of value and the demand is found to be without jurisdiction.

Relying on the above decisions, the Tribunal held that “thus, for all the reasons stated above, the order dated 31.05.2012 passed by the Commissioner of Customs (Adjudication) cannot be sustained and is set aside. The appeal is, accordingly, allowed.”

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