Enact Legal ‘0, 25.11.2021 The Addl. Director General DRI, Ahmedabad Zone Unit, 15, Magnet Corporate Park, $.G. Highway, Near Sola flyover, Thatlej, Ahmedabad-380054. 4. The Commissioner of Customs (Import-II) New Custom House, Ballard Estate, Mumbai- 400001. DIRECTORATE OF REVENUE INTELLIGENCE JAHMEDAcAD ZONAL UNIT, AHMEDABAD, 01 DEC 2021 INWARD No. Ref: IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION CIVIL WRIT PETITION (St.) NO.18401 OF 2021 Mis. Plastic Cottage Trading Co. & Ors «+»: Petitioner Vis Union of India & Ors. ...Respondents 1am concern for petitioners above named and filed above petition for quashing and set aside Show Cause Notice F.No.DRIVAZU/SRU-22/2017 dated 13.11.2018 Be please to informed you that the above matters circulated and will be listed Before he Hon'ble Chief Justice and the Hon'ble Shri. Justice M. S. Karnik on 07.12.2021 at 10.30 am Please find enclosed copy of the above petition along with all annexures by way of serve upon you. Your there for requested to remain present at time of hearing. Yours faithfully RECEIVED Addi. Director General, pris‘Ahmedubed Zonal Gait 30 indeboe INWARD 5 Ab [PRASHANT MISHRA] Advocate for Petitioners Encl.a.a fet) «cau go 1a Office No. 1, 1st Floor, 106, Jai Hind Building, Nagindas Master Road, Fort, Mumbai-400 023. “I[a—> T, 491 22 4976 2884 | M. + 91996711 1929 | E. enactlegal@gmail.comIN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE/URISDICTION; ( pote Gol Too ) CIVIL WRIT PETITION NO. of 2021 Bombay M/s Plastic Cottage Trading Co & Ors. . Vis Union of India & Anr. ...Respondents INDEX Sr. PARTICULARS EXH |PAGE NOS. i._ [SYNOPSIS A-C 2, [CIVIL WRIT PETITION rau | 3. |Copy of Show Cause Notice bearing] “A” F.No.DRI/AZU/SRU-22/2017-Plastic Cottage dated psy 13.11.2018 i 4. [Copy of the Order-in-Original No. 63/2019- dated] “B” ro | yo 08.11.2019. 5. | Copy of judgment in Canon India Pvt.Ltd Vs.| “C” ol 1 | Commissioner of Customs. \| 7. |Copy of judgment of Madras High Court in| “D" joy _19y Quantum Coal Energy(P)Ltd_ Vs. pe Commissioner of Customs 8 Copy of Judgment of Supreme Court in] “E* [0 199) commissioner of Customs Vs. Sayed Ali & Anr. \Reported at 2011(265) ELT 17(SC) 9. |VAKALATNAMA 134-14) LAST PAGE tatIN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION CIVIL WRIT PETITION NO. of 2021 Dist. Bombay M/s Plastic Cottage Trading Co & Ors. «++: Petitioner Vis. Union of India & Anr. ....Respondents SYNOPSIS & LIST OF DATES The Petitioner is challenging the impugned Show Cause Notice bearing dated 13.11.2018 issued by the Respondent No, 2 and consequential Order- In-Original dated 08.11.2019(issued on 11.11.2019) passed in furtherance of the said impugned Show Cause Notice by Respondent No. 2 as being entirely without jurisdiction in view of the law declared by the Hon'ble Apex Court. DATES EVENTS PAGE | NO 11.04.2017 |The Respondent No.2 Officers of DRI, Surat conducted search of the office premises of Petitioner's firm on 11.04. 2017.The Petitioner No.2 partner of petitioner No.1 firms was looking after activities related to import of goods. | 2017 The DRI has alleged in SCN that during 2017 petitioner’s firm imported 31 consignments of bags from various overseas suppliers of China and Taiwan,ey 13.11.2018 |The Show Cause Notice bearing no. No. DRIAZU/SRU- 22/2017-Plastic Cottage | dated 13.11.2018 was issued by Respondent No.2 DRI, Ahmadabad Zonal Unit, Ahmadabad. Wherein it was alleged that the petitioners had followed the modus of arranging parallel invoices of lower value from their overseas suppliers for consignments of “Varieties of, Bags” to impose penalty on the petitioners. 10.04.2019 | Written Submissions were filed by the Petitioners on 10.04.2019 in regard to the allegations made in img Show Cause Notice The Respondent No. 3 rejected the submissions made by the Petitioner and passed and imposed penalty on Petitioner under Section 114 (iii) and 114AA of the Customs Act, 1962 08.11.2019 | The Respondent No, 3 rejected the submissions made by the Petitioner and passed the Order-in-Original No, 63/2019- dated 08.11.2019. imposing penalty on Petitioners under Section 114 (iii) and L14AA of the Customs Act, 1962 The Hon'ble Apex Court was pleased to hold that the Additional Directorate General of Revenue Intelligence is not the proper officer to make re. assessment and notice issued by him and without the authority of law and set aside the proceedings, i Hence the petition. 1, POINTS TO BE URGE] The Hon’ble Apex Court held that Show Cause Notice issued by the Aaditional Directorate General is without jurisdiction, In the present case, the impugned Show Cause Notice is not issued by a proper officer within the meaning of the law declared by the Hon'ble Apex Court and consequently the said show cause notice is sans the jurisdiction and authority of law and consequential order in original passed thereon are liable to be quashed and set aside,2. JUDGEMENTS CITED As mentioned in the writ petition, 3. ACTS APPLICABLE 1.The Customs Act 1962 2.The Constitution of India. Advocate for PetitionerIN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE ISDICTION shale gyor/ 20y CIVIL WRIT PETITION of 2021 Bombay In the matter of Writ Petition under Article 226 of the Constitution of India And In the matter of Customs Act,1962 And In the matter of Show Cause Notice beating F. No DRVAZU/SRU- 22/2017/Plastic Cottage Did 13.11.2018 issued by the Respondent No. 2 under Section 28 of the Customs Act, 1962; And In the matter of Order-In-Original No. No.63/2019- 20, dated 08.11,2019(issued on 11.11.2019) passed in furtherance of the said Show Cause Notice by Respondent No. 3. 1. Mis Plastic Cottage Trading Co. Through its Partners 302-304, Abdul Rehman Street fess ROUTES Mumbai, eater Mumbai Fieg Mo, 19072Y 2. Shri Junaid Kudia 901/902, 9" Floor,Huda Heights, Ghas Gualli,Sahane Guruji Marg, Agripada, Mumbai-400011. » Shri Zaid Kudia 901/902, 9" Floor,Huda Heights, Ghas Gualli,Sahane Guruji Marg, Agripada, Mumbai-400011 «+. Petitioners vis |. UNION OF INDIA (Through Department of Revenue Intelligence Ahmedabad Zone Unit) 15, Magnet Corporate Park, $.G Highway, Neat Sola Flyover, Thaltej Ahmedabad-380054. x THE ADDITIONAL DIRECTOR GENERAL Department of Revenue Intelligence 15, Magnet Corporate Park, $.G Highway, Near Sola Flyover, Thaltej Ahmedabad-380054. * THE COMMISSIONER OF CUSTOMS New Custom House (Import 1), Mumbai-400001 .. Respondents© To, HON’BLE CHIEF JUSTICE AND OTHER PUISNE JUDGES OF THE HON’BLE HIGH COURT ATBOMBAY ESE COURT AT BOMBAY THE HUMBLE APPLICATIO! 0) PETITIONER ABOVE NAMED ER ABOVE NAMED, MOsT RESPECTFULLY SHEWETH: That, the Respondent No.1 is the Union of India, Respondent No, 2is the Additional Director General, exercising powers and jurisdiction under the Customs Act, 1962 and its allied Acts/Rules, By the instant petition, the petitioner seeks benevolent indulgence of this Hon'ble Court by invoking Writ Jurisdiction under Article 226 of the Constitution of India, to quash the Impusned Show Cause Notice bearing Respondent No, 2 issued under Section 28 of the Act and consequential Order-in-Original No, 63/2019-20/dated 08.11.2019 Passed41 42 furtherance of the said Impugned Show Cause Notice by Respondent No. 3 as being entirely without jurisdiction in view of the law declared by the Hon'ble Apex Court in the circumstances stated hereinafter, The Reliefs prayed, if granted, would serve the ends of justice. Hereto annexed and marked as EXHIBIT- “4” is the copy of said Show Cause Notice bearing F.No.DRVAZU/SRU-22/2017 dated 13.11.2018 issued by the Respondent No, 2. Hereto annexed and marked as EXHIBIT- “B® is a copy of the said Order-In-Original No, 63/2019-20 dated 08.11.2019 passed in furtherance of the said Impugned Show Cause Notice by Respondent No. 3. ‘The Petitioners say and submit that the limited facts, skipping superfluities, which may be necessary for considering the instant writ petition are as follows — A search was conducted by DRI on M/s Winsor Enterprises, 283, Vaid Building, Ground Floor, Nagdevi Street, Mumbai on 11.04.2017 and certain documents in the form of print outs of e-mails were recovered Which indicate that Petitioners had mis-declared the actual value of the Bods before the customs authorities at the time of seeking import clearance. The Petitioners, holder of IEC No. 0305084356 issued by the DGFT, Mumbai has registered office at 302-304, Abdul Rehmaan Street, Mumbai, Maharashtra. Shri Mukhtar Toufik Kudia, Toufik H. Kudia an Shri Sadik Kudia are the partners of the said partnership firm. ‘The s ete. Petitioner No.2 (Junaid Kudia) looks after all Import and finan43 44 © related activities of Petitioner No.1 and Petitioner ‘No.3(Shri_ Sadik Kudia) looks after sales and administration related activities of Petitioner’s firm. That, the Officers of DRI, Surat conducted search of the office premises of Petitioner’s firm on 11.04.2017 and recorded statement of Mr. Mukhtar Kudia on 20.04.2017 wherein admitted that he looks after sales activities of firm certain invoices were retrieved from e-mails of his brother which were related to imports of petitioner’s firm were forwarded by one Mr, Zulfikar Shaikh, office assistant of petitioner's firm to his e-mail ID mukhtarkudia@yahoo.in. Petitioner No.2 partner of petitioner No.1 firms was looking after activities related to import of goods. In statement dated 20.04.2017 he stated that, he had declared less value of the imported goods at time of seeking clearance from customs authority with an intention to evade customs duty and agreed to pay differential customs duty. That, the DRI has alleged in SCN that during the period from May 2015 to March 2017 petitioner’s firm imported 7 consignments of bags from various overseas suppliers of China and Taiwan, Out of these consignments in respect of four (4) consignments, two sets of invoices bearing same invoice number and date along with their packing list were retrieved from emails of petitioner’s firm. Quality, quantity in meter, gross weight and volume in BCM are same but value of both the sets of invoices was different. It has been alleged that invoices of lower value ‘were submitted to customs authority through their CHA for clearance of goods to pay less customs duty, It is further alleged that in other 345 4.6 consignments, two sets of invoices bearing same invoice number and date along with their packing list were retrieved from emails of Winsor Enterprise, sister concem of the petitioner's firm. However, quality, Quantity in meter, gross weight and volume in CBM were same in certain case and in certain cases quantity and quality were different and also the value of both the sets of invoices were different, After investigation a show cause notice bearing no. No. DRVAZU/SRU- 22/2017-Plastic Cottage dated 13.11.2018 was issued by the Additional Director General, DRI, Ahmadabad Zonal Unit, Ahmadabad. Wherein it ‘was alleged that the petitioners had followed the modus of arranging Parallel invoices of lower value from their overseas suppliers for consignments of “Varieties of Bags”. The invoices managed from their overseas suppliers/commission agent company, were presented before the designated authority of Customs at the time of seeking clearance with intent to evade the correct payment of Customs at the time of seeking clearance with intent to evade the correct payment of Customs duty livable thereon. In the SCN it is alleged that as per provisions of Section 14 of the Customs Act 1962, read with Rule 3(1) of the Customs ‘Valuation (Determination of Value of Imported Goods) Rules, 2007, the transaction value ofthe imported goods shall be th total amount actualy Paid or payable for the said imported goods. Thus, in cases where total amount paid or payable can be ascertained, the correct transaction value shall be a sum total ofall such amounts and the same will be determined, under Rule 3 IBID. Hence, the actual assessable value of all the 3247 48 @ consignments of “Varieties of Bags” comes to Rs. 2,59,91,160/- as against the declared value of Rs.16,89,64,411/-. It is alleged that the petitioners suppressed the value amounting to Rs.14,29,73,251/- from customs. That, the petitioners have resorted to collusion with the supplier, willful mis-statement, and suppression of the facts by fumishing wrong declaration and documents and have intentionally suppressed the actual transaction value for the purpose of evasion of Customs duty of Rs. 4,20,92,755/-. Thus, for the demand of differential Customs duty, the extended period under Section 28(4) of the Customs Act, 1962 is liable to be invoked. That, the Show Cause Notice asked to the petitioners as to why penalty should not be imposed upon him under Section 112 (a) and Section 114AA of Customs Act, 1962 separately. That, in regard to SCN the petitioners have filed detailed written submission to on 10.04.2019 wherein it was submitted that they have not undervalued the imported goods and declared correct value of import before the customs authority. Further, the DRI has not produced any documentary or other evidence except copies of invoices retrieved from email account handled by one employee, whose statement was not recorded by the DRI, price shown in such invoices, which are for different quality and value (for market survey only), The petitioners have submitted the second sets of invoices are not actual invoices and also after getting Performa invoice or initial quote from overseas suppliers, we negotiate and also change quality of goods or quantity/value and after getting final Invoice and Bill of Lading and then invoices submitted to customs along with Bill of Entry, through our CHA and after assessment by customs we pay duty and get clearance. Hence price taken by the DRI as pag tion of, Aaant U.R. QURESHI Greater ural foe, 0.16072 ‘ep. OL genes.@) imported goods on the basis of invoices retrieved from email account is totally incorrect and illegal. 4.9 Further, there is no documentary evidence that the petitioners had paid excess amount to the suppliers or other persons over and above invoice/contract price declared in the Bills of Entry. Further, admission of payment of cash to the overseas supplier's person the differential value in my statement, is totally incorrect as said statement was recorded on the basis of pressure and same was retracted by the petitioners. Also, there is no evidence or statement about transferring funds to suppliers or manufacturer abroad through Hawala or other illegal channel, In the reply, petitioners also submitted that for proving a case of under valuation, investigating agency required to produce evidences in their Support which prove that seller and importer are related or price is influenced by any factor directly or indirectly and differential value of the goods are transferred through banking or illegal channel, Petitioner also submitted that all the invoices, which were submitted by them to Customs were received by us through their banker and banker has duly endorsed the same and payments against these invoices were made through normal banking channels, following all the stipulated norms for making payment in foreign currency. The petitioner has also relied certain case laws in their support wherein at was held that mere on the basis of certain copy of invoices retrieved from compute or email, tundervaluation cannot be alleged without any supporting or corroborative evidence. However, Ld. Joint Commissioner has not appreciated the facts and provisions of law and mechanically confirmed demand of customs duty in respect of customs duty in respect of 32consignments of “Varieties of Bags” as per Annexure-A of the SCN cleared by petitioners and passed O10 No.63/2019-20 dated 08.11.2019 as under: - Timpose a Penalty of Rs. 5,00,000/- under Section 112(a) of the Customs Act 1962 and a penalty of Rs.2,00,000/- under section 1144A of the Customs Act, 1962 on Shri Junaid Kudia, De facto partner of M/s Stores. Plastic Cottage Trading Company. And I impose a Penalty of Rs.20,000/- under Section 112(a) of the Customs Act 1962 on Shri Zaid Kudia, partner of M/s Plastic Cottage Trading Company. Being aggrieved by the said Original No. 63/2019-20 dated 08.11.2019, the petitioners prefer this Writ before Your Honour on the grounds mentioned hereinafter and claims specific relief as specified hereinafter. GROUNDS . BECAUSE, the impugned order suffers from the vice of excessive use of powers and jurisdiction vested with the adjudicating authority, which did not take into consideration all the aspects of the case. The Impugned Order, Therefore, is arbitrary, nonspeaking and unilateral and is liable to be set aside. . BECAUSE, petitioners submit that the impugned Order-in-Original passed by the Ld. Joint Commissioner is perverse and contrary to law, aswell as on facts and on this ground itself the impugned order is liable to be set aside of law. BECAUSE, the Ld. Joint Commissioner erred to not consider and appreciated the para-wise explanation made by the appellants to the allegations made in the show cause notice, fact that statements were recorded under pressure by DRI and same were retracted by the Concemed person, sale price of the imported goods, sold by petitioners in India and lack of evidence regarding payment of differential value to overseas buyers. Petitioners have genuinely imported the impugned goods and all the transactions related to present consignments are fare and correct. All the documents viz, Contract for purchase, Invoices, Bill of Lading, Insurance Policy etc. necessary for assessment of the Bills of Entry submitted by us are genuine and nowhere have been challenged by the Customs in the show cause notice. The petitioners have a strong case that the transaction value declared in all the Bills of Entry should have been accepted. . BECAUSE, the DRI case is based on the Statements of petitioner no.2 & petitioner no.3 dated on 20.04.2017 and said statement was retracted vide letter dated 26.06.2019 and said statement was recorded under duress /pressure and except so called confession, there are no material on record which corroborative statements with the evidence, BECAUSE, DRI alleged under valuation based on two set of invoices retrieved from mail. However, as per DRI version itself the quality an the quantity of both the sets are different in all 3 cases, and similar inQD cases, hence invoices, retrieved from email cannot be compared for the Purpose of assessment/valuation and value declared in B/E by submitting actual invoices was the actual transaction value and same was accepted by the customs at the time of assessment. F. BECAUSE, in certain cases, overseas supplier had given Performa invoice for negotiation/quotation and ultimately petitioners had Purchased Stock of Lots of goods, which are available in lower rates. Hence, invoices retrieved from email account are not actual invoices but, Performa invoices, which cannot be a valid document for assessment of customs duty. Petitioners had submitted actual invoices, representing actual transaction value of the relevant goods, to customs at the time of filing various Bills of Entry and after loading some value, based on contemporary Bill of Entry/NIDB data or accepting transaction value, ich ‘customs has assessed the Bills of Entry finally. All the invoices, wI were submitted by the petitioners to customs, were received by the petitioners through their banker and they had duly endorsed the same. ‘The payments against these invoices were made through banking channels, all the stipulated norms for making payment in foreign currency. This may be verified from the documents which were submitted by the petitioners to port customs. DRI while conducting investigation has overlooked it and has not conducted any investigation at port level. G. BECAUSE, all invoices submitted by the petitioners to customs, value is shown in US$ and in USS value is negotiated and payment is made to customers, however, in all invoices retrieved/recovered from email of ‘opal UR, aupesy) Greater Burbs, Frey, 16072the petitioner's employee by DRI, value is shown in Chinese Yuan (CNY). Before import of bags, the petitioners visited China making enquiry in respect of price of bags of international brands in Chinese market in CNY and order local suppliers for making and supply of copy of such international branded bags, which are 10 times cheaper. Therefore, invoices prepared by petitioners’ employee which was mailed to Petitioner no.2 are nothing but an exercise for comparison of price of branded bags viz-a-viz bags to be imported. BECAUSE, the Ld. Joint Commissioner erred to impose Penalty under Section 112 (a) and 114 AA of the Customs Act, 1962. Ld. Joint Commissioner wrongly concluded that the goods were imported by adopting undervaluation and had re-determined the value of import to Rs.2,59,71,033/- and held the same liable for confiscation under Section 111(m) of the Customs Act, 1962 and hence, being a partner of M/s Winsor Enterprise, Petitioners are liable for penalty under Section 112 (a) and 114 AA of the Customs Act, 1962. BECAUSE, no customs duties are payable on the imported goods as we have declared true and correct transaction value of the imported goods and paid duty properly, hence subject goods are not liable for confiscation under provision of Section 111 of the Customs Act, 1962 and being partner I am not liable to penalty under Section 112 (a) and 114AA of the Customs Act, 1962. Section 112 (a) and 114 AA of the Customs Act, 1962 is reproduced below: 112. Penalty for improper importation of goods, etc. - Any person, 5(1d (@) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or SECTION 114AA. Penalty for use of false and incorrect material. - Ha person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, shall be liable 10 a penalty not exceeding five times the value of goods. J. BECAUSE, the above provisions of law, it is evident that in the instant case that as a person looking after import-export of the petitioner’s firm have declared the true transaction value of the import of the subject goods and produced all the document related to import to the customs and not mis-declared quantity, quality or value of the import and paid Customs duty on the said import properly. Hence no penalty can be imposed upon the petitioners under Section 112 (a) or 114AA of the Customs Act, 1962. Therefore, impugned order for imposition of penalty of Rs. 20,00,000/- And 40,00,000/- on petitioner 2 & Rs. 5,00,000/- petitioner no.3 as an employee of petitioner’s firm under Section 112 (a) and 114 AA of the Customs Act, 1962, respectively said section may be dropped. K. BECAUSE, penalty under Section 112 (a) and 114AA can be imposed on the person who do any act which act or omission would render such goods liable to confiscation under section 111 or knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any {2material particular, in the transaction of any business for the purposes Customs Act, However, in the instant case as an employee of firm Petitioner no.1 & petitioner no.2 have declared correct value of the goods and paid proper duty as per appeal filed on behalf of petitioner's. firm against the impugned Order-In-Original. Hence, no penalty can be imposed against the petitioners under Section 112 (a) or 114AA. THE ADDITIONAL DIRECTOR GENERAL DRI DID NOT HAVE JURISDICTION TO ISSE THE SHOW CAUSE NOTICE UNER SECTION 28 OF THE CUSTOMS ACT, 1962 THUS THE IMPUGNED ORDER PASSED IN PURSUANCE OF SUCH NOTICE IS BAD IN LAW, It is submitted that the Additional Director General DRI does not have the power to issue the SCN under section 28 of the Custom Act. The Impugned SCN has been issued by Ld. ADG, DRI under Section 28 of the Customs Act for the various imports of the goods made in the period between 16.3.2012 to 15.2.2014 therefore the SCN as issued by ADG, DRI is bad in law and the impugned order passed in pursuance of such notice deserve to be set aside. ‘That, section 28 of the Custom Act read as follows: Section 28 (Recovery of duties not levied or short levied or erroneously an refunded — (1) where any duty has not been levied or has been Short foo levied or erroneously refunded or any interest payable has not been paid Part — paid or erroneously refunded for any reason other than 1 { reasons of collusion or any willful mis- statement or suppression Offa -\ ‘gat. 8 Gi:@ 4) The proper officer shall, within one year from the relevant date serve notice on the person chargeable with the duty or interested which /has not been so levied or which has been short — levied or short paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice; (11) persons appointed as officers of Customs under sub ~ section (1) of section 4 before the 6 day of July 2011 shall be deemed to have and always had the power of assessment under section 17 and shall be deemed to have been and abvays had been the proper officers for the purpose of this section. Explaination 1- for the purposes of this section “Relevant Date “means @) Ina case where duty is not levied or interest is not charged the date on which the proper officer makes an order for the clearance of goods. 4) Ina case where duty is provisionally assessed under section 18, the date of adjustment of duty after the final assessment there of re — assessment as the case may be. ©) Incase where duty or interest has been erroneously refunded the date of refund; & Inany other case the date of payment of duty or interest. Explanation 2 -for the removal of doubts it is hereby declared that any non — levy, short levy or erroneous refund before the date on which the Finance Bill, 2011 receives the assent of the president shall continue to be governed by the provisions of section 28 as it stood immediately before the date on which such assent is received, O. The expression ‘Proper Officer’ is defined in section 2(34) of the Custom Act as under;“2(34) ‘proper officer’ in relation to any function to be performed under this Act, means the officer of custom who is assigned those functions by the Board or the Commissioner of Customs”. P. That, from a combined reading of the above provisions, it is evident that notice under Section 28 can only be issued by the proper officer and the Proper officer for issuing notice under Section 28 is the officer of custom who is assigned those functions by the Board of the Commissioner of Customs in terms of Section 2(34) of the Customs Act. Q. Itis submitted that the proper officer for the purposes of section 28 of the Customs Act is that officer who has been assigned the specific function of assessment of bill of entry. In other words, the proper officer for issuing a show cause notice under section 28(1) of the Custom Act Will be the proper officer who has assessed the concerned bills of entries ‘under section 17 of the Custom Act. Conferment of power of assessment under section 28(11) of the custom Act, 1962 ipso facto does not make the DRI officers’ proper officers of Customs as it is settled law that only those officers who assess the goods and sanction their clearance for home consumption would be proper officers within the meaning of Section 28 of the Custom Act, 1962. X The phrase “the proper officer” signifies that out of the larger pool of Proper officers, only that officer who is assigned the functions of “the Proper officer” for the purpose of the assessment of imported goods in question under section 17 will have jurisdiction to issue show caus; ‘rear Huma Reg, No. 16072 Exp. Di.a@ being an investigative body does not have power to issue the SCN. ‘Therefore, even if the power to assess goods has been granted to officers of DRI under Section 28 (11) of the Custom Act, 1962 they automatically do not qualify to be the proper officer as the power must be exercised first to the exclusion of other officers S. It is submitted that a provision conferring jurisdiction on plurality of officers without Proper guidelines as to who should exercise such Jurisdiction and under what circumstances is arbitrary discriminatory and violative of Article 14 of the Constitution of India, 1950. Thus, even assuming for the sake of argument but without admitting that by virtue of sub section (11) inserted in new section 28 of the Customs Act, all officers of customs have been deemed to be proper officers for the Purpose of section 28 even the period prior to April 8, 2011 still such provision is bad in law as it does not lay down any guideline as to who will exercise the power of proper officer and under what circumstances, T. That, the Hon’ble Apex Court, vide judgment dated 09.03.2021 in the case of Canon India Pvt.Ltd Vs. Commissioner of Customs was pleased to hold that the Additional Directorate General of Revenue Intelligence is not the proper officer to make reassessment and notice issued by him under section 28 of the Act is without jurisdiction and without the authority of law and set aside the proceeding. Hereto annexed and marked as Exhibit-‘C’ is the Copy of judgment in Canon India Pvt.Ltd ‘Vs. Commissioner of Customs. U. That, the Hon’ble Bench of Madras High Court, vide its judgment date 16.03.2021 in the matter of Quantum CoalEnergy(P)Ltd Vs. Commissioner of Customs stated that the Additional Director General of DRI cannot be termed as the ‘proper officer’. As the entire proceeding was initiated by the authority who lacked the jurisdiction, the Hon’ble court therefore quashed the impugned order of the writ petition. Hereto annexed and marked as Exhibit- ‘D’ is the Copy of judgment Quantum Coal Energy(P)Ltd Vs. Commissioner of Custom. This proposition also finds support in the judgment of the Supreme Court in commissioner of Customs Vs. Sayed Ali & Anr. Reported at 2011 (265) ELT 17(SC) wherein it has been held that only those officers who are assigned the functions of assessment and within whose jurisdiction the bills of entry or baggage declaration had been filed and the consignment had been cleared for home consumption will have the Jurisdiction to issue notice under Section 28 of the Act. Hereto annexed and marked as Exhibit- “E? is the Copy of judgment commissioner of Customs Vs. Sayed Ali & Anr. Reported at 2011(265) ELT 17(SC) - That, the petitioner had provided all the information that was required to be given to or was specifically asked for by the department. In such a situation, there cannot be any allegation of mis- statement suppression against the petitioner. Therefore, the respondent has mistakenly given a finding that the Petitioner suppressed the vital facts from the Customs authorities, Further the petitioners had also responded to all the querifs raised by the customs authorities during the proceedings. Thele Aaa. v.a.aurtsh\ Greater mt() is not even any allegation that there was any suppression or misdeclaration of facts by the petitioners by way of not responding to any of the queries raised by the customs authorities or by way of providing wrong information in Tesponse to such queries. In such a situation the onus was on the customs authorities to make necessary enquires based on the primary facts disclosed by the petitioner and to draw proper interference in order to satisfy themselves about the of the claim of availment of benefit of notification no. 25/2005 cus. The Petitioners cannot be held responsible for any oversight or dereliction of duty if any on the part of the customs authorities in any case in the light of the facts of the present case the petitioner cannot be said to be guilty of suppression or mis- declaration of facts before the customs authorities, The order of the respondent by upholding the order in original has held that the are liable to be confiscated under Section 111(m) of the Custom Act because the petitioners has fraudulently claimed benefit of an exemption which was not available and has not provided the correct / relevant description in the bills of entry. The term misdeclaration under the section 111(m) of the Customs Act would primarily include the following the situations; a) Misdeclaration in the term of value, this could be both undervaluation and overvaluation,@ ») Misdeclaration in the terms of other particular, this would mean that the description and other details pertaining to the goods as provided in the bills of entry is different from that ofthe real description and details ofthe goods. This can be in terms of quantity, quality, nature ete. of the goods. AA. On the basis of the aforementioned, it can be said that the section! 11(m) of the Customs Act provides for the confiscation of the goods which don’t correspond in respect of the value or in any other particular with the entry made under the Customs Act, “entry” in relation to goods means an ‘entry’ made in the bill of entry, It is submitted that for the reason given in the foregoing paragraphs, there was no mis declaration either in respect of value or any other particular with the entry made under the Customs Act. No remittance over and above the invoice value has either been sent by the Petitioner to the exporter nor is any such amount payable. Its therefore respectfully submitted that the petitioner hhas not mis-declared the value of export. 3B. INTEREST PROPOSED TO BE DEMANDED UNDER SECTION 284A OF THE CUSTOMS ACT IS NOT PAYABLE. tis submitted by the petitioner since the customs duty demand is not Sustainable as pr the arguments advanced above the proposal to demand interest is unsustainable and need to be set aside. This principal has been laid down in various judaments, which were relied upon by the petitioner and have also been brough to the notice of the respondent during the fe course of proceedings. However, none of the cases were considered by {© the respondent on the ground that facts of those cases would not v (ee Reg. Ho, 13 4, applicable in the present case.CD CC. It is settled position in the law that the show cause notice is the foundation of the case of the department and sine qua non to exercise the power to issue show cause notice under section 28 is jurisdiction of the proper officer. The Respondent No.2 was not the proper officer to issue Show Cause Notice. Once the very foundation of the case of the department falls entire proceeding including the adjudication order do not survive. The Legal Maxim ‘‘sublato fundamento cadit opus? is squarely applicable in the facts and circumstances of the present case DD. The said legal maxim has been applied by the Hon’ble Supreme Court of India in State of Punjab V.s Devendra Pal Bhullar 2011(14) SCC 770 while observing as follows: - “It is settled legal proposition that if initial action is not in consonance with the law, all the subsequent and consequential proceeding would fall through for the reason that the illegality strikes at the root of the order. In such fact-situation, the legal maxim ‘sublato fundamento cadit opus’ meaning thereby that foundation being removed, siructure/work falls, comes into play and applies on all scores in the present case. EE, The petitioner hereby submits that reliance placed on the following cases was not because the facts were identical in the nature. It was because the principal laid down in such cases clearly supports the petitioner's case and the same ought to have to be considered before passing the impugned order. Accordingly, the petitioner submits that the impugned order be set-aside to the extent it is prejudicial to the petitioner's interests and then give a finding based on the decision discussed hereinafter. “ggal u. 8, ouaESH) Greate umaai Fag, ta‘That, for the reasons and facts as set out hereinabove, the SCN & IOI deserves to be quashed and set aside with consequential reliefs. In the premises aforesaid, the petitioner submits that the petitioners is entitled to a Writ of Certiorari and / or any other appropriate writ order or direction under Article 226 of the Constitution of India as more particularly prayed hereinafter. The petitioners submit that pending the hearing and final disposal ofthis Petition, this Hon’ble Court may be pleased to, by an interim order and injunction, restrain the Respondents from acting upon or taking any further steps or proceedings in pursuance of or in furtherance of the Impugned Show Cause Notice & Order-In-Original. The Petitioners craves leave to add to, delete, substitute, amend or modify any of the above grounds if an occasion arises The petitioners’ states that no other Writ Petition has been filed by the petitioners for seeking the same reliefs . The impugned show cause notice and the order in original are issued within the jurisdiction of this Hon'ble Court. The entire cause of action has arisen within the jurisdiction of this Hon'ble Court. This Hon'ble Court has jurisdiction to entertain, try and dispose ofthe present petition, the case and is able to depose thereto, A 8 De. 2026 AR 2 em ‘o> NG BE13. b) gd ® The Petitioners has also paid the required fixed court Fees of Rs. on this petition. PRAYERS In the aforesaid premises and in light of the submissions contained hereinabove, the Petitioners most respectfully prays that this Hon’ble Court may be pleased to — That this Hon"bie Court be pleased to issue Writ of Certiorari or Writ in the nature of Certiorari or any other appropriate Writ, Order or direction under Article 226 India, calling for records of petitioner case pertaining to the Impugned Show Cause Notice bearing F.No.DRI/AZU/SRU- 22/2017 dated 13.11.2018 issued by the Respondent No.2 and the consequential Order-In-Original Order-in-Original No. 63/2019-20 dated 08.11.2019 passed by the Respondent No.3. ‘That the pending hearing and final disposal of the above petition, by an interim order and injunction of this Hon’ble Court, the Respondents, their subordinate servant and the agents be restrained from taking any steps for recovery of differential duty with interest and the amount of penalty confirmed by Order-in-Original No. No. 63/2019-20 dated 08.11.2019 passed by the Respondent No.3. which was passed in furtherance of the Impugned Show Cause Notice bearing F.No.DRVAZU/SRU-22/2017 dated 13.11.2019 issued by the Respondent No.2. For ad-interim reliefs in terms of prayers (b) above; For such further and other reliefs as nature and circumstances of the case may require. fgBAL U. R. QURESH Greater Mumial fag. 6072AND FOR THIS ACT OF KINDNESS THE PETITIONER SHALL AS IN DUTY BOUND EVER PRAY. Dated this day of September, 2021 at Mumbai. \ihes Advocate For the Petitione For PLASTIC COTTAGE TRADI \ 1.M/s. Plastic Cottage Tradit By seg — For PLASTIC COTTAGE TRADI! 3. Zaid Kudia Petitioners 1, Mr. Junaid Kudia Partner of M/s. Plastic Cottage Trading Co. the Petitioner No.2 above named do hereby solemnly affirm and state that whatever has been stated in paras___ to _are true to my own knowledge and whatever has been stated in the remaining paragraph __to__are based on the legal information received and I believe the same to be true. The documents annexed to the petition are also true copies of the originals which I believe to be true. Solemnly affirmed at Mumbai on) This 2-4"day of September, 2021) a 29 SEP 2021 Identified and explained by me ee Aityocate For the Petitione aw Governmen| OF india Greater Mumbai\Manarashtra 29 SEP 2021 NOTED & REGISTERS 2 rns ||