COMMISSIONER OF CUSTOM AHMEDABAD vs. M/S SUNCITY STRIPS AND TUBES P. LTD

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C.A. No.-000418-000418 - 2022Supreme Court2022 INSC 7620 January 2022Author: HON'BLE THE CHIEF JUSTICE4 pages
AI SummaryDismissed

What did the Supreme Court hold?

The Supreme Court dismissed the appeal filed by the Commissioner of Customs. The dismissal was based on the decision of a three-Judge Bench in Canon India Private Limited vs Commissioner of Customs (AIR 2021 SC 16991). In that precedent, the Court held that an officer of the Directorate of Revenue Intelligence lacks jurisdiction to exercise functions entrusted to Customs Officers under the Customs Act, 1962, unless there is an entrustment under Section 6 of the Act. Consequently, proceedings initiated by the Additional Director General of DRI by issuing show cause notices were deemed invalid. Applying this principle, the Supreme Court found the show cause notice issued in the present case by the Additional Director General of DRI to be invalid due to lack of jurisdiction. The Court explicitly stated that it had not expressed any opinion on the merits of the CESTAT's judgment dated August 5, 2019, as the appeal was dismissed on the jurisdictional ground.

What were the facts?

The appeal before the Supreme Court was filed by the Commissioner of Customs, Ahmedabad, against M/s Suncity Strips and Tubes P Ltd. The dispute arose from a show cause notice dated October 30, 2013, issued by the Additional Director General of the Directorate of Revenue Intelligence (DRI), Zonal Unit, Ahmedabad, raising demands under the Customs Act, 1962. The Custom Excise Service Tax Appellate Tribunal (CESTAT) had passed an order on August 5, 2019, which is under challenge. The Supreme Court noted a delay in filing the appeal, which was condoned. The core of the Supreme Court's decision rested on a prior judgment.

What were the issues?

1. Whether an officer of the Directorate of Revenue Intelligence has the jurisdiction to exercise the functions entrusted to Customs Officers under the Customs Act, 1962, in the absence of entrustment under Section 6 of the Act? (Question of law) The Assessee (implicitly, as the respondent in the appeal) would argue that the DRI officer lacked jurisdiction, relying on the Supreme Court's precedent. The Revenue (Appellant) would likely argue that the DRI officer did possess the necessary authority or that the precedent was distinguishable. However, the judgment explicitly states that the appeal was dismissed based on the precedent, and no specific arguments from either side on this issue are recorded beyond the reliance on the cited case.

Which sections of the Income-tax Act were involved?

Section 6

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
CAD 7082/2020 1 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION Civil Appeal No of 2022 [Diary No 7082/2020] Commissioner of Customs, Ahmedabad Appellant Versus M/s Suncity Strips and Tubes P Ltd Respondent

O R D E R 1 SC16991, a three-Judge Bench of this Court has held that in the absence of an entrustment under Section 6 of the Customs Act 1962, an officer of the Directorate of Revenue Intelligence will not have jurisdiction to exercise the functions entrusted to Customs Officers under the provisions of the Act. As a consequence of the above elucidation, the Court held that the entire proceeding which was initiated by the Additional Director General of the Directorate of Revenue Intelligence by issuing show cause notices was invalid. 3 In the present case, the notice to show cause dated 30 October 2013 raising 1 Equivalent to 2021 (376) ELT 3 (S.C.) CAD 7082/2020 2 demands under the Customs Act 1962 was issued by the Additional Director General of the Directorate of Revenue Intelligence (Zonal Unit, Ahmedabad). 4 In view of the decision of the three-Judge Bench in Canon India Private Limited (supra), the appeal which has been filed by the Commissioner of Customs in the present case will have to be and is accordingly dismissed. 5 Since the appeal has been dismissed on the above ground, it has not become necessary to express any opinion on the merits of the judgment of the Custom Excise Service Tax Appellate Tribunal dated 5 August 2019. 6

The appeal is accordingly dismissed. 7 Pending applications, if any, stand disposed of.

….....…...…......………………........J. [Dr Dhananjaya Y Chandrachud] ….....…...…......………………........J.

[Bela M Trivedi] New Delhi; January 20, 2022 CKB ITEM NO.9 Court 4 (Video Conferencing) SECTION XVII-A S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS CIVIL APPEAL Diary No.7082/2020 (Arising out of impugned final judgment and order dated 05-08-2019 in CA No.13559/2014 passed by the Custom Excise Service Tax Appellate Tribunal, West Zonal Bench at Ahmedabad) COMMISSIONER OF CUSTOMS, AHMEDABAD Appellant VERSUS M/S SUNCITY STRIPS AND TUBES P. LTD. Respondent(s) (With appln.(s) for IA No.45768/2020-CONDONATION OF DELAY IN FILING and IA No.45769/2020-EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT and IA No.45767/2020-STAY APPLICATION )

Date : 20-01-2022 This appeal was called on for hearing today. CORAM :

HON'BLE DR. JUSTICE D.Y. CHANDRACHUD

HON'BLE MS. JUSTICE BELA M. TRIVEDI For Petitioner(s) Mr. Aman Lekhi, ASG Mr. Harish Pandey, Adv. Mr. Adit Khorana, Adv. Ms. Vishakha, Adv. Mr. Mohammed Akhil, Adv. Ms. Preeti Rani, Adv. Mr. M.K. Maroria, Adv.

For Respondent(s) Mr. Prateek Gattani, Adv.

Mr. Rajesh Kumar, AOR Mr. Varun Mudgil, Adv. Mr. R.K. Srivastava, Adv. Dr. Pratyush Nandan, Adv.

UPON hearing the counsel the Court made the following O R D E R 1 Delay condoned. 2

The appeal is dismissed in terms of the signed order. 3 Pending applications, if any, stand disposed of. (CHETAN KUMAR) (SAROJ KUMARI GAUR) A.R.-cum-P.S. BRANCH OFFICER (Signed order is placed on the file)

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