P.G Chacko, Member (J):— These appeals are directed against the order passed by the Commissioner of Customs (Preventive), Mumbai in adjudication of show cause notice dated 10-1-2000 issued by the same Commissioner. In the impugned order, the learned Commissioner confirmed a demand of duty against M/s. Nylex Traders (appellant in appeal No. C/1194/01) under Section 28(1) of the Customs Act, 1962, with interest thereon under Section 28AB of the Act and imposed penalties on M/s. Nylex Traders, Shri Chandra- kant D. Shah (Proprietor), Shri Bharat D. Doshi and a few others under Section 112 of the Act. Shri C.D Shah and Shri B.D Doshi are aggrieved by the respective penalties.
2. Two miscellaneous applications, one filed by M/s. Nylex Traders and other by Shri C.D Shah are also before us. These applications seek to incorporate certain jurisdictional objection as additional ground of the relevant appeals. The gist of this objection is that the Commissioner of Customs (Preventive) did not have jurisdiction to issue the show-cause notice and, for that matter, did not have jurisdiction to adjudicate the same. Certain decisions of the Hon'ble Supreme Court and certain judgments of this Tribunal have also been relied on by the appellants in support of the jurisdictional objection. Moving the miscellaneous applications, the learned Counsel for the applicants submits that, as the jurisdictional error involved in this case goes to the root of the matter, his clients are entitled to raise the objection at this stage. It is conceded that this objection had not been raised either at the stage of replying to the show cause notice or at the later stage of adjudication of the show cause notice. Nevertheless, according to the learned Counsel, these applicants are not precluded from raising the objection at this stage. In this connection, the learned Counsel has relied on the Hon'ble Supreme Court's judgment in Commissioner of Sales Tax, U.P v. Sarjoo Prasad Ram Kumar, [1976] 37 STC 533 (S.C). Counsel has referred to the essential facts of the cited case and has claimed support from the Apex Court's decision.
3. Learned SDR has opposed the jurisdictional objection being raised at this stage. According to him, such an objection should have been raised at the earliest stage i.e at the time of replying to the show cause notice. Objection was not raised before the adjudicating authority at any stage, nor was it raised in the present appeals. Learned SDR submits that the belated attempt of these parties to raise the objection through amendment of their memoranda of appeals is liable to be defeated for the ends of justice.
4. Both sides have also addressed the main issue as to whether the Commissioner of Customs (Preventive), Mumbai has jurisdiction to issue the show-cause notice. The learned Counsel submits that he was not “proper officer” as defined under Section 2(34) of the Customs Act inasmuch as there is no documentary material to show that the learned Commissioner had been assigned the function of issuing show-cause notice and adjudicating the same in relation to imports made through the New Custom House, Mumbai. In this connection, learned Counsel has claimed support from Commissioner of Customs v. Syed Ali, 2011 (265) E.L.T 17 (S.C). He has also referred to a few decisions of the Tribunal. On his part, the learned SDR has relied on Order Nos. A/134-135/11.CSTB/C-I dated 22-3-2011 [2011 (270) E.L.T 280 (Tribunal)] passed by the Tribunal in Appeal No. C/1279/01 (Bimal Kumar Jain v. Commissioner Of Customs & Anr.), Mumbai).
5. After considering the submissions, we find that the fundamental question whether the objection of jurisdiction could be raised at any stage was settled long ago by the Hon'ble Supreme Court in the case of Sarjoo Prasad Ram Kumar (supra). In that case, the question arose as to whether the Assistant Sales Tax Officer, Sector-II could issue notice under Section 21 of the UP Sales Tax Act to the assessee who was carrying on his business in Sector-III during the material period. The Assistant Sales Tax Officer, Sector-II, after following the principles of natural justice, passed an order of assessment against the assessee, which was taken in appeal to Assistant Commissioner (Judicial), Sales Tax. Before the appellate authority, the assessee contended that the Assistant Sales Tax Officer, Sector- II had no jurisdiction to assess. That contention was upheld by the appellate authority which held that only the Assistant Sales Tax Officer, Sector-III could have assessed the assessee. Aggrieved by the decision of the appellate authority, the department preferred an appeal to the Judge (Revisions), Sales Tax, who, in turn, framed the following question of law and referred the same to the Hon'ble High Court of Allahabad for its opinion:—
“Whether, under the circumstances of this case, the assessment passed by the Assistant Sales Tax Officer, Sector-II, was a valid assessment or a void one without jurisdiction?”
6. The Hon'ble High Court answered the above question in favour of the assessee. That is how the dispute happened to come up before the Apex Court. The relevant paragraph of the judgment of the Apex Court reads as under:—
“The only other contention advanced by Mr. Karkhanis is that the assessee having not taken any objection as to the jurisdiction before the assessing authority he is precluded from raising that objection at a later stage. This contention is again unacceptable to us. Herein we are concerned with the question of jurisdiction. Unless there is some provision either in the Act or in the Rules framed which precludes the assessee from raising any objection as to jurisdiction, if the same is not raised before the assessing authority, the assessee cannot be precluded from raising that objection at a later stage. An objection as to jurisdiction goes to the root of the case.”
7. In the instant case, it is true that the appellants namely M/s. Nylex Traders and Shri C.D Shah had not raised any jurisdictional objection in their replies to the show-cause notice. They had not raised any such objection before the adjudicating authority at any other stage. As per the judgment of the Hon'ble Supreme Court in Sarjoo Prasad Ram Kumar's case (supra), they can be allowed to raise the jurisdictional objection in their appeals before the Tribunal. In other words, the dictum “An objection as to jurisdiction goes to the root of the case” operates in favour of the said parties. Their amendment applications are, therefore, liable to be allowed. It is ordered accordingly.
8. The question now arising before us is whether the additional ground raised in the appeals of M/s. Nymex Traders and Shri C.D Shah are valid and tenable? The gist of this new ground is that the Commissioner of Customs (Preventive) had no jurisdiction to issue the show-cause notice. The show-cause notice was issued primarily to demand duty on certain goods imported by M/s. Nymex Traders through New Custom House, Mumbai. The show-cause notice was, however, not issued by the Commissioner of Customs (Imports). It came to be issued by the Commissioner of Customs (Preventive), who, according to M/s. Nymex Traders and its proprietor, did not have jurisdiction to issue the notice. The reason stated by these appellants is that the Commissioner of Customs (Preventive) was not a “proper officer” as defined under Section 2 of the Customs Act, 1962. The definition reads as follows:—
“2. Definitions.—
(34) “proper officer”, in relation to any functions to be performed under this Act, means the officer of customs who is assigned those functions by the Board or the Commissioner of Customs;”
9. As rightly submitted by the learned Counsel for the appellants, there is no material on record to indicate that the function of issuing show-cause notice in relation to imports made through New Custom House, Mumbai was assigned to the Commissioner of Customs (Preventive) by the Board. In the absence of such assignment of function, the Commissioner of Customs (Preventive) cannot be held to have had the jurisdiction to issue the subject show-cause notice. A similar question arose before the Hon'ble Supreme Court in the recent case of Syed Ali (supra). Their lordships examined the relevant provisions of the Customs Act and rendered their decision in para 16 of their judgment, which is reproduced below:—
“In the present case, the import manifest and the bill of entry having been filed before the Collectorate of Customs (Imports) Mumbai, the same hav- ing been assessed and clearance for home consumption having been allowed by the proper officer on importers executing bond, undertaking the obligation of export, in our opinion, the Collector of Customs (Preventive), not being a “proper officer” within the meaning of Section 2(34) of the Act, was not competent to issue show cause notice for re-assessment under Section 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 under Section 28 of the Act as “proper officer” either by the Board or the Collector/Commissioner of Customs. We are convinced that Notifications No. 250-Cus. and 251-Cus., both dated 27th August, 1983, issued by the Central Government in exercise of the powers conferred by sub-section (1) of the Section 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 Section 28 of the Act. In that view of the matter, we do not find any substance in the contention of Mr. V. Shekhar, learned Senior Counsel, appearing for the revenue in the second set of appeals, that the source of power to act as a “proper officer” is Sections 4 and 5 of the Act and not sub-section 34 of Section 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 Section 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. The argument is rejected accordingly.”
10. The above ruling of the Hon'ble Supreme Court is squarely applicable to the facts of the present case. Though the Collectors of Customs (Preventive) had been appointed by the Central Government under Section 4(1) of the Customs Act, 1962 to be a Collector of Customs, Bombay, Thane and Colaba districts vide Notification No. 250/83-Cus., dated 27-8-1983, there was no assignment of any function of the Commissioner to be discharged as ‘proper officer’.
11. As we have already indicated no evidence has been brought on record by the respondent to show that the Commissioner of Customs (Preventive) was specifically assigned the function of issuing the show-cause notice and adjudicating the same in relation to the subject imports which were made through New Custom House, Mumbai. In this scenario, the Hon'ble Supreme Court's decision in Syed Ali (supra) operates squarely in favour of the importers namely M/s. Nymex Traders and Shri C.D Shah. Penalty on Shri Bharat D. Doshi under Section 112 of the Customs Act, 1962 is consequential to the decision taken against M/s. Nymex Traders and Shri C.D Shah by the Commissioner. Therefore, the lack of jurisdiction for the Commissioner of Customs (Preventive) in this case becomes the common ground for allowing all the three appeals.
12. The impugned order is set aside in so far as these appellants are concerned. Their appeals are allowed.
(Dictated and pronounced in Court)