IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.324 OF 2009 Internationalir Charter Operations (I) Pvt.Ltd..Petitioners vs Union of India & ors..Respondents ... Mr.Kamal Bulchandani with Ms L.K.Bulchandani and Ms.Tulsi A.Zanchi i.b Kamal & Co for Petitioner Mr.A.S.Rao with Mr.Rajinder Kumar for Respondent nos. 4 and 5. .. CORAM :F.I.Rebello and J.H.Bhatia, JJ Judgment reserved on: 9th April, 2009 Judgment pronounced On:23rd April, 2009 ORAL JUDGMENT{ Per F.I.Rebello, J } 1. The petitioners have approached this Court to contend that the respondent no.3 has no jurisdiction and consequently the show cause notice dated 17th/19th November, 2008 is without jurisdiction. 2.A few facts may be set out: The Petitioners have imported an aircraft to be operated for Non-scheduled(Passenger) Air Transport Services. The import of aircraft for the said purpose is exempt from customs duty.The respondent no. 3attached the aircraft as in their opinion,the same was being used in contravention of the import conditions and as such the petitioners were liable to pay income tax. Against the order of confiscation, the petitioners herein filed a Writ Petition being Writ Petition No. 2009of 2008 which was disposed of on18th September,2008.The prayer clauses in the said Writ Petition read as under : Petitioners therefore pray: (a) that this Hon'ble Court be pleased to issuea Writ of Certiorari or a writ, order or direction in the nature of certiorari,calling for the records before respondent nos.2 to 5 and after probing into the legality, propriety and validity of the seizure of the said aircraft and provisional release thereof against bank guarantee, to quash and set aside the said impugned seizure and declare the same illegal and also quash the illegal act of respondent nos.2 to 5 of obtaining of the bank guarantee by the respondents from the petitioners. (b) that this Hon'ble Court be pleased to issuea Writ of Mandamus, or a writ, order or direction in the nature of Mandamus directing respondent nos.2 to 5 to release the bank guarantee No.0156108IFG000134dated31.7.2008to the petitioner sand to adjudicate upon the issue after issuing the show cause notice within the time bound period as deemed fit by this Hon'ble Court ; (c)that pending the hearing and final disposal of the above Petition,this Hon'ble Court be pleased to : (i)direct the respondent nos.2 to 5to release thes aid bank guarantee No.0156108IFG000134 dated 31.7.2008. (ii)direct the respondent nos.2 to 5 to adjudicate the issue after issue of the show cause notice to the petitioners within the time bound period as deemed fit by this Hon'ble Court. (d)interim and ad interimreliefs in terms of prayer clause (c) hereinabove ; (e) such further and other reliefs as the nature and circumstances of the case require; (f)costs of the petition be provided for. 3.A learned bench of this Court in that Petition passed the following order: (1) The learned counsel appearing for the respondents states that an enquiry into the aspect whether the Aircraft which is the subject matter of this Writ Petition is to be confiscated or not will be conducted and final order would be passed as expeditiously as possible and in any case within a period of three months from today. (2)In view of the this statement,the learned counsel for the petitioners seeks leave to withdraw the writ petition. (3)The writ petition is permitted to be withdrawn. All contentions available to both the parties are kept open,to be raised at an appropriate stage." 4. Subsequent to this order, the respondent no. issued a show cause notice dated 17th November, 2008.It will be relevant to re-produce paragraph nos.17 and 18 of the said show cause notice: . Investigations also revealed that M/sIACO had entered into a lease agreement with Cessna Finance Corporation,Kansas,USA for financing the aircraft,Cessna CitationCJ2+on 13th December 2007 (RUD-9).The terms of lease agreement are inter alia that M/s IACO will will pay Rs.JPY 47lakh per month to Cessna Finance Corporation for a period of 12 0months. Subsequent to obtaining NSOP(passenger) permit,M/s IACO allowed the aircraft to be used by its director Shri P.N.Dhoot, Shri V.N.Dhoot who is the Chairman of M/s VIL, and their guests and relatives. On scrutiny of the flight log book, passenger manifest and details of invoices it is found that for the period 19.01.2008to 22.09.2008 (upto which the details were submitted), out of total 328 hrs and 5 minutes of flying 184 hrs and 55 minutes were used by M/s VIL." .On scrutiny of the passenger manifest(RUD)-10) submitted by M/s IACO it was found that the director of M/s IAC,Shri.P.N.Dhoot had extensively used the aircraft. The details of travels made by the director of M/s IACO Shri P.N.Dhoot and his relatives/family friends are as follows : -------------------------------------------------- S.No.Director and his Date From - To relatives of the company has travelled -------------------------------------------------- 1. R.N.Dhoot19.7.08 Aurangabad to Mumbai -------------------------------------------------- 2.V.N.Dhoot 27.6.08Ahmedabad P.N.Dhootto Mumbai -------------------------------------------------- 3.P.N.Dhoot 27.6.08Mumbai to R.N.DhootAhmedabad V.N.Dhoot -------------------------------------------------- 4.P.N.Dhoot 26.6.08 Mumbai to R.N.Dhoot Bhopal V.N.Dhoot -------------------------------------------------- 5.R.N.Dhoot 12.6.08 Mumbai to Delhi -------------------------------------------------- 6.V.N.Dhoot 7.6.08 Mangalore to Mumbai -------------------------------------------------- 7.P.N.Dhoot 26.5.08Aurangabad Saurav Dhoot to Mumbai -------------------------------------------------- 8.Saurav Dhoot26.5.08Mumbai to Aurangabad -------------------------------------------------- 9.V.N.Dhoot7.5.08Hud to Aurangabad -------------------------------------------------- 10.V.N.Dhoot7.5.08M umbai to R.N.Dhoot Hyderabad P.N.Dhoot -------------------------------------------------- 11.V.N.Dhoot21.2.08 Aurangabad to Mumbai -------------------------------------------------- The above chart prima facie shows that the aircraft was not used exclusively for providing non-scheduled passengerair transportr services for which it was imported.Thus it is a clear violation of the conditions of the notification No.61/2007-Cus dated 3.5.2007." 5.The petitioners here have filed their reply to the show cause notice.In reply, the principal contention was that the permit issued to them continues to be in force and valid.That permit is subject to compliance with the provisions of the Aircraft Act, 1934 and Aircraft Rules,1937. Violation of the terms and conditions of the permit it is submitted and/or cancellation of licence, would be by the authorities under the provisions of the said Act and Rules and under these circumstances, the respondent no.3 could not have proceeded to issue the show cause notice. The averments in the petition are to the similar effect. 6. A reply has been filed on behalf of the respondent nos.1, 3, 4 and 5 by Nikhil Chandra, working as Joint Commissioner of Customs (Preventive).It is set out that the Commissioner of Customs(Preventive),New Delhi is the competent authority to investigate, inquire and issues how cause notice to adjudicate and demand recovery of customs duties.It is set out that the show cause notice has been issued on the ground that the petitioners have violated the provisions of the customs notification by mis-declaring that the aircraft will be used for non-charter (passenger) operations.In fact, they are using the same for private purposes for rendering services to Videocon Industries which is the promoter company of the petitioners. The respondents therefore, prima facie are of reasonable belief that the petitioners have misused the customs notification and as such they are having jurisdiction to investigate and to take action for violation of the provisions of the customsAct, Rules and Notification issued. The respondent no.2 it is submitted is working in a different field. The respondent no.2 is an authority for regularisation of the operations of the aircraft, their registration, maintenance and safety norms etc. The renewal of permit is within the jurisdiction of DGCA.In the instant case, the respondents have issued the show cause notice on the ground of violation of customs notification and the conditions of licence issued by DGCA. 7. A rejoinder has been filed on behalf of the petitioners herein. 8. We may also mention that the petitioners pursuant to the confiscation of the aircraft had given a bond and a bank guarantee which has been accepted by the Chief Commissioner of Customs (Preventive)Delhi. The bond is in the sum of Rs.26crores and bank guarantee of Rs.6.5 crores. This is evident by letter dated 1st August,2008 by the Assistant Commissioner of Customs (Preventive) addressed to the Additional Commissioner(AIE). The petitioners by their communication of 1st August, 2008 have submitted the bond and a bank guarantee for the like amount to the respondent no.3. 9. We are here concerned with the import policy for Aircraft and Helicopters.Under the import policy under paragraph 2 any person who has been granted permission by the Ministry of Civil Aviation,Government of India,for operating scheduled or non-scheduled aircraft services including air transport services for import of aircrafts and helicopters can import the aircraft subject to conditions that the import of aircrafts and helicopters and use is in accordance with that permission. Under the policy, such an import can bed withoutt any import licence from the Directorate eneral of Foreign Trade, Ministry of Civil Aviation, Government of India.In the terms of exemption notification, the rate of duty is nil. Under the exemption, non-scheduled aircraft services have been described to mean'aircraft services other than schedule (passenger)'and aircraft services has been defined Rule3 of Aircraft Rules, 1995 Non-schedule charter services have also been defined.The petitioners by their letter of 7th December 2007addressed to the Director General of Civil Aviation had requested for NOC to import aircraft and had given an undertaking that the imported aircraft shall be used for non-scheduled aircraft (passengers) services only. On3rd July 2008 summons had been served on Shri.Hadi Alam,Director of the petitioners to give evidence.The petitioners have given their reply on 14th July, 2008.Subsequent to that, the aircraft was confiscated and a panchanama done by superdginamadated26thJuly, 2008and the aircraft was placed under possession of the petitioners for safety and security with directions set out therein. 10.The question therefore, under these circumstances would be whether the respondent no. 3hasthejurisdiction. The entir eargument advanced on behalf of the petitioners has been that as their licence issubsisting andthe authorities under the provisions of the Aircraft Rules have not cancelled the licence on the ground that it was not being used for the purpose for which it was licensed the authorities under the Customs Act have no jurisdiction. The entire assumption of jurisdiction by the respondent no.3 therefore it is stated is without jurisdiction. Reliance has been placed in the judgment of the Supreme Court in East India Commercial Co. Ltd, Calcutta vs Collector of Customs, Calcutta 1983 E.L.T. 1342(S.C.)to contend that if on a construction of the provisions the respondent has no jurisdiction to initiate proceedings or make an inquiry the Court can certainly prohibit the authorities from proceeding with the same. Reliance is also placed in the case of Hindalco Industries2003 (5) SCC 194 as also in some other judgments. The respondent authorities have placed reliance on the judgment of the Supreme Court in Special Directorvs Mohd.Ghulam Ghouse 2004 (164)E.L.T. 141(SC)and we may gainfully reproduce the following paragraphs : "This Court in a large number of cases has deprecated the practice of the High Courts entertaining writ petitions questioning legality of the show cause notices stalling enquiries as proposed and retarding investigative process to find actual facts with the participation and in the presence of the parties. Unless the High Court is satisfied that the show cause notice was totally non est in the eye of law for absolute want of jurisdiction of the authority to even investigate into facts, writ petitions should not be entertained for the mere asking and as a matter of routine and the writ petitioner should invariably be directed to respondent to the show cause notice and take all stands highlighted in the writ petition. Whether the show cause notice was founded on any legal premises is a jurisdictional issue which can even be urged by the recipient of the notice and such issues also can be adjudicated by the authority issuing the very notice initially,before the aggrieved could approach the Court. Further when the Court passes an interim order,it should be careful to see that the statutory functionaries specially and specifically constituted for the purpose ar enot denuded of powers and authority to initially decide the matter and ensure that ultimate relief which may or may not be finally granted in the writ petitions accorded to the writ petitioner even at the threshold by the interim protection granted." 11.After the order of confiscation, the petitioners had approached this Court.One of the reliefs prayed for by way of interim relief was to direct respondents nos.2 to 5 in that petition who are also respondents here to adjudicate the issue after issuance of show cause notice.On the respondents submitting that they will issue the necessary show cause notice,the petitioners herein withdrew the petition. The respondents thereafter have issued the show cause notice. Under these circumstances, though there can be no estoppel in law in contending that the authority which is exercising jurisdiction has no jurisdiction even though they have wrongly submitted to its jurisdiction, nevertheless in a case where the petitioners themselves were aware of exercise of jurisdiction by the respondent no.3 and had agreed to withdraw the petitionon the respondents issuing the show cause notice, to our mind,it would not be appropriate to permit the petitioner to invoke the extra-ordinary jurisdiction at this stage. The petitioners have already filed their reply to thes how cause notice. This therefore would not be a fit case for this court to exercise its extra-ordinary jurisdiction. 12. Secondly,primafacie this is not a case where the respondent no.3 could not have invoked its jurisdiction. The goods(Aircraft)were imported without paying customs duty pursuant to an exemption under the Customs Act on the ground that the aircraft would be used only for the purposes set out at the time of import. The show causen otice prima facie shows that it is being used for the purpose other than for which it was allowed to be imported.It is for the petitioners to point out that the allegations as contained in the show cause notice are non-existent or cannot lead to withdrawal of the exemption benefit.This is not a case of patent lack of jurisdiction in the the respondent no.3.Admittedly, the show cause notice proceeds on the footing that the petitioners have violated the provisions of the Customs Act, Rules and Notifications by allowing use of the aircraft for the purposes other than which for NOC had been granted for its import and exempted from customs duty.On facts herein the case would be squarely covered by the ratio of the judgment in Mohd.Ghulam Ghouse (supra). 13. For all the aforesaid reasons,in our opinion,this would not be a fit case for this Court to exercise its extra-ordinary jurisdiction. It would be open to the petitioners to raise all contentions available before the respondent no.3 and it is for the respondent no.3 to decide the same including lack of jurisdiction. Prima facie, the observations made while dismissing the petition will not stand in the way of the petitioner surging its contentions and it is for respondent no.3 to decide the matters on merits uninfluenced by our prima facie observations as to jurisdiction. For the aforesaid reasons,petition is dismissed. { J.H.Bhatia, J } { F.I.Rebello, J }