2017 (9) TMI 1985 - AT - Customs

Jurisdiction - power of DRI to issue SCN - HELD THAT - It appears that the preliminary issue which emerges in the present appeal is regarding the jurisdiction of the DRI to issue the show-cause notice under the Customs Act. The assessee-Respondent has taken a stand that in terms of the Hon ble Apex Court decision in the case of COMMISSIONER OF CUSTOMS VERSUS SAYED ALI 2011 (2) TMI 5 - SUPREME COURT the DRI officers were not proper officers in terms of section 2(34) of the Customs Act 1962. It may be mentioned that recently the Hon ble High Court of Delhi in the case of BHARAT SANCHAR NIGAM LIMITED VERSUS UNION OF INDIA ORS 2017 (6) TMI 688 - DELHI HIGH COURT has dealt with the identical issue where the notice was also issued by DRI. The Hon ble High Court of Delhi has considered the judgment in the case of M/S MANGALI IMPEX LTD. M/S PACE INTERNATIONAL AND OTHERS VERSUS UNION OF INDIA AND OTHERS 2016 (5) TMI 225 - DELHI HIGH COURT which is stayed by the Hon ble Supreme Court in UNION OF INDIA VERSUS MANGALI IMPEX LTD. 2016 (8) TMI 1181 - SC ORDER . Finally the Hon ble High Court has granted liberty to the petitioner by observing that petitioner is permitted to review the challenge depending on the outcome of the appeals filed by the UOI in the Supreme Court against the judgment of the Court in the case of Mangli Impex Ltd. The appeals are allowed by way of remand to the adjudicating authority to decide the issue afresh after the judgment of the Hon ble Supreme Court in the case of Mangli Impex.

Summary

Issues: Jurisdiction of DRI to issue show-cause notice under Customs Act

The judgment revolves around the jurisdiction of the Directorate of Revenue Intelligence (DRI) to issue show-cause notices under the Customs Act. The case originated from a show-cause notice issued by DRI, Chennai, which was challenged based on the competence of DRI to issue such notices. The appellant argued that DRI officers were not proper officers under the Customs Act, citing a Supreme Court decision. Subsequent amendments to the Customs Act and a notification by CBEC were discussed to address the issue. The judgment highlighted conflicting decisions by different High Courts and the matter being sub judice before the Supreme Court. The High Court of Delhi's stance in a similar case was considered, leading to the decision to set aside the impugned order and remand the matter for reconsideration by the adjudicating authority after the Supreme Court's decision in a related case.

The judgment delves into the history of the case, starting with the initiation of proceedings by a show-cause notice from DRI, Chennai, and the subsequent challenge to DRI's jurisdiction to issue such notices. The appellant relied on a Supreme Court decision to support their argument that DRI officers were not proper officers under the Customs Act. Amendments to the Customs Act and a notification by CBEC were discussed to explain the changes regarding the appointment of proper officers. The judgment noted conflicting decisions by different High Courts on the issue, leading to the matter being brought before the Supreme Court, which granted a stay on the Delhi High Court's judgment. A recent decision by the High Court of Delhi in a similar case was also considered, influencing the decision to remand the case for further consideration after the Supreme Court's ruling in a related case.

The judgment extensively discussed the legal aspects related to the jurisdiction of DRI to issue show-cause notices under the Customs Act. It analyzed the implications of a Supreme Court decision, subsequent amendments to the Customs Act, and a notification by CBEC appointing officers as proper officers. The conflicting decisions by various High Courts on the issue were highlighted, leading to the matter being brought before the Supreme Court. The judgment considered a recent decision by the High Court of Delhi in a similar case and decided to set aside the impugned order, remanding the case for reconsideration by the adjudicating authority after the Supreme Court's decision in a related case. The status quo was to be maintained until the final decision, ensuring the appellant's right to be heard in the process.