2017 (9) TMI 1802 - AT - Customs

Jurisdiction - power of Commissioner of Customs (Preventive) to issue SCN - Held that - Similar issue has come up before this Tribunal on many earlier occasions also. The Tribunal remanded the cases to the original adjudicating authority - Reliance placed in the case of M/S SHRI MAHINDERA DUGAR SHRI MAHENDER DUGAR AND PHOTOCOPING SERVICES VERSUS CC NEW DELHI (IMPORT & GENERAL) 2017 (6) TMI 662 - CESTAT NEW DELHI . Matter remanded to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Hon ble Supreme Court decision in the case of Mangli Impex 2016 (8) TMI 1181 - SUPREME COURT and then on merits of the case but by providing an opportunity to the assessee of being heard. Till the final decision the status quo will be maintained. Appeal allowed by way of remand.

Summary

Issues: Jurisdiction of DRI Officers to issue show cause notice under Customs Act, Competency of DRI/Preventive to issue notice, Conflicting decisions of various High Courts, Stay granted by Supreme Court on Delhi High Court judgment

In this case, the main issue revolves around the jurisdiction of DRI Officers to issue show cause notices under the Customs Act. The appellant argued that DRI officers were not proper officers as per the decision in the case of Commissioner of Customs Vs. Sayed Ali. The Hon'ble Supreme Court's decision led to the amendment of Section 28 of the Customs Act in 2011, empowering Additional Director General, DRI as a 'proper officer' from July 6, 2011. Subsequently, a retrospective effect was given to this amendment. However, conflicting views emerged from different High Courts, with the Delhi High Court ruling in favor of the assessee, while the Bombay High Court and the High Court of Telangana and Andhra Pradesh took a different stance. The matter was escalated to the Supreme Court, which granted a stay on the Delhi High Court's judgment, making the issue sub judice. The Delhi High Court's decision in the case of BSNL also addressed a similar issue, providing the petitioner with the liberty to review the challenge based on the outcome of the appeals filed by the Union of India in the Supreme Court against the Mangli Impex Ltd. judgment.

The Tribunal, considering the totality of facts and circumstances, followed the Delhi High Court's decision in the BSNL case and set aside the impugned order. The matter was remanded to the original adjudicating authority to first decide the jurisdiction issue post the Supreme Court's decision in the Mangli Impex case and then proceed on the merits of the case, ensuring the appellant's right to be heard. The status quo was to be maintained until a final decision was reached. The Tribunal's decision aligned with the previous judgments and the principles laid down by the Delhi High Court, emphasizing the importance of resolving the jurisdictional issue before delving into the merits of the case.

Overall, the judgment delves into the complexities surrounding the jurisdiction of DRI Officers to issue show cause notices, highlighting the legal amendments, conflicting High Court decisions, and the intervention of the Supreme Court in granting a stay on certain judgments. The decision underscores the significance of clarity on jurisdictional matters before proceeding with the adjudication of cases under the Customs Act, ensuring a fair and legally sound process for all parties involved.