2017 (5) TMI 1232 - AT - Customs

Jurisdiction of the DRI officers to issue SCN - Held that - w.e.f. 06/07/2011, the Additional Director General, DRI was prospectively appointed as proper officer for the purpose of Section 28 of the Customs Act - Subsequently, sub-section 11 was inserted u/s 28 of the Customs (Amendment and Validation) Act, 2011 dt. 16/09/2011, assigning the functions of proper officers to various DRI officers with retrospective effect. Matters remanded to the original adjudicating authority to first decide the issue of jurisdiction - appeal allowed by way of remand.

Summary

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

The judgment by the Appellate Tribunal CESTAT Bangalore involved an appeal related to the jurisdiction of DRI officers to issue show-cause notices under the Customs Act. The case originated from an investigation into the diversion of duty-free imported goods by M/s. Amisha International. The DRI officers intercepted a container purportedly carrying export cargo from the company, which was found to contain bricks instead of the declared export product. The Additional Director General, DRI issued a show-cause notice proposing confiscation of seized goods, customs duties, and penalties. The impugned order adjudicating the show-cause notice was challenged through multiple appeals.

The Tribunal noted a preliminary issue regarding the jurisdiction of DRI officers to issue show-cause notices under the Customs Act. Referring to a Supreme Court decision in the case of CC Vs. Sayed Ali, it was observed that DRI officers were not considered proper officers under Section 2(34) of the Customs Act, 1962. The Tribunal highlighted that subsequent amendments to Section 28 of the Customs Act were made to address the implications of the Supreme Court's judgment.

The Tribunal discussed the amendments made to Section 28 of the Customs Act, particularly through Notification No.44/2011-Cus (NT), which designated various officers, including the Additional Director General, DRI, as proper officers for the purposes of Section 28. The retrospective assignment of proper officer functions to DRI officers was also addressed through subsequent amendments. The Tribunal referenced a Delhi High Court case and conflicting views from other High Courts on the jurisdiction of DRI officers to issue show-cause notices.

Considering the conflicting decisions from different High Courts and the pending matter before the Supreme Court, the Tribunal decided to set aside the impugned orders and remand the case to the original adjudicating authority. The Tribunal directed the authority to first determine the issue of jurisdiction in light of the Supreme Court decision in a specific case and then proceed to evaluate the merits of the case. As a result, the appeals were allowed by way of remand, and miscellaneous applications were disposed of accordingly.