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2017 (6) TMI 30 - AT - CustomsJurisdiction of the DRI officers to issue SCN - scope of proper officer - Availing of fraudulent duty exemptions - Held that - sub-section 11 was inserted under Section 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 - Later on i.e. for the period subsequent to the amendment the issue of DRI officers having the proper jurisdiction to issue the SCN came up before the Hon ble Delhi High Court in the case of Mangali Impex Vs. UOI 2016 (5) TMI 225 - DELHI HIGH COURT inter alia laying down that even a new inserted Section 28(11) does not empower either the officers of DRI or the DGCEI to adjudicate the SCN issued by them for the period prior to 08/04/2011. There are two views holding the field and the matter now stand before the Hon ble Supreme Court - matters remanded to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Supreme Court decision in the case of Mangali Impex. Appeal allowed by way of remand.
Issues:
1. Jurisdiction of DRI officers to issue show-cause notice under the Customs Act. Analysis: The case involved M/s. BPL Ltd., accused of fraudulently claiming duty exemptions for importing components for medical equipment. The Additional Director General, DRI issued a show-cause notice proposing confiscation of goods and demanding customs duties. The Commissioner of Customs adjudicated the matter, leading to two appeals by M/s. BPL Ltd. and its General Manager. The primary issue was the jurisdiction of DRI officers to issue show-cause notices under the Customs Act. The Apex Court clarified in CC Vs. Sayed Ali that DRI officers were not proper officers under Section 2(34) of the Customs Act, 1962. Subsequently, the Customs Act was amended in 2011 to address this issue. Notification No.44/2011-Cus (NT) appointed the Additional Director General, DRI as a 'proper officer' from 06/07/2011 for Section 28 purposes. Additionally, Section 28(11) was inserted with retrospective effect, designating DRI officers as proper officers. However, conflicting views emerged from different High Courts. The Hon'ble Delhi High Court in Mangali Impex Vs. UOI held that DRI officers lacked jurisdiction to adjudicate show-cause notices issued before 08/04/2011. Conversely, the Hon'ble Mumbai High Court and High Court of Telangana and Andhra Pradesh took a different stance. The matter reached the Hon'ble Supreme Court due to these conflicting decisions. Considering the uncertainty and the pending Supreme Court decision, the Tribunal set aside the impugned orders and remanded the case to the original adjudicating authority. The authority was directed to first decide the jurisdiction issue post the Supreme Court's decision in Mangali Impex and then assess the case on its merits. As a result, the appeals were allowed by way of remand, awaiting further clarification from the Supreme Court. In conclusion, the judgment addressed the jurisdictional issue regarding DRI officers' authority to issue show-cause notices under the Customs Act, highlighting conflicting interpretations by different High Courts and the need for Supreme Court intervention to resolve the matter conclusively.
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