2017 (7) TMI 4 - AT - Customs

Jurisdiction of Directorate of Revenue Intelligence (DRI) - power to issue SCN - Held that - sub-section 11 was inserted under section 28 of the Customs (Amendment and Validation) Act, 2011 dated 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 matter i.e. the DRI officers having the proper jurisdiction to issue the SCN or not had come up before the Hon ble Delhi High Court in the case of Mangali Impex vs. Union of India 2016 (5) TMI 225 - DELHI HIGH COURT , and the High Court inter alia, held that even the new inserted section 28(11) does not empower either the officers of DRI or the DGCEI to issue the SCN for the period prior to 8.4.11. 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 and then on merits of the case but by providing an opportunity to the assessee of being heard - appeal allowed by way of remand.

Summary

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

In the present case, the appellants challenged the show cause notice issued by the Directorate of Revenue Intelligence (DRI), citing a Delhi High Court judgment that deemed DRI incompetent to issue such notices. The Department defended the notice's validity. The Tribunal analyzed the jurisdictional issue, referring to a Supreme Court decision and subsequent amendments to the Customs Act. It noted that a notification designated the Additional Director General, DRI as a 'proper officer' from a specified date. A subsequent amendment retroactively assigned proper officer functions to DRI officers. The Tribunal highlighted conflicting High Court decisions on the issue, leading to the matter being before the Supreme Court. The Tribunal also mentioned a Delhi High Court judgment granting liberty to review the challenge based on the outcome of Supreme Court appeals. Ultimately, following the Delhi High Court's precedent and considering the circumstances, the Tribunal set aside the impugned order and remanded the matter for the adjudicating authority to decide the jurisdiction issue post the Supreme Court's decision, ensuring the assessee's right to be heard. The status quo was to be maintained until a final decision, and the appeals were allowed by way of remand.