2017 (7) TMI 43 - 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

The judgment revolves around the issue of jurisdiction of Directorate of Revenue Intelligence (DRI) officers to issue show cause notices under the Customs Act. The appellant contested the validity of the show cause notice issued by DRI, citing a High Court decision. The Department, however, supported the notice and urged the case to be decided on merit. The Tribunal delved into the matter, considering legal precedents and amendments to the Customs Act. The key contention was whether DRI officers were proper officers under the Customs Act, as per a Supreme Court ruling in a previous case. Subsequent amendments and notifications were analyzed, including the assignment of proper officer functions to DRI officers. The Tribunal noted conflicting High Court decisions on the issue, leading to an appeal before the Supreme Court, which stayed the Delhi High Court judgment. Another Delhi High Court case was referenced, granting liberty to review the challenge based on the outcome of Supreme Court appeals. Considering these aspects, the Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority to decide jurisdiction post the Supreme Court decision, ensuring the appellant's right to be heard. The status quo was to be maintained until a final decision, ultimately allowing the appeals by the assessee through remand.