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2017 (8) TMI 345 - AT - CustomsJurisdiction - power of DRI to issue SCN - Held that - the powers of officers working in these organizations to issue notice under Customs Act, 1962 as proper officers has been subject matter of decision by various High Courts - the matter remanded to the original authority to decide the question of jurisdiction first and thereafter on merit after the matter is settled by the Hon ble Supreme Court in the pending appeals by the Revenue against the decision of Hon ble Delhi High Court in the case of Mangali Impex Vs. Union of India 2016 (5) TMI 225 - DELHI HIGH COURT - appeal allowed by way of remand.
Issues involved:
1. Jurisdiction of DRI officers to issue show cause notices under the Customs Act, 1962. 2. Conflict of decisions among various High Courts regarding the proper officers empowered to issue demand notices. 3. Effect of amendments in the Customs Act, 1962 on the jurisdiction of DRI officers. 4. Stay granted by the Hon'ble Supreme Court on conflicting judgments of High Courts. 5. Application of judgments in similar cases to set aside impugned orders and remand the matter for reconsideration. Analysis: Issue 1: Jurisdiction of DRI officers The appeals were against impugned orders resulting from proceedings initiated by DRI/SIB/Commissioner of Customs(Prev.). The question of jurisdiction of these officers to issue notices under the Customs Act, 1962 was raised. The Tribunal referred to a case where the assessee argued that DRI officers were not proper officers as per the Customs Act, 1962. Subsequent amendments and notifications were discussed, empowering DRI officers to issue demand notices under Section 28 from specific dates. The Tribunal noted conflicting decisions of High Courts on this issue, leading to the matter being subjudice before the Hon'ble Supreme Court. Issue 2: Conflict of High Court decisions Various High Courts had conflicting views on whether DRI officers had jurisdiction to issue show cause notices prior to specific dates. The Hon'ble Delhi High Court ruled in favor of the assessee, while other High Courts took a contrary stance. The conflicting decisions led the matter to the Hon'ble Supreme Court, which stayed the operation of the Delhi High Court judgment pending further review. Issue 3: Amendments in the Customs Act Amendments in the Customs Act, 1962, including the insertion of sub-Section 11 under Section 28, assigned the functions of proper officers to DRI officers with retrospective effect. However, the interpretation and application of these amendments were subject to differing opinions among High Courts, leading to uncertainty regarding the jurisdiction of DRI officers. Issue 4: Stay by the Supreme Court The conflicting decisions of various High Courts prompted the matter to be taken up by the Hon'ble Supreme Court, which granted a stay on the Delhi High Court judgment. This stay indicated that the issue was still under consideration and pending final adjudication by the Supreme Court. Issue 5: Application of judgments in similar cases Considering the similar set of facts and legal questions involved, the Tribunal decided to set aside the impugned orders and remand the matter to the original authority. The Tribunal directed the original adjudicating authority to first decide the jurisdiction issue after the Supreme Court's decision and then proceed on merits, ensuring the assessee's right to be heard. The status quo was to be maintained until a final decision was reached. Overall, the judgment highlighted the complexity and significance of determining the jurisdiction of DRI officers under the Customs Act, 1962, amidst conflicting interpretations by different High Courts and pending review by the Hon'ble Supreme Court. The decision to remand the matter for reconsideration after the Supreme Court's ruling aimed to provide clarity and fair opportunity for all parties involved.
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