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2017 (8) TMI 1149 - 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 - I set aside the impugned orders and remand the matter 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 M/s Mangali Impex Ltd., M/s Pace International And Others Versus Union of India And Others 2016 (5) TMI 225 - DELHI HIGH COURT - appeal allowed by way of remand.
Issues:
1. Jurisdiction of officers to issue notice under Customs Act, 1962. 2. Interpretation of the amendments to section 28 of the Customs Act, 1962. 3. Conflict between High Courts on the authority of DRI officers to issue show cause notices (SCN). 4. Stay granted by the Supreme Court on the Delhi High Court judgment. 5. Application of Delhi High Court judgment in similar cases. Jurisdiction of officers to issue notice under Customs Act, 1962: The Tribunal noted the issue of jurisdiction of officers to issue notices under the Customs Act, 1962, which had been a subject of various High Court decisions. Referring to the case of M/s.HR Electronics, M/s.Laxmi Radios v. Commissioner of Customs, New Delhi, the Tribunal highlighted the conflicting opinions among High Courts. The Tribunal discussed the impact of the Hon’ble Supreme Court's decision in the case of Commissioner of Customs Vs. Sayed Ali, which led to amendments in section 28 of the Customs Act, 1962. The Tribunal also mentioned the subsequent notifications and amendments that empowered DRI officers, leading to conflicting decisions among High Courts. Interpretation of the amendments to section 28 of the Customs Act, 1962: The Tribunal discussed the amendments to section 28 of the Customs Act, 1962, which were made in response to the Supreme Court's decision in the case of Commissioner of Customs Vs. Sayed Ali. The amendments, including Notification No. 44/2011-Cus (NT) and the insertion of sub-Section 11 under Section 28, aimed to clarify the functions of proper officers, particularly DRI officers. The Tribunal highlighted the retrospective and prospective appointments of Additional Director General, DRI, as the proper officer for issuing demand notices under Section 28. Conflict between High Courts on the authority of DRI officers to issue show cause notices (SCN): The Tribunal discussed the conflicting decisions of various High Courts regarding the authority of DRI officers to issue show cause notices before and after the amendments to section 28 of the Customs Act, 1962. The Tribunal mentioned the contrasting views of the Delhi High Court, Mumbai High Court, and the High Court of Telangana and Andhra Pradesh on this issue. The matter eventually reached the Supreme Court, which granted a stay on the Delhi High Court judgment, indicating that the issue was pending further adjudication. Stay granted by the Supreme Court on the Delhi High Court judgment: The Tribunal highlighted the stay granted by the Supreme Court on the judgment of the Delhi High Court in the case of Mangali Impex Vs. Union of India. The stay was related to the authority of DRI officers to issue show cause notices under the Customs Act, 1962. The Tribunal noted that the issue was subjudice before the Supreme Court, awaiting a final decision on the matter. Application of Delhi High Court judgment in similar cases: The Tribunal referred to a similar case before the Delhi High Court involving the issuance of notices by DRI, where the High Court had granted liberty to the petitioner pending the outcome of the appeals filed by the Union of India in the Supreme Court. The Tribunal, following the ratio laid down by the Delhi High Court in that case, set aside the impugned order and remanded the matter to the original adjudicating authority for a decision on jurisdiction and merits after the Supreme Court's decision in the pending appeals. The status quo was to be maintained until a final decision was reached.
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