2017 (9) TMI 440 - AT - Customs

Jurisdiction - power of SIB to issue SCN - Held that - the notice issued by the DRI who was not a competent authority as per the ratio laid down in the case of Mangali Impex Ltd. Vs. UOI 2016 (5) TMI 225 - DELHI HIGH COURT - In this connection we note that similar issues have been dealt with in various cases by the Tribunal recently. It is held that the matters have to be remanded back to the original authority for a decision - appeal allowed by way of remand.

Summary

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

Analysis:
The judgment deals with the issue of the jurisdiction of Directorate of Revenue Intelligence (DRI) officers to issue show cause notices under the Customs Act. The appellant argued that DRI officers were not proper officers as per the Customs Act, citing the decision in the case of Commissioner of Customs vs. Sayed Ali. Subsequently, amendments were made to the Customs Act, and Notification No. 44/2011-Cus (NT) was issued, empowering Additional Director General, DRI to issue demand notices under Section 28 of the Act from July 6, 2011. A subsequent amendment assigned proper officer functions to DRI officers with retrospective effect. However, conflicting decisions arose from different High Courts regarding the jurisdiction of DRI officers to issue show cause notices. The matter eventually reached the Supreme Court, which stayed the Delhi High Court's judgment, making the issue sub-judice before the Supreme Court. The Tribunal, following the Delhi High Court's decision in another case, set aside the impugned order and remanded the matter to the original adjudicating authority to decide the jurisdiction issue after the Supreme Court's decision in the Mangali Impex Ltd. case. The Tribunal allowed the appeals by way of remand, maintaining status quo until a final decision is reached.

In conclusion, the judgment emphasizes the importance of determining the jurisdiction of DRI officers to issue show cause notices under the Customs Act. The legal developments, including amendments to the Act and conflicting High Court decisions, have led to uncertainty in this regard. The Tribunal's decision to remand the matters for fresh decision reflects the need for clarity on this issue pending the Supreme Court's ruling. The judgment underscores the significance of following legal precedents and awaiting higher court decisions in matters of jurisdiction and procedural fairness in customs cases.