2017 (9) TMI 1085 - AT - Customs

Jurisdiction - power of DRI to issue SCN - proper officer - 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 D.R.I. Officers as 'proper officer' for demand proceedings under Customs Act, 1962.

Analysis:
The judgment deals with the dispute regarding the jurisdiction of D.R.I. Officers to issue show cause notices for imports made prior to April 2011. The High Court ruled in the case of Mangli Implex Vs. Union of India that D.R.I. Officers are not competent to issue such notices. Various Tribunal benches have set aside impugned orders and remanded the matters to the original authority to decide on jurisdiction and case merits. The Tribunal referred to a case involving M/s. HR Electronics, highlighting the issue of jurisdiction under the Customs Act. The Hon'ble Supreme Court's decision in the case of Commissioner of Customs Vs. Sayed Ali was also considered, leading to amendments in section 28 of the Customs Act in 2011.

The judgment discussed the amendment of section 28 of the Customs Act in 2011, empowering the Additional Director General, DRI as the 'proper officer' from July 6, 2011. Subsequently, sub-section 11 was inserted with retrospective effect, assigning proper officer functions to various DRI officers. Conflicting views on DRI officers' jurisdiction were noted in different High Court cases, leading to the matter being subjudice before the Supreme Court. The judgment highlighted the conflicting decisions of various High Courts and the stay granted by the Supreme Court on the Delhi High Court's judgment.

Furthermore, the judgment referenced a case involving BSNL, where the High Court of Delhi granted liberty to the petitioner to review the challenge based on the outcome of appeals filed by the Union of India in the Supreme Court. Following the ratio laid down by the High Court of Delhi in the BSNL case, the impugned order was set aside, and the matter was remanded to the original adjudicating authority to decide on jurisdiction and case merits, ensuring the assessee's right to be heard. The status quo was to be maintained until a final decision was reached.

The Tribunal's observations in the Supro Overseas Pvt. Ltd. case were also considered, emphasizing the need to send appeals back to the adjudicating authority pending the apex court's decision in the Mangali Implex Case. The Tribunal's decision to set aside the impugned order and remand the matter to the Original Authority aligned with the above observations, ensuring that status quo was maintained during the interim period. Ultimately, the appeal filed by the appellant was allowed by way of remand, following the principles established in the discussed cases.