2018 (5) TMI 1568 - AT - Customs

Jurisdiction - power of DRI to issue SCN - competent authority or not? - Held that - similar issue come up in the case of Shri Manhindera Dagur vs. CC, New Delhi (Import & General) 2017 (6) TMI 662 - CESTAT NEW DELHI , where it was held that the DRI officers were not proper officers in terms of section 2(34) of the Customs Act, 1962 - appeal allowed by way of remand.

Summary

Issues:
Jurisdiction of DRI officers to issue show cause notice under Customs Act, 1962.

Analysis:
The appeals were filed against Order-in-Original Nos. 22 & 23/2009 dated 31/08/2009. The Tribunal ordered pre-deposit under Section 129E of Customs Act, 1962. The appellant filed a Writ Petition No. 41315/2011 before the Karnataka High Court, which directed the Tribunal to dispose of the appeals within four weeks. The appellant's counsel raised a preliminary objection regarding the jurisdiction of DRI officers to issue the show cause notice, citing the Hon'ble Delhi High Court's decision in Mangali Impex Ltd. vs. Union of India. The Tribunal noted similar issues had arisen before, including in the case of Shri Manhindera Dagur vs. CC, New Delhi, where the jurisdiction of DRI officers was questioned based on the Supreme Court decision in Commissioner of Customs vs. Sayed Ali.

After the Supreme Court's decision in Sayed Ali, amendments were made to the Customs Act, 1962, and a notification was issued assigning the function of the proper officer to various officers, including the Additional Director General, DRI. Subsequently, a provision was inserted assigning the functions of proper officers to various DRI officers with retrospective effect. The issue of DRI officers' jurisdiction to issue show cause notices came up before various High Courts, resulting in conflicting decisions. The matter eventually reached the Supreme Court, which granted a stay on the Delhi High Court's judgment. The High Court of Delhi, in the case of BSNL vs. UOI, dealt with a similar issue and granted liberty to review the challenge based on the outcome of appeals filed in the Supreme Court.

Considering the judgments and the totality of facts, the Tribunal followed the Delhi High Court's decision in the BSNL case and set aside the impugned order, remanding the matter to the original adjudicating authority to decide the jurisdiction issue after the Supreme Court's decision in Mangali Impex Ltd. The Tribunal allowed the appeals by way of remand, maintaining the status quo until a final decision is reached. Subsequently, the impugned order was set aside, and the matters were remanded to the Original Authority for a fresh decision, with the agreement of all parties involved.