2017 (1) TMI 748 - HC - Customs

Jurisdiction - scope of judicial review of a SCN - whether the Directorate of Revenue Intelligence has power to issue SCN? - Held that - the issue is no longer res integra in view of the judgment of this Court in Abishek Mundhra vs. A.D.G., D.G. of Revenue Intelligence, Chennai 2015 (7) TMI 417 - MADRAS HIGH COURT , where it was held that all officers of the Directorate of Revenue Intelligence to be Officers of Customs and the Notifications dated 26-4-1990, 6-7-2011 and 21-6-2012 and the Circulars dated 15-2-1999 and 23-9-2009, make it manifestly clear that DRI officials have been appointed as customs officers by in exercise of the powers conferred under Section 4(1) of the Act - the officials empowered to issue SCN - petition dismissed - decided in favor of Revenue.

Summary

Issues:
1. Jurisdiction of Directorate of Revenue Intelligence to issue show cause notice under the Customs Act.
2. Scope of judicial review of a show cause notice.

Analysis:
1. The case involved a writ petition challenging a show cause notice issued by the Directorate of Revenue Intelligence based on specific intelligence regarding the illegal diversion of imported goods. The investigation revealed that the petitioner had not fulfilled export obligations under certain licenses and had diverted duty-free imported inputs to other entities. The petitioner contended that the Directorate of Revenue Intelligence lacked jurisdiction to issue the show cause notice, arguing that it was unlawful. However, the court cited precedent, including the judgment in Abishek Mundhra vs. A.D.G., D.G. of Revenue Intelligence, Chennai, to establish the authority of the Directorate of Revenue Intelligence to issue such notices. Additionally, the court referenced the Supreme Court judgment in Sheshank Sea Foods Pvt. Ltd. vs. Union of India to affirm the jurisdiction of Customs authorities, including the Directorate of Revenue Intelligence, to investigate violations of advance license terms. Consequently, the court dismissed the writ petition, allowing the petitioner to seek legal recourse through appropriate channels.

2. The court emphasized the limited scope of judicial review concerning show cause notices, stating that the focus should primarily be on whether the issuing officer had the jurisdiction to do so. In this case, the court found that the Directorate of Revenue Intelligence possessed the requisite authority to issue the show cause notice under the Customs Act. By referencing relevant legal precedents, the court reinforced the legitimacy of the notice and the jurisdiction of the Customs authorities, thereby upholding the validity of the investigative process. Ultimately, the court dismissed the writ petition while granting the petitioner the option to pursue legal remedies within the framework of the law.