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2017 (5) TMI 1436 - AT - CustomsJurisdiction of the DRI officers to issue SCN - scope of proper officer - Availing of fraudulent duty exemptions - Held that - sub-section 11 was inserted under Section 28 of the Customs (Amendment and Validation) Act 2011 dt. 16/09/2011 assigning the functions of proper officers to various DRI officers with retrospective effect - Later on i.e. for the period subsequent to the amendment the issue of DRI officers having the proper jurisdiction to issue the SCN came up before the Hon ble Delhi High Court in the case of Mangali Impex Vs. UOI 2016 (5) TMI 225 - DELHI HIGH COURT inter alia laying down that even a new inserted Section 28(11) does not empower either the officers of DRI or the DGCEI to adjudicate the SCN issued by them for the period prior to 08/04/2011. There are two views holding the field and the matter now stand before the Hon ble Supreme Court - matters remanded to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Supreme Court decision in the case of Mangali Impex. Appeal allowed by way of remand.
Issues:
Jurisdiction of DRI Officers to issue show cause notice under the Customs Act. Analysis: In this case, the appeal was filed against an order passed by the Commissioner of Customs, New Delhi. The Tribunal had already condoned the delay in a separate order. The Department alleged that exporters tried to export poor quality goods at inflated values to claim ineligible export benefits. The assessee had filed a Writ Petition in the High Court, which was dismissed, leading them to approach the CESTAT. The main issue in the appeal was the jurisdiction of DRI Officers to issue show cause notices under the Customs Act. The assessee contended that DRI officers were not proper officers as per the Customs Act, citing a Supreme Court decision. The Customs Act was subsequently amended after the Supreme Court's ruling, and a notification was issued assigning the functions of proper officers to various officers, including the Additional Director General of DRI. This notification empowered the Additional Director General of DRI to issue demand notices under the Customs Act from a specified date. A subsection was later inserted in the Customs Act, assigning proper officer functions to DRI officers with retrospective effect. The issue of DRI officers' jurisdiction was also addressed by the Delhi High Court, which favored the assessee. However, the Supreme Court stayed this decision. Other High Courts had differing views on the matter, leading to conflicting judgments. The Supreme Court had previously remanded a similar matter to the Tribunal for reevaluation in light of a previous decision. Given the conflicting decisions, the Tribunal decided to set aside the impugned orders and remand the matters to the original adjudicating authority to first decide the jurisdiction issue in light of the Supreme Court's decision and then evaluate the case on its merits. Ultimately, the appeal was allowed by way of remand, and the operative part of the order was pronounced in open court on a specified date.
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