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2017 (6) TMI 31 - 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.
In the present case, the issue of jurisdiction of DRI officers to issue show-cause notice under the Customs Act was examined. The Apex Court's decision in CC Vs. Sayed Ali highlighted that DRI officers were not considered proper officers under Section 2(34) of the Customs Act, 1962. Following this, amendments were made to Section 28 of the Customs Act, 1962, effective from 08/04/2011, to address the jurisdictional concerns. Notification No.44/2011-Cus (NT) dated 06/07/2011 appointed the Additional Director General, DRI as a 'proper officer' for the purpose of Section 28 of the Act. Subsequently, sub-section 11 was inserted under Section 28 of the Customs (Amendment and Validation) Act, 2011, assigning proper officer functions to various DRI officers with retrospective effect. The issue of DRI officers' jurisdiction was also addressed by different High Courts. The Hon'ble Delhi High Court in the case of Mangali Impex Vs. UOI held that the newly inserted Section 28(11) did not empower DRI officers to adjudicate show-cause notices issued before 08/04/2011. However, this decision was stayed by the Hon'ble Supreme Court. Conversely, the Hon'ble Mumbai High Court and the Hon'ble High Court of Telangana and Andhra Pradesh took a different view on the matter. With conflicting decisions from various High Courts, the issue was brought before the Hon'ble Supreme Court. In a previous case, the Supreme Court had remanded a similar matter to the Tribunal for reevaluation in light of the Sayed Ali decision. Given the conflicting views, the Tribunal decided to set aside the impugned orders and remand the matters to the original adjudicating authority to first determine the jurisdiction issue after considering the Supreme Court's decision in the Mangali Impex case and then assess the case on its merits. Ultimately, the appeal was allowed by way of remand.
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