2017 (6) TMI 662 - AT - Customs

Jurisdiction of Directorate of Revenue Intelligence (DRI) - power to issue SCN - Held that - sub-section 11 was inserted under section 28 of the Customs (Amendment and Validation) Act 2011 dated 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 matter i.e. the DRI officers having the proper jurisdiction to issue the SCN or not had come up before the Hon ble Delhi High Court in the case of Mangali Impex vs. Union of India 2016 (5) TMI 225 - DELHI HIGH COURT and the High Court inter alia held that even the new inserted section 28(11) does not empower either the officers of DRI or the DGCEI to issue the SCN for the period prior to 8.4.11. Matter remanded to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Hon ble Supreme Court decision in the case of Mangli Impex and then on merits of the case but by providing an opportunity to the assessee of being heard - appeal allowed by way of remand.

Summary

Issues:
1. Jurisdiction of Directorate of Revenue Intelligence (DRI) officers to issue show cause notices under the Customs Act.

Detailed Analysis:
The appellant filed appeals against certain orders and sought waiver of the pre-deposit condition. Both parties agreed that the proceedings were initiated by DRI officers. The appellant argued that DRI was not competent to issue show cause notices, citing a Delhi High Court case. The Department's counsel defended the notice issued by DRI and requested a decision on merit. The Tribunal considered the jurisdiction issue arising from the appellant's stand that DRI officers were not proper officers under the Customs Act, referring to a Supreme Court decision. The Tribunal noted amendments to Section 28 of the Customs Act and a CBEC notification appointing DRI officers as proper officers from a certain date. Subsequently, a provision was inserted assigning proper officer functions to DRI officers retrospectively. The Tribunal highlighted conflicting decisions from different High Courts on the issue, leading to the matter being sub judice before the Supreme Court. Reference was made to a recent Delhi High Court case dealing with a similar issue and granting liberty to review depending on the Supreme Court's decision. Considering the Delhi High Court's ratio in that case, the Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority for a decision on jurisdiction post the Supreme Court's decision, followed by a decision on merits with a hearing opportunity for the assessee while maintaining the status quo.

Outcome:
The Tribunal allowed the appeals by remanding the matter for further consideration, disposing of the stay applications in the process.