2017 (6) TMI 963 - AT - Customs

Jurisdiction - power of DRI/SIIB to issue SCN - Held that - similar issue has come up before this Tribunal on many earlier occasions also. The Tribunal remanded the cases to the original adjudicating authority - appeal allowed by way of remand.

Summary

Issues Involved: Jurisdiction of DRI/SIIB to issue show cause notices under the Customs Act

Detailed Analysis:

1. Issue of Jurisdiction: The appellant challenged the show cause notice issued by the Officers of SIIB, contending that DRI/SIIB lacked the authority to issue such notices. Citing a Delhi High Court case, the appellant argued that DRI/SIIB officers were not competent to issue show cause notices. The Department, however, supported the notice issued by SIIB and urged the tribunal to decide the matter on merit.

2. Legal Background: The Tribunal noted that similar jurisdictional issues had arisen in previous cases. Referring to a recent case, the Tribunal highlighted that the appellant argued that DRI officers were not proper officers under the Customs Act, based on a Supreme Court decision. It was observed that subsequent amendments and notifications designated certain officers, including Additional Director General, DRI, as proper officers for issuing demand notices under Section 28 of the Customs Act.

3. Legislative Amendments: The Tribunal pointed out that amendments were made to address the jurisdictional concerns raised by the Supreme Court's decision. Notification No. 44/2011-Cus (NT) appointed the Additional Director General, DRI, as a proper officer from July 6, 2011, onwards. Subsequently, a new sub-section was added to Section 28 of the Customs Act, retroactively assigning proper officer functions to various DRI officers.

4. Judicial Precedents: The Tribunal discussed conflicting decisions from different High Courts on the issue of DRI officers' jurisdiction to issue show cause notices. While the Delhi High Court ruled in favor of the assessee, the Bombay High Court and the High Court of Telangana and Andhra Pradesh held contrary views. The matter eventually reached the Supreme Court, which stayed the Delhi High Court's judgment pending further review.

5. Decision and Remand: Considering the legal complexities and conflicting precedents, the Tribunal decided to follow the Delhi High Court's ruling in a similar case involving DRI notices. The Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority. The authority was directed to first determine the jurisdiction issue in light of the pending Supreme Court decision and then proceed to decide the case on its merits, ensuring the appellant's right to be heard.

6. Final Decision: In line with previous judgments and legal developments, the Tribunal concluded by setting aside the impugned order and remanding the case for a fresh decision by the original authority, maintaining the status quo until a final resolution is reached.

This detailed analysis of the judgment highlights the key legal issues surrounding the jurisdiction of DRI/SIIB to issue show cause notices under the Customs Act, the legislative amendments addressing these concerns, conflicting judicial precedents, and the Tribunal's decision to remand the case for further consideration in light of pending Supreme Court rulings.