2017 (8) TMI 502 - AT - Customs

Jurisdiction - power of DRI to issue SCN - Held that - the Hon ble High Court of Delhi in the case of BSNL Vs. UOI 2017 (6) TMI 688 - DELHI HIGH COURT has dealt with the identical issue where the notice was also issued by DRI. The Hon ble High Court of Delhi has considered the judgment in the case of Mangli Impex Vs. UOI 2016 (8) TMI 1181 - SUPREME COURT , which is stayed by the Hon ble Supreme Court, where the petitioner is permitted to review the challenge depending on the outcome of the appeals filed by the UOI in the Supreme Court against the judgment of the Court in the case of Mangli Impex Ltd. - we set aside the impugned order and remand the matter 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 - appeal allowed by way of remand.

Summary

Issues: Jurisdiction of DRI to issue show-cause notice under the Customs Act.

In the present appeal, the primary issue revolves around the jurisdiction of the Directorate of Revenue Intelligence (DRI) to issue a show-cause notice under the Customs Act. The appellant raised a preliminary plea citing a High Court judgment stating that DRI is not competent to issue such notices. The respondent, on the other hand, defended the order passed by the Commissioner of Customs and urged the tribunal to decide the matter on merit. The tribunal, after hearing both parties and examining the record, noted that the crux of the matter is the jurisdiction of DRI to issue the show-cause notice. The appellant contended that DRI officers were not proper officers as per the Customs Act, citing a Supreme Court decision. Subsequent amendments to the Customs Act and a notification by the Central Board of Excise and Customs (CBEC) were discussed, appointing DRI officers as proper officers for specific purposes. Another amendment was highlighted, assigning proper officer functions to DRI officers retrospectively. The tribunal acknowledged conflicting High Court decisions on this issue, leading to the matter being sub judice before the Supreme Court. A recent High Court judgment was also referenced, granting liberty to review the challenge based on the Supreme Court's decision in another case. Ultimately, the tribunal set aside the impugned order and remanded the matter to the original adjudicating authority to decide the jurisdiction issue post the Supreme Court's decision, followed by a review on the merits with the appellant's opportunity to be heard, maintaining the status quo until the final decision. The appeal was allowed by way of remand.