2017 (9) TMI 276 - AT - Central Excise

Jurisdiction - power of DRI to issue SCN - Held that - the notice issued by the DGCEI who was not a competent authority as per the ratio laid down in the case of Mangali Impex Ltd. Vs. UOI 2016 (5) TMI 225 - DELHI HIGH COURT - In this connection, we note that similar issues have been dealt with in various cases by the Tribunal recently. It is held that the matters have to be remanded back to the original authority for a decision - appeal allowed by way of remand.

Summary

Issues:
Appeal against order confirming differential duty demand and penalty imposition - Competency of Directorate of Revenue Intelligence (DRI) officers to issue show cause notice under Customs Act - Jurisdiction of DRI officers in issuing show cause notices - Amendment to section 28 of Customs Act, 1962 - Conflict in High Court decisions - Stay granted by Supreme Court on conflicting judgments - Decision based on High Court ruling in a similar case.

Analysis:
The appeals were filed against an order confirming a demand for differential duty and imposing penalties on the appellants. The issue revolved around the competency of the Directorate of Revenue Intelligence (DRI) officers to issue show cause notices under the Customs Act. The appellants argued that the notice issued by the DRI was beyond its jurisdiction, citing a previous case. The Tribunal noted that similar issues had been addressed in various recent cases and decided to remand the matters to the original authority for a decision after the legal issue was settled by the Supreme Court.

The Tribunal delved into the jurisdiction of DRI officers under the Customs Act, highlighting that the DRI officers were not considered proper officers as per a Supreme Court decision. Amendments to section 28 of the Customs Act were discussed, pointing out that the Additional Director General of DRI was prospectively appointed as a 'proper officer' from a certain date. Subsequent amendments and notifications were also analyzed to understand the authority vested in DRI officers to issue demand notices.

The Tribunal considered conflicting High Court decisions on the jurisdiction of DRI officers to issue show cause notices. It was noted that while the Delhi High Court ruled in favor of the assessee, other High Courts had differing opinions. The matter eventually reached the Supreme Court, which granted a stay on the Delhi High Court judgment, making the issue sub-judice. Referring to a specific case, the Tribunal followed the Delhi High Court's ruling and remanded the matter to the original adjudicating authority for a decision on jurisdiction after the Supreme Court's decision, ensuring the appellant's right to be heard.

In conclusion, the Tribunal set aside the impugned order and remanded the matters to the adjudicating authority based on the direction provided. The decision was influenced by the High Court ruling in a similar case and aimed to maintain the status quo until a final decision was reached. All appeals were allowed by way of remand, following the Tribunal's previous decision and considering the totality of facts and circumstances surrounding the jurisdictional issue involving DRI officers under the Customs Act.