2017 (9) TMI 897 - AT - Customs

Jurisdiction - power of Commissioner (Preventive) to issue SCN - Held that - the notice issued by the Commissioner (Preventive) 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:
Jurisdiction of DRI officers to issue show cause notice under Customs Act.

Analysis:
The Tribunal noted that the issue of jurisdiction regarding the Directorate of Revenue Intelligence (DRI) officers to issue show cause notices under the Customs Act has been a subject of various cases. The appellant contended that DRI officers were not proper officers as per the Customs Act, citing a Supreme Court decision. It was highlighted that post the Supreme Court decision, amendments were made to the Customs Act in 2011, empowering the Additional Director General, DRI as the 'proper officer' for issuing demand notices under Section 28. Additionally, a subsequent amendment in 2011 assigned proper officer functions to DRI officers with retrospective effect. However, conflicting views emerged from different High Courts, leading to the matter being taken up by the Supreme Court.

The Tribunal referenced a case where the High Court of Delhi held in favor of the assessee, stating that neither DRI nor DGCEI officers were empowered to issue show cause notices before a specific date. This decision was contrasted with judgments from other High Courts. The matter eventually reached the Supreme Court, which stayed the Delhi High Court's judgment, indicating that the issue was pending before the apex court. Notably, the High Court of Delhi, in a separate case, granted liberty to review the challenge based on the outcome of appeals filed in the Supreme Court.

Based on the decisions and considerations, the Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority. The directive was to first decide on jurisdiction following the Supreme Court's decision in a specific case, and then proceed to assess the merits of the case while ensuring the appellant's right to be heard. The status quo was to be maintained until a final decision was reached. Consequently, the appeals filed by the assessee were allowed through remand, aligning with the approach adopted in a previous case by the High Court of Delhi.

In line with the Tribunal's decision, the matters were remanded for a fresh decision, emphasizing the importance of resolving the jurisdictional issue in light of the pending Supreme Court decision.