2017 (9) TMI 1082 - AT - Customs

Jurisdiction - power of DRI to issue SCN - proper officer - Held that - the notice issued by the DRI 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 involved:
Jurisdiction of D.R.I. officers to act as 'proper officer' for demand proceedings under the Customs Act, 1962 prior to April 2011.

Detailed Analysis:

1. Jurisdiction of D.R.I. Officers:
The Tribunal highlighted that the issue of jurisdiction of D.R.I. Officers to issue show cause notices under the Customs Act was disputed and ruled upon by various High Courts. The Hon'ble Delhi High Court in the case of Mangali Impex Ltd. Vs. Union of India held that D.R.I. Officers are not competent to issue show cause notices for the period before 08.04.2011. The Tribunal referred to the case of M/s. HR Electronics Vs. Commissioner Of Customs, New Delhi, where it was argued that D.R.I. officers were not proper officers as per the Customs Act, 1962. The Finance Act, 2011 amended section 28 of the Customs Act, empowering Additional Director General, DRI as 'proper officer' from July 6, 2011. Subsequently, a retrospective amendment was made assigning proper officer functions to various DRI officers. Conflicting decisions arose from different High Courts, leading the matter to the Hon'ble Supreme Court, which stayed the Delhi High Court's judgment, making the issue sub judice.

2. Adjudication and Remand:
The Tribunal, following the precedent set by the Hon'ble High Court of Delhi in the case of BSNL, set aside the impugned orders and remanded the matters to the original adjudicating authority. The original authority was directed to first decide on the jurisdiction issue after the Supreme Court's decision in the Mangali Impex case and then proceed to decide on the merits of the case, ensuring the assessee's right to be heard. The status quo was ordered to be maintained until a final decision was reached. The Tribunal emphasized the importance of awaiting the apex court's decision before passing final orders, as per the principle established in Union of India Vs. West Coast Paper Mills Ltd.

3. Conclusion:
The Tribunal allowed the appeals filed by the respondents by way of remand, indicating that the matters would be reconsidered by the original authority based on the outcome of the apex court judgment. The decision aimed to uphold procedural fairness and ensure that all parties had a fair opportunity to present their case in light of the legal developments regarding the jurisdiction of D.R.I. officers in issuing show cause notices under the Customs Act.