2025 (4) TMI 707 - HC - Customs

Jurisdiction - proper officer to issue SCN - HELD THAT - Reliance was placed on the Supreme Court decision in Canon India Pvt. Ltd. v. Commissioner of Customs 2021 (3) TMI 384 - SUPREME COURT which had held that DRI Officials were not proper officers for the purpose of Customs Act 1962. Thus DRI officials have now been recognised as proper officers for initiating/conducting proceedings under the Customs Act 1962. Hence the present petitions have become infructuous. Petition disposed off.

Summary

The core legal question considered in this judgment is whether the Directorate of Revenue Intelligence (DRI) officials have the jurisdiction to act as 'proper officers' under the Customs Act, 1962, for the issuance of show cause notices and conducting proceedings. This issue arises from the challenge to a Seizure Memo issued by the DRI, with the petitioner questioning the jurisdiction of DRI officials based on the Supreme Court's decision in Canon India Pvt. Ltd. v. Commissioner of Customs (Canon-I).

The legal framework revolves around the interpretation of the term 'proper officer' under the Customs Act, 1962. Initially, the Supreme Court in Canon-I held that DRI officials were not 'proper officers' for the purpose of issuing show cause notices under the Act. However, this position was reviewed in Canon-II, where the Supreme Court concluded that DRI officials, along with officers from other specified departments, are indeed 'proper officers' under Section 28 of the Customs Act, 1962, and are competent to issue show cause notices.

The Court's interpretation in Canon-II effectively overturned the earlier decision in Canon-I, thereby affirming the jurisdiction of DRI officials. The Court reasoned that the legislative intent and statutory framework support the designation of DRI officers as 'proper officers' for the purposes of Section 28. The judgment in Canon-II provided a comprehensive framework for handling pending cases and appeals concerning the jurisdiction of DRI officials.

Key evidence and findings in Canon-II included a detailed examination of the statutory provisions and the roles of various officers under the Customs Act. The Supreme Court emphasized the need for a harmonious interpretation of the Act to ensure effective administration and enforcement of customs laws.

In applying the law to the facts of the present case, the Court determined that the challenge to the Seizure Memo based on the jurisdictional argument had become infructuous due to the Canon-II decision. The Court noted that the petitioner's appeal was pending before the Commissioner (Appeals) and directed that the appeal proceed in accordance with the law.

Competing arguments were addressed by the Supreme Court in Canon-II, where it considered the implications of its earlier decision in Canon-I and the necessity of a coherent legal framework for customs enforcement. The Court's decision in Canon-II effectively resolved the jurisdictional disputes by affirming the authority of DRI officials.

The significant holding in this judgment is the reaffirmation of DRI officials as 'proper officers' under the Customs Act, 1962, as established in Canon-II. The Court's decision reflects a critical shift in the interpretation of the term 'proper officer,' aligning with the broader objectives of customs administration. The judgment underscores the importance of statutory interpretation in resolving jurisdictional challenges and ensuring the effective functioning of revenue intelligence operations.

In conclusion, the petitions were disposed of as infructuous, and all pending applications were also disposed of. The Court directed that a copy of the order be sent to the concerned Commissioner (Appeals) for necessary information, ensuring that the appeal process continues in accordance with the law.