2025 (4) TMI 708 - HC - Customs

Jurisdiction of officers from the Directorate of Revenue Intelligence (DRI) to issue show cause notices under Section 28 of the Customs Act 1962 - HELD THAT - The Orders-in-Original are all appealable orders in terms of Section 128 of the Customs Act 1962. Accordingly the Petitioners are relegated to avail appellate remedies before the Commissioner (Appeals). If the appeals are filed by 30th June 2025 the same shall not be dismissed on the ground of being barred by limitation and shall be considered on merits - petition disposed off.

Summary

ISSUES PRESENTED and CONSIDERED

The central issue in the petitions was the jurisdiction of officers from the Directorate of Revenue Intelligence (DRI) to issue show cause notices under Section 28 of the Customs Act, 1962. The question was whether these officers were "proper officers" for the purpose of issuing such notices, as challenged in the Orders-in-Original. Additionally, the petitions sought to address the procedural aspect of cross-examining individuals whose statements were relied upon in the Orders-in-Original.

ISSUE-WISE DETAILED ANALYSIS

Jurisdiction of DRI Officers under Section 28

- Relevant Legal Framework and Precedents: The legal framework revolves around Section 28 of the Customs Act, 1962, which pertains to the issuance of show cause notices by "proper officers." The Supreme Court's decision in 'Commissioner of Customs v. M/s Canon India Private Limited' (Canon-II) was pivotal, providing clarity on the jurisdictional authority of DRI officers.

- Court's Interpretation and Reasoning: The Court referred to the Supreme Court's findings in Canon-II, which concluded that DRI officers are indeed "proper officers" for the purposes of issuing show cause notices under Section 28. This interpretation resolved the jurisdictional challenge against the Orders-in-Original.

- Key Evidence and Findings: The Court relied on the Supreme Court's decision in Canon-II, which provided a comprehensive analysis and conclusion regarding the jurisdiction of DRI officers, thereby negating the need for further evidence on this issue in the current petitions.

- Application of Law to Facts: The Court applied the Supreme Court's ruling to the present petitions, determining that the jurisdictional issue raised by the Petitioners was no longer valid, as the DRI officers were confirmed as proper officers.

- Treatment of Competing Arguments: The Petitioners' challenge to the jurisdiction was effectively countered by the Supreme Court's authoritative decision, which the Court adopted, leaving no room for competing jurisdictional arguments.

- Conclusions: The Court concluded that the jurisdictional issue regarding DRI officers was settled by the Supreme Court, and thus, the Orders-in-Original could not be challenged on this ground.

Procedural Aspect of Cross-Examination

- Relevant Legal Framework and Precedents: The procedural rights of parties, including the right to cross-examine individuals whose statements are relied upon in adjudicatory orders, are governed by principles of natural justice and procedural fairness.

- Court's Interpretation and Reasoning: The Court did not make a definitive ruling on the cross-examination issue but directed that this procedural request be considered by the Commissioner (Appeals) in accordance with the law.

- Key Evidence and Findings: The Court acknowledged the Petitioner's request for cross-examination but deferred the decision to the appellate authority, emphasizing the need for procedural fairness in the appeal process.

- Application of Law to Facts: The Court applied procedural fairness principles by ensuring that the Petitioner's request for cross-examination would be addressed during the appellate proceedings.

- Treatment of Competing Arguments: The Court did not delve deeply into competing arguments regarding cross-examination, as it was deemed a matter for the Commissioner (Appeals) to consider.

- Conclusions: The Court concluded that the Petitioner's request for cross-examination should be presented and considered in the appellate proceedings, ensuring adherence to procedural fairness.

SIGNIFICANT HOLDINGS

- The Court held that the jurisdictional issue regarding DRI officers as proper officers under Section 28 of the Customs Act, 1962, was conclusively settled by the Supreme Court in Canon-II. As a result, the Orders-in-Original could not be challenged on this ground.

- The Court emphasized the procedural aspect by directing that the Petitioner's request for cross-examination be considered by the Commissioner (Appeals), thereby upholding principles of natural justice.

- The Court ordered that the Petitioners should avail appellate remedies before the Commissioner (Appeals) and provided a timeline for filing appeals, ensuring they would not be dismissed for being time-barred if filed by June 30, 2025.

- The Court disposed of all petitions and pending applications, effectively directing the Petitioners to pursue their appeals through the appropriate legal channels.