DRI Officers Valid for Show Cause Notices: Tribunal Upholds Customs Act Retroactive Provision

The Tribunal held that DRI officers are proper officers authorized to issue show cause notices under Section 28 of the Customs Act, 1962, due to the retrospective validation provided by Section 28(11). The Tribunal rejected the argument against the retrospective application of Section 28(11) and declined to wait for the Delhi High Court's decision on the constitutional validity of the provision. It concluded that the show cause notices issued by DRI officers are valid, and proceedings need not be stayed. The appeals were directed to be listed for hearing as usual, and the Misc. application was disposed of accordingly.

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Issues Involved:
1. Jurisdiction of DRI officers to issue show cause notices under Section 28 of the Customs Act, 1962.
2. Retrospective application of Section 28(11) of the Customs Act, 1962.
3. Constitutional validity of Section 28(11) of the Customs Act, 1962.
4. Whether proceedings should await the decision of the Delhi High Court on the constitutional validity of Section 28(11).

Issue-Wise Detailed Analysis:

Jurisdiction of DRI Officers to Issue Show Cause Notices:
The primary contention was whether officers of the Directorate of Revenue Intelligence (DRI) are "proper officers" authorized to issue show cause notices under Section 28 of the Customs Act, 1962. The appellants argued that DRI officers were not competent to issue such notices, citing that the assessment was done by other officers who became "the" proper officers. The Tribunal noted that Section 28(11) of the Customs Act, 1962, introduced on 16.9.2011, retrospectively validated the authority of DRI officers to issue such notices. The Tribunal concluded that DRI officers appointed before 6.7.2011 are deemed to have always had the power of assessment and are proper officers for the purposes of Section 28.

Retrospective Application of Section 28(11):
The appellants argued that the retrospective application of Section 28(11) did not cover show cause notices issued before 8.4.2011, as per Explanation 2 to Section 28(11). However, the Tribunal interpreted that the purpose of Section 28(11) was to validate show cause notices issued by DRI and Preventive Commissionerates, and this retrospective validation was intended to prevent revenue loss and disruption. The Tribunal cited the Statement of Objects and Reasons of the Customs (Amendment and Validation) Bill, 2011, to support this interpretation. The Tribunal also referred to the judgments of the Bombay High Court and Gujarat High Court, which upheld the retrospective application of Section 28(11).

Constitutional Validity of Section 28(11):
The appellants challenged the constitutional validity of Section 28(11) but conceded that the Tribunal is not competent to decide on constitutional matters. The Tribunal agreed, stating that it cannot determine the constitutional validity of any provisions of the Customs Act, 1962, as it is a creature of the statute. The Tribunal noted that the challenge to the constitutional validity of Section 28(11) is pending before the Delhi High Court, but no stay has been granted by the High Court on proceedings related to show cause notices issued by DRI.

Whether Proceedings Should Await the Decision of the Delhi High Court:
The appellants argued that the proceedings should be stalled until the Delhi High Court decides on the constitutional validity of Section 28(11). The Tribunal rejected this proposition, stating that there is no stay from the Delhi High Court on the proceedings related to DRI show cause notices. The Tribunal emphasized that it is untenable to stall proceedings nationwide merely because the constitutional validity of a provision is under challenge in one High Court. The Tribunal cited the judgments of the Bombay High Court and Gujarat High Court, which have upheld the competence of DRI officers to issue show cause notices under Section 28, even for the period prior to 8.4.2011.

Conclusion:
The Tribunal concluded that show cause notices issued by DRI officers do not suffer from any jurisdictional infirmities in light of Section 28(11) of the Customs Act, 1962. The proceedings relating to these show cause notices need not await the decision of the Delhi High Court on the constitutional validity of Section 28(11). The respective appeals are to be listed for hearing in the usual course. The Misc. application was disposed of accordingly.

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