2017 (10) TMI 1525 - AT - Customs

Appellate Tribunal Overturns Customs Act Notice, Remands Case for Review

M/s. Box Corrugators and Offset Printers Versus Commissioner of Customs, Chennai

The Appellate Tribunal set aside the show-cause notice issued by the Directorate of Revenue Intelligence (DRI) under the Customs Act. The matter was ... Jurisdiction - power of DRI/DGCEI officers to issue SCN - section 2(34) of the Customs Act, 1962 - HELD THAT:- The Hon’ble High Court of Delhi in the case of BHARAT SANCHAR NIGAM LIMITED VERSUS UNION OF INDIA & ORS [2017 (6) TMI 688 - DELHI HIGH COURT] has dealt with the identical issue where the notice was also issued by DRI. The Hon’ble High Court of Delhi has considered the judgment in the case of M/S MANGALI IMPEX LTD., M/S PACE INTERNATIONAL AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2016 (5) TMI 225 - DELHI HIGH COURT] which is stayed by the Hon’ble Supreme Court reported in UNION OF INDIA VERSUS MANGALI IMPEX LTD. [2016 (8) TMI 1181 - SC ORDER]. Finally the Hon’ble High Court has granted liberty to the petitioner by observing that petitioner is permitted to review the challenge depending on the outcome of the appeals filed by the UOI in the Supreme Court against the judgment of the Court in the case of Mangli Impex Ltd. Matter remanded to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Hon’ble Supreme Court decision in the case of Mangli Impex and then on merits of the case but by providing an opportunity to the assessee of being heard - appeal allowed by way of remand. Issues: Jurisdiction of DRI to issue show-cause notice under Customs ActThe judgment revolves around the jurisdiction of the Directorate of Revenue Intelligence (DRI) to issue show-cause notices under the Customs Act. The case originated from a show-cause notice issued by the DRI, which was challenged by the assessee-Respondent citing the Commissioner of Customs vs. Sayed Ali case. The Hon'ble Supreme Court's decision in the Sayed Ali case led to an amendment in the Customs Act, empowering the Additional Director General, DRI as the proper officer from July 6, 2011, to issue demand notices under Section 28. Subsequently, a retrospective amendment was made to assign proper officer functions to various DRI officers. The issue of jurisdiction was further litigated in various High Courts, resulting in conflicting decisions. The matter was eventually brought before the Hon'ble Supreme Court, which granted a stay on the Delhi High Court's judgment. Another case in the Hon'ble High Court of Delhi involving a notice issued by DRI was also considered, leading to the grant of liberty to review the challenge based on the outcome of appeals filed in the Supreme Court.The Appellate Tribunal, considering the judgments and circumstances, set aside the impugned order and remanded the matter to the original adjudicating authority. The authority was directed to first decide on the jurisdiction issue post the Supreme Court decision in the Mangli Impex case, followed by a review of the case on merits with an opportunity for the assessee to be heard. The status quo was to be maintained until a final decision was reached. The impugned order was ultimately set aside, and the appeals were allowed for remand to the adjudicating authority after the Supreme Court's judgment in the Mangli Impex case.