Customs Act Jurisdiction: Delhi HC Limits D.R.I. Powers, Tribunal Ensures Assessee Rights

The Hon'ble Delhi High Court in the case of Mangali Impex Ltd. Vs. Union of India ruled that D.R.I. Officers are not authorized to issue show cause notices under the Customs Act, 1962 for imports made before April 2011. The Tribunal referred to the case of M/s. HR Electronics Vs. Commissioner Of Customs, New Delhi, highlighting jurisdictional issues. Amendments to section 28 post the Supreme Court's decision in Commissioner of Customs Vs. Sayed Ali were discussed, leading to conflicting decisions and a stay by the Supreme Court. The Tribunal set aside impugned orders, pending the Supreme Court's decision, ensuring the right to be heard for the assessee.

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Issues:
Jurisdiction of D.R.I. Officers to issue show cause notice under the Customs Act, 1962 for imports made prior to April 2011.

Analysis:
The judgment addresses the issue of jurisdiction of D.R.I. Officers to act as the 'proper officer' for demand proceedings under the Customs Act, 1962 for imports made before April 2011. The Hon'ble Delhi High Court ruled in the case of Mangali Impex Ltd. Vs. Union of India that D.R.I. Officers are not competent to issue show cause notices for the period prior to 08.04.2011. Various benches of the Tribunal, including Delhi, Chennai, and Calcutta, have set aside impugned orders and remanded the matters to the original authority pending the judgment by the Hon'ble Supreme Court in the case of Mangali Impex. The Tribunal referred to the case of M/s. HR Electronics Vs. Commissioner Of Customs, New Delhi, highlighting the preliminary issue of jurisdiction regarding the D.R.I. Officers' authority to issue show cause notices under the Customs Act.

The judgment further discusses the amendments made to the provisions of section 28 of the Customs Act, 1962, post the Hon'ble Supreme Court's decision in the case of Commissioner of Customs Vs. Sayed Ali. The Finance Act, 2011 amended section 28, and Notification No.44/2011-Cus (NT) was issued to appoint Additional Director General, DRI as the 'proper officer' from July 6, 2011, onwards. Subsequently, sub-section 11 was inserted under section 28 with retrospective effect, assigning proper officer functions to various DRI officers. However, conflicting decisions arose from different High Courts, leading the matter to the Hon'ble Supreme Court, which stayed the Delhi High Court's judgment pending further proceedings.

The judgment also references the case of BSNL Vs. UOI, where the High Court of Delhi granted liberty to the petitioner to challenge the notice issued by DRI based on the outcome of appeals filed by the UOI in the Supreme Court against the judgment in the case of Mangali Impex Ltd. Considering the totality of facts and circumstances, the Tribunal set aside the impugned orders and remanded the matters to the original adjudicating authority to decide the jurisdiction issue post the Supreme Court's decision in the Mangali Impex case, ensuring the assessee's right to be heard. The status quo was to be maintained until a final decision was reached.

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