Court quashes DRI's Corrigendum/Addendum on duty demand classification, allows revival of settlement applications

The court quashed the Corrigendum/Addendum issued by the Directorate of Revenue Intelligence (DRI) after the Customs and Central Excise Settlement Commission (CCESC) decided to proceed with the petitioners' settlement applications. The court held that the DRI lacked jurisdiction to change the duty demand classification at that stage. The petitioners were allowed to revive their application before the CCESC, and the writ petition was granted without costs.

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Issues:
Challenge to Corrigendum/Addendum dated 12th August, 2014 issued by DRI to SCN dated 20th December, 2013.

Analysis:

1. Facts and Background: The petitioners challenged a Corrigendum/Addendum issued by the Directorate of Revenue Intelligence (DRI) to a Show Cause Notice (SCN) dated 20th December, 2013. The petitioners were accused of importing old photocopier machines by undervaluing them, resulting in customs duty evasion.

2. Settlement Commission Proceedings: The petitioners filed applications for settlement before the Customs and Central Excise Settlement Commission (CCESC) in April 2014, which were allowed to proceed. However, during the settlement process, the DRI issued the impugned Corrigendum/Addendum in August 2014, changing the duty demand classification.

3. Jurisdiction of Settlement Commission: The main contention was whether the CCESC, after deciding to proceed with the applications, had exclusive jurisdiction as per Section 127F(2) of the Customs Act, 1962, to deal with the case.

4. Validity of Corrigendum/Addendum: The court held that the DRI had no jurisdiction to issue the Corrigendum after the CCESC decided to proceed with the applications. The Corrigendum changing the duty demand was deemed unsustainable and contrary to the Act.

5. Misconceived Submission: The argument that the petitioners should have challenged the Corrigendum before the CCESC was dismissed, as the CCESC had exclusive jurisdiction at that stage, and the DRI should not have issued the Corrigendum.

6. Granting Liberty to DRI: The court noted a submission by the respondent's counsel seeking liberty for the DRI to challenge the CCESC's order from 2014. The court refrained from commenting on this, leaving it to the appropriate forum if the DRI decides to challenge the order.

7. Court's Decision: The court quashed the Corrigendum/Addendum dated 12th August, 2014, and allowed the petitioners to revive their application before the CCESC as per the CCESC's order from January 2015. The writ petition was allowed with no order as to costs.

This detailed analysis covers the issues involved in the legal judgment, outlining the background, proceedings before the Settlement Commission, jurisdictional questions, validity of the Corrigendum, and the court's final decision.

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