Supreme Court ruling on DRI officers jurisdiction under Customs Act sparks amendments and legal debate

The Supreme Court clarified that DRI officers were not proper officers under the Customs Act, leading to amendments. Different High Courts had conflicting views on DRI officers' jurisdiction, with the Delhi High Court holding that the amendment did not apply retroactively. However, the Supreme Court stayed this decision. The Mumbai High Court and the High Court of Telangana and Andhra Pradesh had differing opinions. The Tribunal decided to set aside orders and remand cases to the original authority for reevaluation in light of the Supreme Court's decisions, ultimately allowing the appeal by way of remand.

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Issues: Jurisdiction of DRI officers to issue show-cause notice under the Customs Act.

In the present case, the issue of jurisdiction of DRI officers to issue show-cause notice under the Customs Act was examined. The Apex Court's decision in CC Vs. Sayed Ali highlighted that DRI officers were not considered proper officers under Section 2(34) of the Customs Act, 1962. Following this, amendments were made to Section 28 of the Customs Act, 1962, effective from 08/04/2011, to address the jurisdictional concerns. Notification No.44/2011-Cus (NT) dated 06/07/2011 appointed the Additional Director General, DRI as a 'proper officer' for the purpose of Section 28 of the Act. Subsequently, sub-section 11 was inserted under Section 28 of the Customs (Amendment and Validation) Act, 2011, assigning proper officer functions to various DRI officers with retrospective effect.

The issue of DRI officers' jurisdiction was also addressed by different High Courts. The Hon'ble Delhi High Court in the case of Mangali Impex Vs. UOI held that the newly inserted Section 28(11) did not empower DRI officers to adjudicate show-cause notices issued before 08/04/2011. However, this decision was stayed by the Hon'ble Supreme Court. Conversely, the Hon'ble Mumbai High Court and the Hon'ble High Court of Telangana and Andhra Pradesh took a different view on the matter. With conflicting decisions from various High Courts, the issue was brought before the Hon'ble Supreme Court. In a previous case, the Supreme Court had remanded a similar matter to the Tribunal for reevaluation in light of the Sayed Ali decision. Given the conflicting views, the Tribunal decided to set aside the impugned orders and remand the matters to the original adjudicating authority to first determine the jurisdiction issue after considering the Supreme Court's decision in the Mangali Impex case and then assess the case on its merits. Ultimately, the appeal was allowed by way of remand.

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