Supreme Court stays Delhi HC ruling, remands DRI jurisdiction issue for fresh review.

The Supreme Court stayed the Delhi High Court's decision that the Directorate of Revenue Intelligence (DRI) lacked jurisdiction to issue show cause notices before 08/04/2011. The matter was remanded to the original adjudicating authority to first determine jurisdiction post the Supreme Court's decision, followed by a merits review and granting the appellant a hearing opportunity. The status quo was to be maintained until a final decision, allowing the appeals by way of remand.

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

Analysis:
The appellants challenged an order dated 31/08/2007, arguing that the show cause notice issued by the Directorate of Revenue Intelligence (DRI) was invalid. The appellant relied on a High Court decision stating that DRI lacked the authority to issue such notices. The Department's counsel defended the DRI's notice issuance. The Tribunal examined the jurisdictional issue arising from the DRI's authority to issue show cause notices under the Customs Act. The appellant contended that DRI officers were not proper officers as per a Supreme Court decision. The Customs Act was subsequently amended to address this issue. A notification assigned the function of proper officer to the Additional Director General, DRI from 06/07/2011. A later amendment retroactively designated various DRI officers as proper officers.

The High Court held that the DRI officers lacked jurisdiction to issue show cause notices before 08/04/2011. This decision conflicted with other High Court rulings. The matter was brought before the Supreme Court, which stayed the Delhi High Court's judgment. Another High Court case addressed a similar issue, with the court granting liberty to review the challenge based on the Supreme Court's decision in the earlier case. Following the Delhi High Court's decision in the latter case, the Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority. The authority was directed to first decide on jurisdiction after the Supreme Court's decision and then proceed on the merits, providing the appellant with a hearing opportunity. The status quo was to be maintained until a final decision. Consequently, the appeals were allowed by way of remand.

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