2017 (8) TMI 816 - AT - Customs

Tribunal upholds Directorate of Revenue Intelligence's authority under Customs Act, remands case for fair adjudication

The Tribunal remanded the case concerning the jurisdiction of the Directorate of Revenue Intelligence (DRI) to issue show-cause notices under the Customs ... Jurisdiction - power of DRI to issue SCN - Held that: - the Hon’ble High Court of Delhi in the case of BSNL Vs. UOI [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 Mangli Impex Vs. UOI [2016 (8) TMI 1181 - SUPREME COURT], which is stayed by the Hon’ble Supreme Court, where the 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. - we set aside the impugned order and remand the matter 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 - appeal allowed by way of remand. Issues involved:Jurisdiction of DRI to issue show-cause notice under the Customs Act.Detailed Analysis:Issue 1: Jurisdiction of DRI to issue show-cause notice under the Customs Act- The appeals involved a common issue regarding the jurisdiction of the Directorate of Revenue Intelligence (DRI) to issue show-cause notices under the Customs Act.- The importer's counsel raised a preliminary plea citing a High Court judgment that questioned the competence of DRI in issuing show-cause notices.- The Department's representative defended the orders passed by the Commissioner of Customs and requested a decision on merit.- The Tribunal considered the arguments from both sides and reviewed the available material on record.- The primary issue was whether DRI officers were proper officers to issue show-cause notices under the Customs Act, as per a Supreme Court decision in a previous case.- Amendments were made to the Customs Act in 2011 to address the jurisdictional concerns raised by the Supreme Court's decision.- A notification was issued assigning the functions of proper officer to various officers, including Additional Director General of DRI, from a specified date.- Subsequent amendments further clarified the assignment of proper officer functions to DRI officers with retrospective effect.- Conflicting decisions from different High Courts on this issue led the matter to the Supreme Court, which stayed the operation of the Delhi High Court's judgment.- The Tribunal considered a recent judgment by the Delhi High Court in a similar case involving DRI-issued notices and decided to remand the matter to the original adjudicating authority.- The Tribunal directed the authority to first decide on the jurisdiction issue after the Supreme Court's decision and then proceed to decide on the merits of the case, ensuring the assessee's right to be heard.- The status quo was to be maintained until a final decision was reached, and all appeals were allowed by way of remand.This detailed analysis provides a comprehensive overview of the judgment, focusing on the jurisdictional issue regarding the DRI's authority to issue show-cause notices under the Customs Act. The Tribunal's decision to remand the matter for further consideration in light of relevant legal developments and court decisions demonstrates a thorough review of the case and a commitment to upholding procedural fairness and legal principles.