2025 (3) TMI 1108

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.... Mr. Aditya Singla, SSC CBIC, Ms. Arya Suresh Nair & Ms. Medha Navami, Advs. (M: 7558898905) PRATHIBA M. SINGH, J. (ORAL) 1. This hearing has been done through hybrid mode. 2. This writ petition is part of a batch of petitions that were filed under Article 226 of the Constitution of India, praying for a direction to quash refund proceedings initiated by the Directorate of Revenue Intelligence ('DRI') officials against the Petitioner/s on the ground that DRI officials lack jurisdiction under Section 28 of the Customs Act, 1962. Reliance was primarily placed on the Supreme Court decision in Canon India Pvt. Ltd. v. Commissioner of Customs, 2021 (3) TMI 384 (hereinafter 'Canon-I'), which had held that DRI Officials were not 'proper of....

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....not "the" proper officer to exercise the power under Section 28(4) and the initiation of the recovery proceedings in the present case is without any jurisdiction and liable to be set aside." 3. However, vide order dated 25th September, 2025, the predecessor bench of this Court had adjourned this batch of matters sine die upon being informed that the Respondent/Department had preferred a review petition against the decision in Canon-I vide Review Petition (Civil) No. 400/2021 titled 'Commissioner of Customs v. M/s Canon India Private Limited'. 4. Today, the Court is informed that said review petition has been finally decided by the Supreme Court vide its judgment dated 7th November, 2024 and the operative portion reads as under: ....

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....ince DRI officers were not entrusted with the functions of a proper officer for the purposes of Section 28 in accordance with Section 6, they did not possess the jurisdiction to issue show cause notices for the recovery of duty under Section 28 of the Act, 1962. c. The reliance placed in Canon India (supra) on the decision in Sayed Ali (supra) is misplaced for two reasons - first, Sayed Ali (supra) dealt with the case of officers of customs (Preventive), who, on the date of the decision in Sayed Ali (supra) were not empowered to issue show cause notices under Section 28 of the Act, 1962 unlike the officers of DRI; and secondly, the decision in Sayed Ali (supra) took into consideration Section 17 of the Act, 1962 as it stood prior t....

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....riod prior to 08.04.2011 by harmoniously construing it with Explanation 2 to Section 28 of the Act, 1962. We are of the considered view that the decision in Mangali Impex (supra) failed to take into account the policy being followed by the Customs department since 1999 which provides for the exclusion of jurisdiction of all other proper officers once a show cause notice by a particular proper officer is issued. It could be said that this policy provides a sufficient safeguard against the apprehension of the issuance of multiple show cause notices to the same assessee under Section 28 of the Act, 1962. Further, the High Court could not have applied the doctrine of harmonious construction to harmonise Section 28 (11) with Explanation 2 becaus....

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....rums, shall now be dealt with in the following manner: a. Where the show cause notices issued under Section 28 of the Act, 1962 have been challenged before the High Courts directly by way of a writ petition, the respective High Court shall dispose of such 1962 cannot be said to be unconstitutional. It cannot be said that Section 97 fails to cure the defect pointed out in Canon India (supra) writ petitions in accordance with the observations made in this judgment and restore such notices for adjudication by the proper officer under Section 28. b. Where the writ petitions have been disposed of by the respective High Court and appeals have been preferred against such orders which are pending before this Court, they shall be d....

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....ow cause notices under Section 28 are pending before the CESTAT, they shall now be decided in accordance with the observations made in this decision." 5. A common issue raised in all these writ petitions, including the present one, pertains to the jurisdiction of the DRI officials to issue show cause notices or pass adjudication orders. However there are various other issues that have been raised in some matters, which are not common across all petitions. Accordingly, in each of these matters, the Court will have to determine whether they are liable to be disposed of in light of the Supreme Court's decision in Canon - II (Supra) or if any outstanding issues remain to be adjudicated. 6. Accordingly, the Court proceeds to consider e....