Back
2025 Supreme(Bom) 1194
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
M.S. Sonak, Jitendra Jain, JJ.
Kale Logistics Solutions Pvt. Ltd. - Petitioner
Versus
Union of India & Ors - Respondents
Writ Petition No. 10018 of 2024
Decided On : 22-07-2025
Advocate Appeared:
For the Petitioner: Mr. Amey Nargolkar a/w. Akshta Jadhav
For the Respondent: Ms. Sangeeta Yadav a/w. Ms. N. Trivedi and Mr. Subir Kumar
DRI officers are recognized as 'proper officers' for issuing show cause notices under Section 28 of the Customs Act, as affirmed by recent Supreme Court rulings, validating prior notifications and addressing jurisdictional concerns.
Headnote:(A) Customs Act, 1962 - Sections 2(34), 5, and 28 - Supreme Court review of Canon India Private Limited decision regarding DRI officers as proper officers for issuing show cause notices - The Supreme Court clarified that DRI officers are authorized under prior notifications and amendments to issue these notices. The court's determination addressed jurisdictional foundations impacting several pending cases. (Paras 3-4)
(B) Jurisdiction - The court established that prior conclusions in Canon India regarding improper notice issued by DRI officers were misleading as they did not consider relevant circulars; thus validating future actions by appropriate officers. (Paras 4(iv), 4(v))
(C) Limitation - The court exempted the aspect of limitation from this review, indicating a distinct legal interpretation was required for matters already ruled on in Canon India. (Paras 4(iii))
(D) Review order for future adjudications - Clear procedures for dealing with existing challenges against DRI issued notices were outlined, giving eight weeks for further appeals. (Paras 6-8) (E) The Petition was disposed of in keeping with the Supreme Court's guidance, with all legal merits addressed remaining open for future consideration. (Paras 9)
| Table of Content |
|---|
| 1. challenge to jurisdiction of officers addressed. (Para 1 , 2 , 3) |
| 2. corrected understanding of statutory provisions. (Para 4) |
| 3. structured directives on filing appeals. (Para 5 , 6 , 7 , 8 , 9) |
JUDGMENT :
M. S. Sonak, J.
1. Heard learned Counsel for the parties.
2. This Petitioners challenge the impugned Order-In- Original dated 5 December 2023. This Petition was kept pending because of the pendency of Review Petition No. 400 of 2021 before the Hon’ble Supreme Court in the case of Canon India Private Limited (Civil Appeal No. 1827 of 2018) wherein the Hon’ble Supreme Court had held that DRI officers cannot be considered as “proper officer” for issuing the show cause notice.
3. The Supreme Court vide its order dated 7 November 2024 has disposed of the review petition by observing that decision passed in the Canon India Private Limited (Supra) did not consider the notification and provisions of law since same was not brought to their notice. The Supreme Court in review petition held that DRI officer is a “proper officer” for issuing show cause notice. The Supreme Court also upheld the Validation Act by which amendment, the DRI officers were empowered to issue show cause notice. Now that the review petition filed by the revenue has been allowed, the petition is taken up for disposal.
4. The reasons recorded in paragraph 168 of the Hon’ble Supreme Court’s order dated 7 November 2024, is reproduced below for the convenience of reference:-
“168. In view of the aforesaid discussion, we conclude that:
(i) DRI officers came to be appointed as the officers of customs vide Notification No. 19/90-Cus (N.T.) dated 26.04.1990 issued by the Department of Revenue, Ministry of Finance, Government of India. This notification later came to be superseded by Notification No. 17/2002 dated 07.03.2002 issued by the Department of Revenue, Ministry of Finance, Government of India, to account for administrative changes.
(ii) The petition seeking review of the decision in Canon India (supra) is allowed for the following reasons:
a. Circular No. 4/99-Cus dated 15.02.1999 issued by the Central Board of Excise & Customs, New Delhi which empowered the officers of DRI to issue show cause notices under Section 28 of the Act, 1962 as well as Notification No. 44/2011 dated 06.07.2011 which assigned the functions of the proper officer for the purposes of Sections 17 and 28 of the Act, 1962 respectively to the officers of DRI were not brought to the notice of this Court during the proceedings in Canon India (supra). In other words, the judgment in Canon India (supra) was rendered without looking into the circular and the notification referred to above thereby seriously affecting the correctness of the same.
b. The decision in Canon India (supra) failed to consider the statutory scheme of Sections 2(34) and 5 of the Act, 1962 respectively. As a result, the decision erroneously recorded the finding that since 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 to its amendment by the Finance Act, 2011. However, the assessment orders, in respect of which the show cause notices under challenge in Canon India (supra) were issued, were passed under Section 17 of the Act, 1962 as amended by the Finance Act, 2011.
(iii) This Court in Canon India (supra) based its judgment on two grounds: (1) the
