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2025 Supreme(GUJ) 659
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 13997 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 14027 of 2023 ==========================================================
M/S PRINT ZONE & ANR.
Versus UNION OF INDIA & ORS.
==========================================================
Appearance:
MR HARDIK P MODH(5344) for the Petitioner(s) No. 1,2 MR SIDDHARTH H DAVE(5306) for the Respondent(s) No. 3 NOTICE SERVED for the Respondent(s) No. 1 NOTICE SERVED BY DS for the Respondent(s) No. 2 ==========================================================
CORAM: HONOURABLE MR. JUSTICE BHARGAV D. KARIA and HONOURABLE MR.JUSTICE D.N.RAY Date : 12/03/2025
The court affirmed the jurisdiction of DRI officers to issue show cause notices under Section 28 of the Customs Act, validating previous proceedings and allowing time for appeals.
Headnote:(A) Customs Act, 1962 - Section 28 - Review of decision in Canon India Pvt. Ltd. - Jurisdiction of DRI officers to issue show cause notices validated - The court clarified that DRI officers are proper officers under Section 28 and can issue show cause notices, addressing previous jurisdictional concerns. (Paras 2, 3, 4, 5, 6)
(B) Jurisdiction - The court emphasized that the jurisdiction of DRI officers to issue show cause notices is valid and affirmed the statutory framework supporting this authority. (Paras 3, 4)
Facts of the case:
The petitioners challenged an Order-in-Original, and the court noted that the Apex Court's ruling in Canon India Pvt. Ltd. necessitated a review of the jurisdiction of DRI officers under the Customs Act.
Findings of Court:
The court upheld the validity of show cause notices issued by DRI officers under Section 28, granting eight weeks for petitioners to appeal to CESTAT.
Issues: The main issues included the jurisdiction of DRI officers to issue show cause notices and the implications of the Canon India ruling.
Ratio Decidendi: The court reasoned that the DRI officers are designated as proper officers under the Customs Act, thus validating their authority to issue show cause notices.
Result: Petitions disposed of, granting time to appeal.
ORDER :
(BHARGAV D. KARIA, J.)
1. Heard learned advocate Mr. Hardik Modh for the petitioners.
2. Learned advocate Mr. Hardik P.Modh for the petitioners submitted that these petitions would not survive in view of the order passed by the Hon’ble Apex Court in case of Commissioner of Customs Vs. Canon India Pvt. Ltd. reported in 2024 (390) E.L.T. 545 (S.C.). It was further submitted that the petitioners have challenged the Order-in-Original and as per the instructions issued by the Hon’ble Apex Court in paragraph No.168 (vi)(c) eight weeks’ time may be granted to prefer appropriate appeal before the Customs Excise and Service Tax Appellate Tribunal (for short “CESTAT”).
3. Considering the above submissions, these petitions are disposed of in view of the conclusion arrived at in the decision of the Hon’ble Apex Court in case of Canon India Pvt. Ltd. (Supra) holding that the notice and proceedings initiated by the DRI under the provisions of Customs Act are valid proceedings having jurisdiction as under:-
“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 show cause notices issued by the DRI officers were invalid for want of jurisdiction; and (2) the show cause notices were issued after the expiry of the prescribed limitation period. In the present judgment, we have only considered and reviewed the decision in Canon India (supra) to the extent that it pertains to the first ground, that is, the jurisdiction of the DRI officers to issue show cause notices under Section 28. We clarify that the observations ma
