$~86 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 8^th April, 2025 + W.P.(C) 14392/2021 M/S MAHALAXMI JEWEL EXPORTS & ORS. .....Petitioners Through: Dr. G K Sarkar, Ms. Malabika Sarkar and Mr. Prashant Srivastava, Advocates.

versus UNION OF INDIA & ORS. .....Respondents Through: Mr. Harpreet Singh, Senior Standing Counsel with Ms. Suhani Mathur, Mr.

Jai Ahuja, Advocate.

CORAM:

JUSTICE PRATHIBA M. SINGH JUSTICE RAJNEESH KUMAR GUPTA Prathiba M. Singh, J. (Oral)

1. This hearing has been done through hybrid mode.

2. The present petition has been filed by the Petitioner- M/s Mahalaxmi JewelExports underArticle226 of theConstitutionof Indiaseeking quashingof the proceedings initiated by Respondent No. 2– Additional Director General, Directorate of Revenue Intelligence upon issuance of the Show Cause Notice DRI F. No.DRI/HQ-GI/338/VI/ENQ-12/INT-NIL/2016 dated 9^th June,2017, as alsotheconsequentOrder-in-OriginalNo.48/Commr./Noida-Cus/2018-19dated 29^th March, 2019 passed by Respondent No. 3– Principal Commissioner of Customs.

3. The brief background is that the Petitioner No.1 had established SEZ unit in SEZ Noida. Various obligations had been imposed on the Petitioner No.1, which according to the DRI, were not complied with.

Signature Not Verified Signed By:NAMITA W.P.(C)14392/2021 Page1of4

4. A search was conducted at the premises of Petitioner No.1 on the ground of alleged mis-declaration in export consignments and diversion of duty free gold. TheShow CauseNoticedated9^th June,2017was issued raising ademand to the tune of Rs.1,29,71,040/-. The same culminated in the Order-in-Original dated 29^th March, 2019 by which various penalties were imposed on the Petitioners.

5. The gold to the tune of 41.15 kg was also directed to be confiscated, though redemption was permitted upon payment of Rs.2,77,75,000/- in case of Petitioner No.1. Insofar as the second firm namely M/s Mine O Gold is concerned, the penalties of Rs.4 crores were imposed on the firm and its proprietor including confiscation of 1 kg gold with an option of redemption.

Further directions were also issued.

6. This order was challenged before CESTAT, Allahabad on various grounds. Vide order dated 17^th November, 2021, a pre deposit amount was directed to be paid by the CESTAT, Allahabad.

7. Inthemeantime,thedecisionin CanonIndiaPvt.Ltd.v.Commissioner of Customs, 2021 (18) SCC 563 (hereinafter 'Canon-I’) was issued, holding that the DRI officials do not have jurisdiction to conduct search and seizure as they are not proper officers. The Petitioner, who was directed to make pre- deposit relied upon Canon-I and withdrew the appeal before the CESTAT, Allahabad with liberty to approach this Court by way of a writ petition.

8. Recently, Canon-I has been reviewed by the Supreme Court in Review Petition(Civil)No.400/2021titled'CommissionerofCustomsv.M/sCanon India Private Limited’, (‘Canon-II’), the following findings have been rendered by the Supreme Court:

“168.In view of the aforesaid discussion, we conclude that:

[...]

Signature Not Verified Signed By:NAMITA W.P.(C)14392/2021 Page2of4 (vi) Subject to the observations made in this judgment, the officers of Directorate of Revenue Intelligence, Commissionerates of Customs (Preventive), Directorate General of Central Excise Intelligence and Commissionerates of Central Excise and other similarly situated officers are proper officers for the purposes of Section 28 and are competent to issue show cause notice thereunder. Therefore, any challenge made to the maintainability of such show cause noticesissuedbythisparticularclassofofficers,ontheground of want of jurisdiction for not being the proper officer, which remainpendingbefore variousforums,shallnowbedealtwith 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 writ petitions in accordance with the observationsmadeinthi