DRI officers are deemed proper officers for issuing show cause notices under the Customs Act, 1962.

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 appeals under Section 130 of the Customs Act 1962 are filedbytheAppellantassailing finalordernos.50061-50063/2022dated24th January, 2022 (hereinafter ‘impugned orders’) passed by Customs, Excise & Service Tax Appellate Tribunal, New Delhi (hereinafter ‘CESTAT’) in Customs Appeals No. 51136, 50948 and 50949 of 2020. Vide the impugned orders the CESTAT had followed the decision in Canon India Pvt. Ltd. v. Commissioner of Customs, 2021 (18) SCC 563 (hereinafter ‘Canon-I’) and had held that the DRI officers would not be proper officers for the purpose of Customs Act, 1962.

3. However, the review petition against Canon-I being Review Petition (Civil) No. 400/2021 was pending before the Supreme Court when the impugned orders were passed. Even an adjournment was sought on the said ground, however the same was rejected by the CESTAT. The relevant paras are extracted hereunder :-

“8. It would thus be seen that the Supreme Court in Canon India held that the entire proceedings initiated by the Additional Director General, DRI by issuance of a show cause notice was without any authority of law and was, therefore, liable to be set aside.

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16. The show cause notice dated 30.01.2009 issued by the Principal Additional Director General, DRI under Section 28 of the Customs Act is, therefore, without jurisdiction as the said officer was not the proper officer and, therefore all proceedings undertaken by the Department on this show cause notice is, therefore,withoutjurisdiction.Theorderdated29.05.2020passed by the Principal Commissioner, therefore, cannot be sustained.

17. The submission advanced by the learned authorised representative appearing for the Department that the hearing of this appeal should be deferred till the review petition filed by the Department in Canon India is decided was considered by the Karnataka High Court in Mohan C. Suvarna and rejected.

18.In this viewof thematter,it wouldnot be necessary to examine the issues raised on the merits of the appeal.

19. Thus, Customs Appeal No. 50948 of 2020 and 50949 of 2020 filed by the assessee are allowed and Customs Appeal No. 51136 of 2020 filed by the Department is dismissed.”

4. The assessees’ appeals were consequently allowed.

5. As of today, the decision in the Review Petition (Civil) No. 400/2021 titled 'Commissioner of Customs v. M/s Canon India Private Limited’, (hereinafter, ‘Canon-II’) has now been rendered by the Supreme Court, wherein the Supreme Court has categorically held that DRIOfficers would be ‘proper officers’ for the purposes of the Customs Act, 1962.

6. The observations in Canon-II as under :

“168.In view of the aforesaid discussion, we conclude that: [...] (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 Signature Not Verified Signed By:NAMITA CUSAA131/2022&conn.matters Page3of5 Section28andarecompetenttoissueshowcausenoticethereunder. Therefore, any challenge made to the maintainability of such show cause notices issued by this particular class of officers, on the ground of want of jurisdiction for not being the proper officer, which remain pending before various forums, 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 writpetition