DRI officers would be ‘Proper Officers’ under Customs: Delhi HC clarifies Jurisdiction Issue with SC ruling [Read Order]

In a recent ruling, the Delhi High Court clarified the implications of the Supreme Court’s Canon India judgment, holding that DRI officers qualify as ‘proper officers’ under the Customs Act. It also ruled that any penalty imposed without a proper hearing must be referred back to the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) for adjudication.

The petitioner had challenged a final order dated January 9, 2020, and a subsequent rectification order dated April 22, 2022, both passed by the CESTAT. According to the petitioner, only 24 out of 30 appeals listed were adequately heard, and their appeal concerning DFIA licenses was never addressed on merits.

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This claim was made more evident when the Tribunal’s order included a chart listing just 24 appeals, leaving out the appellant’s case. Although the Department maintained that all 30 matters were heard together, the High Court found otherwise upon examining the record.

The bench noted the Supreme Court’s verdict in Canon India Private Ltd. (Canon-II) had already clarified the jurisdictional authority of DRI officers, effectively resolving one of the contentions. It ruled that the DRI officers would be ‘Proper Officers’ under Customs Act, 1962.

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However, the Delhi High Court stated that apart from jurisdictional issues, the appellant had raised substantive grounds relating to penalties and duties imposed under Section 114A of the Customs Act, which warranted a proper hearing.

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Justices Prathiba M. Singh and Rajneesh Kumar Gupta noted that appellant had not been granted a meaningful opportunity to present its case before the CESTAT, the Court held that procedural fairness was compromised.

It therefore restored Customs Appeal No. 53658/2018 to its original position and directed CESTAT to hear the matter afresh. The appellant was granted liberty to appear before the tribunal on July 21, 2025, and the CESTAT was instructed to pass a reasoned and detailed order after hearing both parties.

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