Delhi HC Holds DRI Officers as Proper Authorities under Section 28: Restores Microsoft India’s Customs Appeals for Merit Hearing [Read Order]

The Delhi High Court held that officers of the Directorate of Revenue Intelligence (DRI) are indeed “proper officers” under Section 28 of the Customs Act, 1962. As a result, the Court set aside the Customs, Excise and Service Tax Appellate Tribunal (CESTAT)’s remand orders and directed that Microsoft India’s customs appeals be heard on the merits.

The case arose from a series of appeals filed by Microsoft Corporation (India) Pvt. Ltd. against the orders of the CESTAT passed in 2017, where the Tribunal had remanded the matters to the Adjudicating Authority to await the judgment in Union of India v. Mangli Impex Ltd.(2016), then pending before the Supreme Court.

The assessee approached the High Court under Section 130 of the Customs Act, also seeking condonation of the delay in filing the appeals.

The Bench comprising Justice Prathiba M. Singh and Justice Shail Jain accepted the company’s plea after examining the reasons for the delay. The Court, however, made the condonation subject to costs of ₹10,000 per appeal, to be deposited with the Delhi High Court Bar Association Natural Calamities Relief Fund in aid of Punjab flood victims.

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While examining the main issue, the Court referred to the Supreme Court’s judgments in Canon India (P) Ltd. v. Commissioner of Customs (2021) and its review decision. The Bench noted that the matter of who qualifies as a “proper officer” under Section 28 was conclusively settled by the apex court, which held that officers of the DRI and other similar directorates are competent to issue show cause notices under the Act.

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The High Court observed that the Supreme Court had issued clear directions that all pending disputes on this question be disposed of with its findings, and that such notices should now proceed for adjudication. The Bench held that the question of the proper officer no longer remains to be adjudicated, and that the CESTAT must now hear the matter on merits.

The High Court allowed Microsoft India’s appeals, set aside the CESTAT’s impugned orders, and restored the appeals to their original position before the Tribunal.

Accordingly, the Delhi High Court reaffirmed that DRI officers are proper authorities under Section 28 of the Act.

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The assessee was represented by Nisha Bagchi, along with Pooja Sharma and Tarun Kumar, while Gibran Naushad, along with Harsh Singhal and Suraj Shekhar Singh, appeared for the Revenue.

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