DRI Officers Held as 'Proper Officers' under Customs Act: Delhi HC Allows Revenue's Appeal Following Supreme Court Verdict [Read Order]

In a recent ruling, the Delhi High Court allowed an appeal filed by the Commissioner of Customs, setting aside a remand order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The bench upheld the contention that DRI officers are indeed 'proper officers' for the purposes of Section 28 of the Customs Act,1962 and are empowered to issue show cause notices.

The appeal challenged the CESTAT's order, which had remanded the matter back to the original adjudicating authority on the ground that the jurisdiction of Directorate of Revenue Intelligence (DRI) officers to issue show cause notices was a sub-judice issue.

The core legal question was whether DRI officers are 'proper officers' under Section 28 of the Customs Act, 1962, competent to issue show cause notices for the recovery of duties. This issue had led to conflicting judgments across various High Courts, with the Delhi High Court in Mangali Impex Ltd. ruling against such jurisdiction, while the Bombay and Andhra Pradesh High Courts took a contrary view. CESTAT, following its own precedent, had consistently remanded such matters pending a final decision from the Supreme Court.

The legal landscape was conclusively settled by the Supreme Court in its review judgment in Commissioner of Customs v. M/s Canon India Private Limited. Overruling its earlier decision and setting aside the Mangali Impex verdict, the Supreme Court held that DRI officers are indeed 'proper officers' for the purposes of Section 28 and are empowered to issue show cause notices. The Court noted that its earlier decision had overlooked crucial notifications and the statutory scheme of the Act.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain, applying the law laid down by the Supreme Court in its review judgment, observed that the question of DRI's jurisdiction was no longer open for debate. Consequently, the CESTAT's order of remand, which was based on the now-overturned legal position, could not sustain.

Accordingly, the Delhi High Court allowed the Revenue's appeal, restored the original appeal before CESTAT, and directed the Tribunal to now adjudicate the matter on its merits, in light of the settled law that DRI officers are competent to issue show cause notices under the Customs Act.

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