Case Note & Summary
The Supreme Court addressed the powers of Directorate of Revenue Intelligence (DRI) officers as "proper officers" under the Customs Act, specifically regarding the issuance of show cause notices for duty evasion or short-levy. The review petition challenged the Court’s previous judgment, seeking clarification on the legislative and administrative role of DRI in customs matters. Amendments in the Customs Act, especially Section 28(11), were reviewed for their validity and interpretation.
Background of the Review Petition:
The Customs Department filed a review petition against a previous Supreme Court ruling that restricted DRI officers from issuing show cause notices unless assigned the role of a “proper officer” by the Board. The review focuses on interpreting Sections 2(34), 17, 28, and recent amendments in Finance Act, 2022 to determine DRI's role within customs jurisdiction.Prior Case Rulings and Notifications:
Previous judgments in Sayed Ali and Mangali Impex influenced the interpretation, creating ambiguity around DRI’s jurisdiction under Section 28. Notifications such as Notification No. 44/2011 assigned “proper officer” roles to various customs authorities, including DRI, but did not fully resolve conflicts in court interpretations.Constitutional Validity and Amendments:
The case challenged Section 28(11) on grounds of overreach and potential conflict with Article 14 of the Constitution (equal protection under law), questioning if it improperly expands jurisdiction to multiple officers. The Finance Act, 2022 amendments, particularly Section 110AA and Section 97, were also analyzed to determine if these changes were clarificatory or substantial.Arguments by the Customs Department:
The Department argued that DRI officers are integral to customs enforcement, appointed as "proper officers" under Section 2(34) by the Board. They contested that restricting DRI officers from issuing show cause notices undermines customs law enforcement, especially in anti-evasion matters.Counterarguments by Respondents (Canon India):
Canon India argued that only officers directly involved in assessment should issue show cause notices, as per the Act’s intended structure. They contended that allowing DRI to act without explicit authority disrupts established jurisdiction and accountability within customs operations. Key Legal Sections and Acts Discussed:Customs Act, 1962
Section 2(34): Defines "proper officer" as one assigned specific functions by the Board. Section 17: Relates to assessment of duty. Section 28: Pertains to notices for recovery of duty short-levied, erroneously refunded, etc. Section 28(11): A retrospective amendment to validate actions taken by officers who were previously unassigned as “proper officers.”Finance Act, 2022
Sections 86, 87, 88, 94, 97: Introduced amendments to clarify customs officers' roles and provide retrospective validation of actions by officers under various sections of the Customs Act. Ratio Decidendi (Legal Principle Established):The case hinges on whether DRI officers are inherently "proper officers" for customs enforcement. The Court focused on interpreting statutory language, emphasizing the importance of jurisdictional clarity and consistency in administrative appointments under the Customs Act. The judgment sought to balance the need for effective anti-evasion enforcement with adherence to statutory designations of authority.
Subjects:Customs Law, Jurisdiction of Officers, Role of DRI, Show Cause Notices.
Customs Act 1962, Directorate of Revenue Intelligence, Proper Officer, Section 28, Finance Act 2022 Amendments, Jurisdiction, Supreme Court Review, Constitutional Validity
Issue of Consideration: COMMISSIONER OF CUSTOMS VERSUS M/S CANON INDIA PVT. LTD.
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