SCN issued to Prevent Customs Duty Evasion cannot be challenged on Technical Grounds: Madras HC saves Notices issued by DRI [Read Order]

While handling a bunch of writ petitions challenging notices issued by the Director of Revenue Intelligence (DRI), the Madras High Court has held that such notices, being issued to curb customs duty evasion cannot be challenged on technical grounds. 17 writ petitions were filed before the bench of Justice C Saravanan contending that the DRI is not a “proper officer” within the meaning of the Customs Act, 1962. They further relied on the recent Supreme Court decision in the case of Canon India wherein it was held that the officer from the Directorate of Revenue Intelligence (DRI), are not the “Proper Officer” within the meaning of Section 2(34) of the Customs Act, 1962 for issuing Show Cause Notice under Section 28 of the Customs Act, 1962. The Court, while dismissing the writ petitions, held that “As far as recovery of duty not levied or not paid or short levied or short paid or erroneously refunded to a person, the power has been again vested with Senior Officers of Customs as “proper officers” as defined under Section 2 (34) of the Customs Act, 1962 read with relevant Notification referred to supra.” With regard to the decision of the Apex Court, the High Court held that “though the law laid down by the Hon'ble Supreme Court in Canon India Private Limited case referred to supra is a declaration of law under Article 141 of the Constitution of India and therefore binding on this Court and therefore some of these Writ Petitions would have to be allowed. However, in view of the validations in Section 97 of the Customs Act, 1962 vide Finance Act, 2022, I am unable to allow these Writ Petitions.” “Therefore, there is no merits in these Writ Petitions filed by the respective petitioners challenging the Show Cause Notices issued by the Officers under the Directorate of Revenue Intelligence. Therefore, the consequential orders passed under Section 28 of the Customs Act or under Section 124 and other provisions of the Customs Act also cannot be assailed,” the Court said. It was further observed that the officers from Group-B who are already from the Customs Department can be appointed as “Officers of Customs”. Similarly, the Officers of Directorate of Revenue Intelligence (DRI) are appointed as “Officers of Customs” under notification issued under Section 4(i) of the Customs Act, 1962. “Apart from the above, the Central Government may by notification can also entrust the function of the Board or any “Officers of Customs” under the Customs Act, 1962, on any other officer from any other department, viz., the Central Government, the State Government or the Local Authority either conditionally or unconditionally. Thus, under Section 6 of the Customs Act, 1962, the powers and functions(duties) of the Board and/or “Officers of Customs” specified in Section 5 read with Section 4 and notifications issued there under to implement the same can be entrusted on these officers,” the Court said. While concluding, the Court added that “Further, show cause notices issued under various provisions cannot be stifled to legitimize evasion of Customs duty on technical grounds that the Officers from Directorate of Revenue Intelligence (DRI) were incompetent to issue notices and were not officers of customs.” Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.