Show Cause Notices Issued by DRI Invalid - CBEC to take matter to SC
THE Delhi High Court in the case of Mangali Impex Ltd - , held that sub-section (11)of Section 28of the Customs Act,1962 cannot validate SCNs or proceedings pursuant thereto in relation to non-levy, short levy or erroneous refund for the period prior to 8th April 2011, if such SCNs have been issued or proceedings conducted by officers of the Customs,DGDRI or DGCEI or by the SIIB, who are not 'proper officers' within the meaning of subsection(34) of Section 2 of the Act.
Covering the case, 04 05 2016, observed, "This is not positively the end of litigation in this matter. The Government is sure to take the matter to the Supreme Court and/or try another hand at retrospective litigation. Undoing a Supreme Court order requires deft drafting skills, which bureaucrats are not fortunately endowed with."
Now, the Board clarifies,
In this regard it may be mentioned that the amendment in Section 28 (11) of the Customs Act, 1962 was brought out by the Government, after the decision of Supreme Court in Commissioner of Customs vs Sayed Ali , wherein it was held that Customs Preventive Officers are not proper officers to issue Show Cause Notice u/s 28 of Customs Act, 1962. Vide Notification No.44/2011 dated 06.07.2011, Board assigned the functions of proper Officers to the officers of DGDRI, DGCEI and Preventive. Further, in the Statement of Facts and Reasons to the Customs (Amendment and Validation), Bill, 2011, while introducing sub-section 11 of Section 28 of the customs Act, 1962, the then FM had expressly mentioned that it has purposed to amend the Customs Act, 1962 retrospectively. Thus, the intention of Legislature was clearly spelt out. Therefore, the officers of DGDRI, DGCEI and Preventive are Proper Officers even for the Show Cause Notices issued prior to issuance of Notification dated 06.07.2011. Since the order dated 03.05.2016 of High Court of Delhi challenges the constitutional validity of sub-section (11) of Section 28 of the Customs Act, 1962, the Board has decided to file an SLP in the case before the Hon'ble Supreme Court.
The Board wants field formations to transfer all the SCNs issued by DRI, DGCEI, SIIB, Preventive prior to 06.07.2011 which are pending adjudication, to the Call Book till disposal of the matter in the Supreme Court.
CBEC Instruction in F.No..276/104/2016-CX.8A(Pt), Dated: June 29, 2016