A) ABSTRACT / HEADNOTE
The case concerns the jurisdiction of officers from the Directorate of Revenue Intelligence (DRI) to issue show-cause notices under Section 28 of the Customs Act, 1962. In Canon India Pvt. Ltd. v. Commissioner of Customs, the Supreme Court had held that only officers directly involved in assessment under Section 17 of the Act could issue such notices. In this review petition, the Department challenged the Canon India judgment, arguing an error apparent on the face of the record. The Court revisited the interpretation of “proper officer” under Section 2(34) and validated the authority of DRI officers. It also examined constitutional challenges to amendments brought in via Section 28(11) and Section 97 of the Finance Act, 2022.
Keywords: DRI officers, Proper Officer, Section 28, Customs Act 1962, Review Petition, Canon India Judgment.
B) CASE DETAILS
i) Judgement Cause Title:
Commissioner of Customs v. M/s Canon India Pvt. Ltd.
ii) Case Number:
Review Petition No. 400 of 2021 in Civil Appeal No. 1827 of 2018
iii) Judgement Date:
07 November 2024
iv) Court:
Supreme Court of India
v) Quorum:
Dr. Dhananjaya Y Chandrachud (CJI), J.B. Pardiwala, and Manoj Misra, JJ.
vi) Author:
Justice J.B. Pardiwala
vii) Citation:
[2024] 12 S.C.R. 202
viii) Legal Provisions Involved:
- Customs Act, 1962: Sections 2(34), 28, 17, 4, 5, 6, 28(11).
- Finance Act, 2022: Sections 86, 87, 88, 94, and 97.
- Constitution of India: Article 14.
ix) Judgments Overruled by the Case:
- Canon India Pvt. Ltd. v. Commissioner of Customs.
- Mangali Impex Ltd. v. Union of India.
x) Case Related to Law Subjects:
Customs Law, Constitutional Law.
C) INTRODUCTION AND BACKGROUND OF JUDGEMENT
The dispute in this case originates from the Supreme Court’s decision in Canon India Pvt. Ltd. v. Commissioner of Customs. The Court held that DRI officers lacked jurisdiction to issue show-cause notices under Section 28 of the Customs Act, 1962, since they were not “proper officers” under Section 2(34). This decision relied heavily on Sayed Ali’s case, which linked Sections 17 and 28.
The Customs Department filed a Review Petition, asserting errors in the judgment. They claimed that the Court had overlooked notifications, circulars, and legislative amendments that validated the power of DRI officers. Additionally, the Court reviewed the constitutional validity of retrospective amendments made by the Validation Act of 2011 and Finance Act, 2022.
D) FACTS OF THE CASE
- Canon India Pvt. Ltd. had imported goods that were exempted from customs duty under an assessment made by the Deputy Commissioner of Customs.
- Subsequently, the DRI issued a show-cause notice to recover customs duties under Section 28 of the Customs Act, 1962.
- Canon India challenged the notice, arguing that DRI officers lacked jurisdiction under Section 28 since they were not “proper officers”.
- The Supreme Court, in Canon India, held in favor of the importer.
- The Customs Department, aggrieved by this decision, filed the present Review Petition.E) LEGAL ISSUES RAISED
- Whether there was an “error apparent on the face of the record” in Canon India’s judgment?
- Whether DRI officers qualify as “proper officers” under Section 2(34) of the Customs Act, 1962?
- Whether Section 28(11), introduced by the Validation Act of 2011, is constitutionally valid?
- Whether Section 97 of the Finance Act, 2022, which retrospectively validates show-cause notices, is arbitrary and violative of Article 14?
- Whether the interpretation in Mangali Impex concerning Section 28(11) is sustainable?
F) PETITIONER / APPELLANT’S ARGUMENTS
The Customs Department argued:
- The Canon India judgment contained errors apparent on the face of the record.
- DRI officers were appointed as customs officers under Section 4(1) of the Customs Act and designated as “proper officers” through various notifications (e.g., Notification No. 44/2011-Cus).
- The interpretation of Section 28 in Canon India ignored the legislative intent behind the introduction of Section 28(11) and Section 97.
- The judgment erroneously linked Sections 17 and 28, which operate independently under the statutory scheme.
G) RESPONDENT’S ARGUMENTS
The Respondent, Canon India Pvt. Ltd., submitted:
- DRI officers were not “proper officers” under Section 2(34).
- Retrospective amendments under Section 28(11) and Section 97 were unconstitutional as they violated Article 14.
- The reasoning in Canon India was sound and based on the earlier precedent of Sayed Ali.
H) JUDGEMENT
a. RATIO DECIDENDI
The Court held:
- DRI officers are “proper officers” under Section 2(34) of the Customs Act.
- Notifications like 44/2011-Cus and legislative amendments Section 28(11) and Section 97 validate their authority to issue show-cause notices.
- There was an error apparent in Canon India as relevant notifications and legislative schemes were not considered.
b. OBITER DICTA
The Court emphasized that legislative intent cannot be defeated by a restrictive interpretation of statutory provisions.
c. GUIDELINES
- DRI officers have jurisdiction to issue notices under Section 28.
- The constitutional validity of Section 28(11) and Section 97 is upheld.
I) CONCLUSION & COMMENTS
The Court clarified ambiguities surrounding the powers of DRI officers. The retrospective amendments addressed procedural gaps identified in earlier judgments like Sayed Ali. This decision ensures consistency and avoids chaos in the adjudication of customs disputes.
J) REFERENCES
a. Important Cases Referred
- Canon India Pvt. Ltd. v. Commissioner of Customs (2021)
- Sayed Ali and Another (2011) 2 SCR 1045
- Mangali Impex Ltd. v. Union of India (2016) SCC Online Del 2597
- Sunil Gupta v. Union of India (2014) SCC Online Bom 1742
b. Important Statutes Referred
- Customs Act, 1962
- Finance Act, 2022
- Validation Act, 2011
