Legal principle

Show cause notices and adjudication orders issued by DRI officers are valid because they are appointed as 'Officers of Customs' under Section 4 of the Customs Act, 1962, and Section 97 of the Finance Act, 2022 retrospectively validates all such actions, though proceedings already dropped before the Finance Act, 2022 cannot be revived.

Court decision

The Court rejected the jurisdictional challenge founded on Canon India and held that DRI officers, being appointed as 'Officers of Customs' under Section 4 notifications and as proper officers, were competent, and that Section 97 of the Finance Act, 2022 validates actions already taken, with pending proceedings to be completed accordingly. W.P.Nos.33099 of 2015 (N.C.Alexander), 27344 of 2017 and 12929 & 12933 of 2021 were dismissed with liberty to file statutory appeals before CESTAT within 30 days (subject to pre-deposit under Section 129E). W.P.No.18918 of 2016 (Chirag U Jain) and W.P.Nos.11268, 11271, 11274 & 11156 of 2021 were partly allowed by way of remand (impugned orders quashed and remitted for fresh orders on merits, with cross-examination safeguards); the remaining Table-II writ petitions challenging SCNs were dismissed with directions to the adjudicating authority to decide on merits within 120 days. Proceedings already dropped prior to the Finance Act, 2022 cannot be revived.

Facts

Seventeen writ petitions were heard together before the Madras High Court; the petitioners (importers and individuals including M/s.N.C.Alexander) challenged Orders-in-Original and recovery notices (5 petitions) and Show Cause Notices (12 petitions) issued under various provisions of the Customs Act, 1962. The impugned proceedings all emanated from Show Cause Notices issued by officers of the Directorate of Revenue Intelligence (DRI), including in the lead matter OIO No.39839 of 2015 dated 29.06.2015 passed by the Commissioner of Customs, Chennai II. The specific imported goods are not identified in the extract, but the disputes concern adjudicated customs dues on imports (with valuation of imports and an 'Apostilled Contract' under the Hague Convention, 1961 raised by the lead petitioner). The petitioners' uniform contention was that DRI officers were not 'proper officers' under Section 2(34) and hence the SCNs under Section 28 and consequential orders were without jurisdiction.

Key provisions

• Section 2(34), Customs Act, 1962 — Definitions
• Section 28, Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded
• Section 17, Customs Act, 1962 — Assessment of duty
• Section 4, Customs Act, 1962 — Appointment of officers of customs
• Section 3, Customs Act, 1962 — Classes of officers of customs
• Section 6, Customs Act, 1962 — Entrustment of functions of Board and customs officers on certain other officers
• Section 46, Customs Act, 1962 — Entry of goods on importation
• Section 50, Customs Act, 1962 — Entry of goods for exportation
• Section 5, Customs Act, 1962 — Powers of officers of customs
• Section 124, Customs Act, 1962 — Issue of show cause notice before confiscation of goods etc
• Section 112, Customs Act, 1962 — Penalty for improper importation of goods
• Section 111(d), Customs Act, 1962 — Confiscation of improperly imported goods etc