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The Apex Court, vide its judgement in the case of Canon India [TS-75-SC-2021-CUST], has created an uproar in the Industry by ruling that the DRI has no power to issue Show Cause Notices under the Customs Act. The SC had concluded that the entire proceeding in the said case initiated by the DRI by issuing SCN, as invalid and without any authority of law. Accordingly, the SC had set aside the SCN.
Consequent to the said judgement, the CBIC vide Instruction No. 04/2021 – Customs dated 17 March 2021 has referred to the case of Sh. Anil Aggarwal and 11 others where the adjudication of the SCN would get barred by the limitation of time on 18 March 2021 under Section 28 of the Customs Act, on account of the inability to proceed further due to the said judgement of the SC.
In respect thereto, the CBIC has instructed that fresh SCNs under Section 28 of the Customs Act, in respect of cases presently being investigated by DRI are required to be issued by Jurisdictional Commissionerates from where imports have taken place.
While the instant judgement of the SC has far-reaching impact on the Trade and Industry, the same might be devoid of merit. The Delhi HC in the case of Mangali Impex Limited and Ors. vs. UOI [2016 (335) E.L.T. 605 (Del.)], had inter alia held that post the amendment of the Customs Act in 2011, the DRI officers were empowered to initiate proceedings under the Customs Act. However, the operation of the Delhi HC judgement had been stayed by the SC and finality on the said judgement is still awaited.
The instant judgement in Canon India (supra), has added another twist to the tale of DRI jurisdiction qua Customs Act. It would now be interesting to see as to how the CBIC would interpret this judgement of the SC.
The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned hereinrra quis.
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