SCN issued by DRI stayed for lack of authority under Customs Act

Last updated: 30 September 2021

Court :
Calcutta High Court

Brief :
In M/s. Aktel by Proprietorship Anand Kumar and Ors v. Union of India and Ors. [WPO No. 822 of 2021] the writ petition in the current matter has been filed by M/s. Aktel by Proprietorship Anand Kumar and Ors("the Petitioners") against Show Cause Notice dated April 13, 2020 ("SCN") issued by the Directorate of Revenue Intelligence ("DRI") under Section 124 read with Section 28 of the Customs Act, 1962 on the ground of lack of authority with the DRI to pass such SCN.

Citation :
WPO No. 822 of 2021

In M/s. Aktel by Proprietorship Anand Kumar and Ors v. Union of India and Ors. [WPO No. 822 of 2021] the writ petition in the current matter has been filed by M/s. Aktel by Proprietorship Anand Kumar and Ors("the Petitioners") against Show Cause Notice dated April 13, 2020 ("SCN") issued by the Directorate of Revenue Intelligence ("DRI") under Section 124 read with Section 28 of the Customs Act, 1962 on the ground of lack of authority with the DRI to pass such SCN.

The Petitioners contend that the SCN issued by the DRI lacks the authority by relying on the case of M/s. Canon India Private Limited v. Commissioner of Customs [Civil Appeal No.1827 of 2018 dated March 09, 2021] wherein it was held that DRI has no authority to issue any SCN under Section 28 of the Customs Act, 1962 which provides for the powers of "Proper Officer" to issue notice for payment of duties, interest etc. in case of erroneous refund or short levy of interest on duty under the provisions of Customs Act, 1962.

In the case of M/S Canon India Private Limited (supra) the SCNs issued by the DRI were struck down for denying Basic Customs Duty ("BCD") exemption on import of "Digital Still Image Video" cameras. By interpreting Section 28(4) the Customs Act, 1962, it was held that only a "Proper Officer" under the section can issue such a notice, thereby interpreting that the section provides the power only to the officer or his successor, who had originally been provided with the task of Assessment.

The Hon’ble Calcutta High Court noted that there appears to be a prima facie case by following the judgment of M/s. Canon India Private Limited (supra) wherein it was held DRI has no authority to issue such SCN and that such notice is non-est in law. Therefore, the stayed the SCN.