Additional Director General of DRI is not empowered for initiation of recovery proceedings under Customs: SC
Case Details: Canon India (P.) Ltd. v. Commissioner of Customs
The issue under consideration was whether the Directorate of Revenue Intelligence (‘DRI’) has the authority in law to issue a show-cause notice under Section 28(4) of the Customs Act for recovery of duties allegedly not levied or paid when the goods have been cleared for import by a Deputy Commissioner of Customs who decided that the goods are exempted.
The Hon’ble Apex Court observed that Section 28(4) (supra) empowers the recovery of duty not paid, etc. and confers the power of its recovery on ‘the proper officer’.
When the statute directs that ‘the proper officer’ can determine duty not levied/not paid, it does not mean any proper officer but that proper officer alone. It is completely impermissible to allow an officer, who has ‘not’ passed the original order of assessment, to re-open the assessment on the grounds that the duty was not paid/not levied, by the original officer who had decided to clear the goods and who was competent and authorized to make the assessment. The section must therefore be construed as conferring the power of such review on the same officer or his successor or any other officer who has been assigned the function of assessment. In other words, an officer who did the assessment could only undertake a re-assessment.
Given the above, the Hon’ble Apex Court held that the show-cause notices issued by the Additional Director General of the DRI in the given case are invalid and was without any authority of law. Hence, such notices and ensuing demands are set-aside.
