Officials from the Directorate of Revenue Intelligence (DRI) have the authority under the Customs Act to recover duties on goods already cleared for import, the customs department informed the Supreme Court on Wednesday, as it sought a review of a 2021 verdict
The department is contesting the March 9, 2021 judgment, where a three-judge bench, led by then Chief Justice S A Bobde, ruled that DRI officers are not considered “proper officers” under the Customs Act, 1962, and therefore, lack the authority to recover duties on goods that had already been cleared for import by the customs department.
The Supreme Court had previously annulled DRI’s show cause notices issued to several private companies, including M/S Canon India Private Limited, which demanded duty payments, confiscation of goods, interest, and penalties under the Customs Act.
Additional Solicitor General N Venkataraman, representing the customs department, argued before a bench headed by Chief Justice D Y Chandrachud that the 2021 judgment contained six apparent errors and did not adequately address relevant legal provisions. Venkataraman highlighted that DRI officers are part of the customs framework and can function as customs officers under the law. He emphasized that the ruling’s assumption that DRI officers are not proper officers under the Customs Act was flawed.
The ASG remarked, “A DRI officer today can be a customs official tomorrow,” further noting that both agencies are under the Ministry of Finance, and their officers share a classification under the law. He reiterated that the judgment required a review due to its incorrect interpretation of legal provisions.
The Supreme Court’s review of the case will continue, with the next hearing scheduled for Thursday.
This legal matter has undergone multiple stages of adjudication. Initially, the bench led by Chief Justice Bobde rejected the customs department’s plea. The core legal issue revolved around whether DRI officers had the authority to issue show cause notices under the Customs Act for recovery of duties not levied or paid, in instances where goods were cleared for import by a Deputy Commissioner of Customs, who had initially ruled that the imports were duty-exempt.
The earlier judgment ruled that it was “impermissible” for an officer who had not conducted the original assessment to reopen the case. It concluded that the Additional Director General of the DRI was not a “proper officer” under the Customs Act to seek the recovery of duties on imported goods.
Subsequently, a bench led by Chief Justice N V Ramana, on May 19, 2022, agreed to hear the customs department’s review plea in open court, and the present CJI-led bench is now addressing the case.
The 2021 verdict had stemmed from cases filed by Canon India Private Limited and other companies challenging the Commissioner of Customs’ 2017 decision. The companies argued that their imported cameras were exempt from basic customs duty under a 2012 notification. The Central Excise and Service Tax Appellate Tribunal (CESTAT) had earlier upheld the DRI’s show cause notice, which sought payment of duties, confiscation of goods, interest, and penalties under the Customs Act. The private companies contended that their cameras were exempt from the duty as per the 2012 amendment to the exemption notification, originally issued in 2005 for “Digital Still Image Video Cameras.”
(With inputs from agency)
Share your news, articles, deals, columns, or press releases with us! Click the link to submit and join our platform today.
