LexCOMMISSIONER OF CUSTOMS versus M/S CANON INDIA PVT. LTD.
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[2024] 12 S.C.R. 202 : 2024 INSC 854 Commissioner of Customs v. M/s Canon India Pvt. Ltd. (Review Petition No. 400 of 2021) In (Civil Appeal No. 1827 of 2018) 07 November 2024 [Dr Dhananjaya Y Chandrachud, CJI, J.B. Pardiwala* and Manoj Misra, JJ.] Issue for Consideration Issue arose whether there was an “error apparent on the face of the record” for the purpose of entertaining the review petition; whether law laid down in Canon India’s case as regards the power of the DRI to issue show cause notices could be said to be the correct statement of law; whether officers of DRI are the proper officers for the purposes of s.28 of the Customs Act, 1962; whether the introduction of s.28(11) vide the Validation Act of 2011 which retrospectively validates the show cause notices issued u/s.28 with effect from 06.07.2011, is discriminatory and arbitrary for not curing the defect highlighted in Sayed Ali’s case and, thus, is violative of Art.14 of the Constitution; whether the judgment delivered by the High Court in the case of Mangali Impex’s case expounds the correct interpretation of s.28(11) and whether s.97 of the Finance Act, 2022, which retrospectively validates the show cause notices with effect from 01.04.2023, is manifestly arbitrary and thus, violative of Art.14 of the Constitution of India. Headnotes† Customs Act, 1962 – ss.2(34), 28, 17 – Proper officer – Directorate of Revenue Intelligence – DRI officers, if proper officers u/s.28 – Review of judgement in Canon India’s case which held DRI officers were not proper officers u/s.28 and thus lacked the jurisdiction to issue show cause notice in terms of s.28, since only officers directly involved in assessment u/s.17 could initiate show cause notice proceedings u/s.28 – Maintainability: *Author [2024] 12 S.C.R. 203 Commissioner of Customs v. M/s Canon India Pvt. Ltd. Held: DRI officers are ‘proper officers’ to issue show cause notice u/s.28 – Review petition seeking review of the decision in Canon India’s case allowed – DRI officers came to be appointed as the officers of customs vide Notification No. 19/90-Cus (N.T.) dated 26.04.1990 – This notification later came to be superseded by Notification No. 17/2002 dated 07.03.2002, to account for administrative changes – Circular No. 4/99-Cus dated 15.02.1999 which empowered the officers of DRI to issue show cause notices u/s.28 as well as Notification No. 44/2011 dated 06.07.2011 which assigned the functions of the proper officer for the purposes of ss.17 and 28 respectively to the officers of DRI were not brought to the notice of this Court during the proceedings in Canon India’s case, thus the judgment was rendered without looking into the circular and the notification thereby seriously affecting the correctness of the same – Decision in Canon India’s case failed to consider the statutory scheme of ss.2(34) and 5 respectively, thus the decision erroneously recorded the finding that since DRI officers were not entrusted with the functions of a proper officer for the purposes of s.28 in accordance with s.6, they did not possess the jurisdiction to issue show cause notices for the recovery of duty u/s.28 – Reliance placed in Canon India’s on the decision in Sayed Ali’s case is misplaced – Decision in Canon India’s case is reviewed only to the extent that the jurisdiction of the DRI officers to issue show cause notices u/s.28 – Officers of Directorate of Revenue Intelligence, Commissionerates of Customs (Preventive), Directorate General of Central Excise Intelligence and Commissionerates of Central Excise and other similarly situated officers are proper officers for the purposes of s.28 and are competent to issue show cause notice thereunder – Any challenge made to the maintainability of the show cause notices issued by this particular class of officers, on the ground of want of jurisdiction for not being the proper officer, which remain pending before various forums, to be dealt with in the manner stipulated. [Para 168] Customs Act, 1962 – ss.17 and 28 – Issue as regards the proper officer to issue show cause notice in terms of s.28 – Sayed Ali’s case held that the Commissioner of Customs (Preventive) is not a “proper officer” as defined in s.2(34) and thus, did not have the jurisdiction to issue a show cause notice in terms of s.28; and that only such officers who are vested with the power of assessment u/s.17 can be empowered to issue show 204 [2024] 12
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