DRI Has Jurisdiction To Issue Show Cause Notice In Drawback Cases: CESTAT

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that DRI (Directorate of Revenue Intelligence) have the jurisdiction to issue show cause notice in drawback cases. P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) were addressing the issue of whether DRI Officers have the jurisdiction to issue SCN under Section 75 of the Customs Act read with the relevant Rule. In this case, Directorate of Revenue Intelligence (DRI) investigated the alleged fraudulent export activities by M/s. SSK Knit Apparels, Tirupur. A show cause notice (SCN) was issued by DRI to the Custom House Agent/ Customs Broker (CHA/ CB), appellant herein, for allegedly filing shipping bills without verifying declarations and other such acts facilitating the wrongful drawback claims. The order in original confirmed recovery of the drawback amount along with interest from the exporter. The assessee submitted that the SCNs were issued by DRI. The DRI Officers are not competent officers to issue these notices in terms of Section 75 of the Customs Act, 1962, read with Rule 16 and Rule 16A of the Central Excise and Service Tax Drawback Rules, 1995. The Tribunal referred to the Circular 24/2011-Cus., dated 31.05.2011 and observed that the circular only refers to officers of Customs. Since DRI officers were also appointed as officers of Customs, the circular would also be applicable to them and it cannot be said that they do not have jurisdiction to issue SCN in the case of drawback. Moreover, a circular does not have the same force as that of a notification issued under the Act, appointing officers of Customs and cannot over ride it, added the bench. Regarding the penalty imposed on the CHA the bench opined that Section 117 of the Customs Act will not apply to the case where allegations against the assessee pertain to their duties as a CHA/ CB and are covered by the CHALR which is a special law and will prevail over a general provision. Further the section also includes the act of abetment, which has not been demonstrated by revenue to have been done by the assessee. In view of the above, the Tribunal allowed the appeal and set aside the impugned order. Case Title: Manasa Impex Services v. Commissioner of Customs (Preventive) Case Number: Customs Appeal No. 290/2009 Counsel for Appellant/ Assessee: S. Murugappan Counsel for Respondent/ Department: Anandalakshmi Ganeshram Click Here To Read/Download Order

DRI Has Jurisdiction To Issue Show Cause Notice In Drawback Cases: CESTAT

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DRI Has Jurisdiction To Issue Show Cause Notice In Drawback Cases: CESTAT

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