Commissioner of Customs (Import) Vs Ashok Singhla (Delhi High Court)
New Delhi: The Delhi High Court has set aside an order passed by the Customs Excise and Service Tax Appellate Tribunal (CESTAT) that had quashed an original demand order, citing a recent review judgment by the Supreme Court. The High Court has sent the case back to CESTAT for a fresh decision on the merits, in line with the updated legal position from the Supreme Court.
The appeal was filed by the Commissioner of Customs (Import) challenging a final order issued by CESTAT on April 5, 2022. The CESTAT order had set aside an earlier order-in-original dated May 12, 2016.
The primary reason behind the CESTAT’s decision was its reliance on the Supreme Court’s judgment in Canon India Pvt. Ltd. v. Commissioner of Customs, 2021 (18) SCC 563, often referred to as ‘Canon-I’. In Canon-I, the Supreme Court had ruled that officers belonging to the Directorate of Revenue Intelligence (DRI) were not the ‘proper officers’ authorized to issue show cause notices under Section 28 of the Customs Act, 1962. Consequently, any adjudication orders stemming from such notices issued by DRI officers were held to be invalid.
However, the Delhi High Court noted that the legal landscape regarding the jurisdiction of DRI officers has since been altered by the Supreme Court itself. The High Court highlighted that the Supreme Court had reviewed its Canon-I judgment in Review Petition (Civil) No. 400/2021, titled ‘Commissioner of Customs v. M/s Canon India Private Limited’, now referred to as ‘Canon-II’.
The High Court’s order prominently features findings from the Canon-II review judgment. In Canon-II, the Supreme Court reversed its previous stance and clarified that officers of DRI, Commissionerates of Customs (Preventive), Directorate General of Central Excise Intelligence, and similar authorities are indeed ‘proper officers’ competent under the law to issue show cause notices under Section 28 of the Customs Act, 1962.
Furthermore, the Canon-II judgment provided comprehensive directives on how pending cases across various forums, where the jurisdiction of officers to issue Section 28 notices had been challenged based on the Canon-I ruling, should be handled. The Delhi High Court specifically referenced paragraph 168(vi)(e) of Canon-II, which deals with situations where orders of CESTAT have been challenged before High Courts or the Supreme Court on the ground of lack of jurisdiction of the proper officer. This directive mandates that such appeals or writ petitions shall be disposed of in accordance with the Canon-II ruling, and the impugned show cause notices are to be restored to the CESTAT for hearing the matter on its merits.
The Delhi High Court concluded that the present appeal filed by the Commissioner of Customs (Import) was squarely covered by the directions issued by the Supreme Court in paragraph 168(vi)(e) of Canon-II.
In light of the superseding judgment in Canon-II, which validated the authority of DRI officers (and others similarly placed) to issue Section 28 notices, the Delhi High Court found that the very foundation of the CESTAT’s order (which relied on the now-reviewed Canon-I) had been removed.
Accordingly, the Delhi High Court allowed the appeal filed by the Commissioner of Customs (Import) and set aside the Final Order dated April 5, 2022, passed by CESTAT. The matter, identified as Customs Appeal No. 52362 of 2016 before CESTAT, has been restored to its original position. The High Court directed CESTAT to adjudicate the appeal afresh, specifically on the merits of the case, rather than dismissing it on the preliminary ground of jurisdiction based on the invalidated premise of Canon-I.
The case has been listed before CESTAT for further proceedings on July 22, 2025. The High Court’s decision ensures that cases previously dismissed by tribunals or courts solely based on the Canon-I ruling regarding the ‘proper officer’ issue will now be heard and decided on their substantive merits as directed by the Supreme Court in its review judgment. The ruling underscores the impact of a Supreme Court review decision on related pending litigation across the country.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
