SC restores DRI officers' powers to recover dues under Customs Act

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Last Updated09/11/2024

In a significant decision, the Supreme Court overturned the apex court’s 2021 verdict Thursday and ruled that Directorate of Revenue Intelligence (DRI) officers have the authority to issue notices and recover dues under the Customs Act, 1962.

In a significant decision on Thursday, the Supreme Court overturned its 2021 verdict, granting the Directorate of Revenue Intelligence (DRI) the power to issue notices and recover dues under the Customs Act, 1962.

Review of 2021 Canon India Decision: The ruling came in response to a petition filed by the customs department, seeking a review of the Supreme Court's 2021 judgment in Canon India Pvt Ltd vs Commissioner of Customs.
2021 Verdict Limitations: In the 2021 ruling, a three-judge bench led by then-CJI Sharad Bobde held that DRI officers could not exercise Customs powers unless the Central Government explicitly granted such authority under Section 6 of the Customs Act.

Current Bench: The judgment was delivered by a bench headed by Chief Justice D.Y. Chandrachud and included Justices J.B. Pardiwala and Manoj Misra, with Justice Pardiwala authoring the 162-page decision.
Restoring DRI Powers: The court ruled that DRI officers, along with officers from Customs Commissionerates (Preventive), the Directorate General of Central Excise Intelligence, and Central Excise Commissionerates, are authorized to issue show-cause notices under Section 28 of the Customs Act.

Statutory Oversights in 2021 Judgment: The bench noted that the Canon India decision did not consider key notifications and circulars that empowered DRI officers.
1999 Circular and 2011 Notification: The court referenced a 1999 CBEC circular and a 2011 notification that formally authorized DRI officers to act as "proper officers" under the Customs Act, allowing them to issue notices under Section 28.

Uniform Application for Pending Cases: The Supreme Court directed that all pending cases involving show-cause notices under Section 28 of the Customs Act should be decided based on this ruling.