Authority: High Court of Punjab and Haryana at Chandigarh

Order Date: 04 August 2021

Case Overview

  • Petitioner: M/s Steelman Industries; Respondents: Union of India and others.
  • The writ petition challenged the order‑in‑original dated 15 May 2015, which stemmed from a show‑cause notice dated 29 Nov 2012 issued by the Joint Director, Directorate of Revenue Intelligence (DRI), Ludhiana Regional Unit.
  • Central legal issue: whether the Joint Director, DRI qualifies as the “proper officer” under Section 28(4) of the Customs Act, 1962 to issue a show‑cause notice and recover drawback pursuant to Rule 16 of the Drawback Rules, 1995.
  • The petition relied on the Supreme Court judgment in M/s Canon India Pvt. Ltd. v. Commissioner of Customs (Civil Appeal No.1827/2018, 09 Mar 2021), which held that only an officer expressly designated as “proper officer” may exercise the power under Section 28(4).
  • The Court examined statutory definitions, the requirement of specific entrustment under Section 2(34) and Section 6 of the Customs Act, and found the notifications cited by the respondents to be ultra vires and ineffective in conferring such authority on DRI officers.

Final Outcome

  • The High Court held that the Joint Director, DRI was not a “proper officer”; consequently the show‑cause notice and the subsequent order‑in‑original are illegal and are set aside.
  • All demands arising from the impugned proceedings are cancelled.
  • The authorities are free to initiate fresh proceedings in accordance with law; the petitioner may raise any of the pleas previously filed.
  • All pending miscellaneous applications are disposed of.

Topics: Customs Law; Proper Officer Jurisprudence