Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation
Date: 23.05.2026
Delhi High Court Quashes DRI Show Cause Notice
This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .
The Delhi High Court recently delivered a significant judgment in the case of Swatch Group India Pvt Ltd & Ors. vs. Union of India & Ors., addressing crucial issues related to customs law, procedural timelines, and the powers of the Directorate of Revenue Intelligence (DRI). This article provides a detailed overview of the case, the legal arguments, and the implications of the court’s decision.
Background of the Case
Swatch Group India Pvt Ltd, an importer and exclusive distributor of luxury Swiss watches, faced a show cause notice (SCN) from the DRI. The notice alleged mis-declaration of retail sale prices (RSP) to evade customs duties, leading to the detention and seizure of watches valued at over βΉ45 crore. The DRI sought recovery of customs duty, interest, penalties, and confiscation of the seized goods under various sections of the Customs Act, 1962.
Key Legal Issues Raised
The petitioners challenged the SCN on two main grounds:
Jurisdiction of DRI Officers:
The petitioners argued that the DRI was not a “proper officer” under Section 2(34) of the Customs Act for assessment and re-assessment of goods, referencing the Supreme Court’s decision in Canon India Pvt Ltd v. Commissioner of Customs.
Limitation Period for Adjudication:
The petitioners contended that the SCN, issued in February 2018, was not adjudicated within the statutory 12-month period as required by Section 28(9) of the Customs Act, rendering any further adjudication time-barred.
Arguments by the Respondents
The government countered that:
The SCN was issued before amendments to Section 28(9) (effective from 29 March 2018), and the earlier, more flexible timeline applied.
Efforts were made to adjudicate the SCN, but delays occurred due to correspondence, hearings, and procedural requirements.
The DRI’s status as a proper officer was under review by the Supreme Court, and legislative amendments had since clarified their authority.
The Court’s Analysis and Findings
1. Applicability of Limitation Period
The court focused on whether the SCN had lapsed due to non-adjudication within the prescribed period under the unamended Section 28(9).
The phrase “where it is possible to do so” in the old law allowed some flexibility, but not indefinite delay. The onus was on the department to prove it was genuinely not possible to adjudicate within the period.
The court reviewed a detailed timeline of correspondence and hearings, noting a 17-month period of inaction by the department.
2. Departmental Lethargy vs. Genuine Impossibility
The court held that mere exchange of letters and repeated adjournments did not justify the delay.
No substantial reason was provided for not concluding hearings or determining duty within the statutory period.
The court emphasized that statutory timelines are mandatory and cannot be ignored due to departmental indifference.
3. Effect of Subsequent Amendments
Amendments to Section 28(9) and the introduction of Section 28(9A) (post-2018) did not apply retroactively to SCNs issued before 29 March 2018.
The court clarified that only SCNs issued after the amendment could benefit from the extended timelines under the new law.
Judgment and Outcome
The Delhi High Court allowed the writ petition, holding that:
The SCN issued to Swatch Group India had lapsed due to non-adjudication within the prescribed period under the unamended law.
The department’s failure to act within the statutory timeline could not be excused without valid justification.
The SCN could not be adjudicated, and the proceedings were quashed.
Implications of the Judgment
Strict Enforcement of Statutory Timelines:
The judgment reinforces that customs authorities must adhere to statutory deadlines for adjudication of SCNs, ensuring procedural fairness and certainty for taxpayers.
Departmental Accountability:
The court’s stance discourages administrative delays and holds authorities accountable for inaction.
Clarity on Applicability of Amendments:
The decision clarifies that amendments to procedural laws do not apply retroactively unless expressly stated.
Guidance for Future Cases:
The judgment serves as a precedent for similar disputes involving delayed adjudication of SCNs and the powers of DRI officers.
Conclusion
The Swatch Group India case is a landmark in customs jurisprudence, highlighting the importance of timely adjudication and the limits of departmental discretion. Importers and legal practitioners should take note of the court’s insistence on procedural discipline and the protection of taxpayer rights under the law.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 31.08.2025
The Canon India Saga- The Judgement & the journey going forward
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This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
Introduction
The jurisprudence surrounding the powers of the Directorate of Revenue Intelligence (DRI) under the Customs Act, 1962 has undergone dramatic shifts in recent years. The Supreme Courtβs ruling in Canon India Pvt. Ltd. v. Commissioner of Customs (2021) appeared to decisively curtail DRIβs jurisdiction to issue show cause notices (SCNs) under Section 28. Yet, in Commissioner of Customs v. Canon India Pvt. Ltd. (2024 Review), the Court reversed course, validating DRIβs authority subject to statutory assignment. This oscillation, coupled with legislative intervention in 2022, has produced a recalibrated enforcement regime with profound implications for importers, exporters, and the Stateβs investigative machinery.
Canon India (Customs) β 2021 vs 2024
Item
2021 decision
2024 review decision
Case & date
M/s Canon India Pvt. Ltd. v. Commissioner of Customs, Civil Appeal No. 1827/2018 and batch (decided 9-Mar-2021)
Commissioner of Customs v. M/s Canon India Pvt. Ltd., Review Petition No. 400/2021 (judgment dated 7-Nov-2024)
Core question
Whether DRI officers are βthe proper officerβ competent to issue SCNs under S28(4) after clearance by jurisdictional customs officers.
Whether Canon-2021 erred; whether DRI and certain other officers are βproper officersβ for S28; validity/effect of later statutory changes/validations.
Holding (short)
DRI not βthe proper officerβ to issue S28(4) notices; SCNs by ADG-DRI set aside.
Review allowed; DRI are proper officers for S28 (subject to assignment via notifications). Canon-2021βs reasoning corrected; validation of past SCNs upheld.
Key statutory provisions discussed
S2(34) (definition of βproper officerβ); S6 (entrustment to other govt officers); S28(4) (extended-period SCN); linkage emphasized to S17 (assessment). Court read S28 power as confined to the officer who handled assessment/re-assessment.
S2(34) (incl. post-2022 text linking assignment to S5); SS3β5 (classes/appointment/powers of customs officers); S6 (distinct from S2(34)/S5 assignment); S17 & S28 (no mandatory inter-dependence for jurisdiction under S28); S110AA (inserted 2022; prospective scheme); S28(11) (Validation Act 2011); S97, Finance Act 2022 (validation of past actions).
Notifications & Circulars considered / reproduced
β’ Notif. 17/2002-Cus (N.T.), 07-03-2002 (appointing ADG-DRI as Commissioner of Customs). β’ Notif. 40/2012-Cus (N.T.), 02-05-2012 (assignment table incl. S28 to DC/AC and above). β’ Context: exemption Notif. 2005 + amending 15/2012 for DSICs (background facts).
Appointments / assignment β’ Notif. 19/90-Cus (N.T.), 26-04-1990 (DRI appointed as customs officers; later superseded). β’ Notif. 17/2002-Cus (N.T.), 07-03-2002 (superseding earlier; DRI appointments). β’ Notif. 44/2011-Cus (N.T.), 06-07-2011 (assigning βproper officerβ functions incl. SS17 & 28 to DRI); amendments: 53/2012, 43/2019; rescinded/superseded by 25/2022-Cus (N.T.) aligned with Finance Act 2022. β’ Notif. 40/2012-Cus (N.T.), 02-05-2012 (assignment table). β’ Notif. 60/2015-Cus (N.T.), 04-06-2015 (common adjudicating authorityβdelegation to Principal DG, DRI). Circulars β’ Circular 4/99-Cus, 15-02-1999 (DRI may issue SCNs in cases they investigate; adjudication by jurisdictional officers). β’ Circular 18/2015-Cus, 09-06-2015 (guidelines on common adjudicator after Notif. 60/2015). β’ Circular 44/2011-Cus, 23-11-2011 (referred to alongside 4/99).
Treatment of earlier case-law
Relied heavily on Sayed Ali (2011) to insist that the S28 βproper officerβ must be the officer vested with S17 assessment; read S6 as the only entrustment route.
Explains Sayed Ali did not involve DRI with proper assignments; treats its S17βS28 βlinkageβ as erroneous/obiter; sets aside Delhi HCβs Mangali Impex; affirms Bombay HCβs Sunil Gupta on S28(11) validation.
Reasoning snapshot
β’ Notif. 40/2012 issued under S2(34) was held ultra vires (since S2(34) only defines; entrustment must be under S6). β’ Thus ADG-DRI lacked authority to issue S28(4) SCN.
β’ Distinguishes assignment of βproper officerβ functions (S2(34) read with S5) from entrustment under S6 (for non-customs officers). β’ Confirms multiple proper officers can exist if functions are properly assigned by notification; no statutory need that the S28 officer must be the S17 assessor (pre-S110AA). β’ Notes post-2022 amendments (to SS2,3,5 and S110AA) and Section 97 validating earlier SCNs; upholds constitutionality of S97.
Outcome / effect
SCNs by DRI quashed; ripple effect invalidated many DRI SCNs.
Review allows departmentβs plea; DRI recognized as proper officers for S28 where assigned; S97 Finance Act 2022 validation upheld; Mangali Impex overruled; Sunil Gupta approved.
A. Legal provisions canvassed
2021 (Canon-I): S2(34); S6; S28(4); linkages to S17 (assessment); reliance on Sayed Ali (2011).
Exemption notifications (factual background): 2005 exemption notification (the judgment text references No. 20/2005/25/2005) as amended by 15/2012 for digital still image video cameras. (India Budget)
2024 review judgment
Notif. 19/90-Cus (N.T.), 26-04-1990; superseded by Notif. 17/2002-Cus (N.T.), 07-03-2002 (appointment of DRI as officers of customs).
Notif. 44/2011-Cus (N.T.), 06-07-2011 (assigns βproper officerβ functions incl. SS17 & 28 to DRI); amended by 53/2012 & 43/2019; superseded by 25/2022-Cus (N.T.).
Notif. 40/2012-Cus (N.T.), 02-05-2012 (assignment table; to be read with SS4/5).
Notif. 60/2015-Cus (N.T.), 04-06-2015 (common adjudicating authorityβdelegation to Principal DG, DRI).
Circular 4/99-Cus, 15-02-1999 (DRI to issue SCNs they investigate; adjudication by field formations).
Who can issue S28 SCNs? β’ 2021: Only the officer who did (re)assessment under S17 (or was otherwise assigned) could issue S28 SCNβDRIβs SCNs were invalid. β’ 2024: The Act does not require the S28 SCN issuer to be the same person who did S17 assessment (pre-S110AA). What matters is a valid assignment of S28 functions to that officer via proper notifications (read S2(34) with S5; S6 is for non-customs officers). DRI officers were validly appointed/assigned.
Effect of later legislation β’ S110AA (2022) prospectively ties issuance of S28 SCN to the proper officer assigned to conduct S17 assessments; it doesnβt retrospectively invalidate earlier practice. β’ S97, Finance Act 2022 validated past SCNs; SC upheld its constitutionality and clarified scope vis-Γ -vis S28(11) & Explanation-2.
Companion High Court rulings β’ Delhi HC (Mangali Impex) set aside; Bombay HC (Sunil Gupta) approved.
Practical takeaways for customs disputes (post-2024)
Jurisdictional objections to DRI SCNs (pre-2022) now generally fail if the Department shows valid appointment & assignment via the above notifications.
For SCNs issued after 31-Mar-2022, consider S110AA: the issuing officer must be the assigned S17 officer; challenges should scrutinize post-2022 assignment orders.
Validation under S97 Finance Act 2022 covers past SCNs; constitutional challenges were rejected in the review.
1. Scope of the Review
The Supreme Court in 2024 was deciding a review petition against its earlier 2021 ruling. Its focus was:
Whether the 2021 reasoning (that DRI officers were not βproper officersβ) was legally sustainable, and
Whether the post-2011 Validation Act (S28(11)) and Finance Act 2022 (S97) covered past SCNs.
Because of this limited scope, the Court concentrated on notifications and circulars that existed at the time of the disputed SCNs (2005β2015 era), and the validating provisions enacted later, not on fresh notifications meant to operate prospectively.
2. Temporal Relevance
Notifications 25/2022 and 26/2022 (N.T.) were issued after 31-03-2022, expressly to align officer-assignments with the newly inserted S110AA (Finance Act 2022).
Circular 07/2022-Cus (N.T.) clarified field implementation under the new law.
Since the SCNs in dispute in Canon India dated back years earlier, the Court treated these 2022 instruments as not directly applicable to the lis (dispute) before it. Instead, the Court examined:
older appointment/assignment notifications (17/2002, 40/2012, 44/2011, 60/2015, etc.), and
The 2024 judgment did consider S110AA and S97 of Finance Act 2022 in detail. Those provisions themselves were the statutory foundation upon which Notifications 25/2022 & 26/2022 and Circular 07/2022 were based. Thus, by upholding S97 and clarifying S110AAβs prospective effect, the Court implicitly accepted the validity of the 2022 notification/circular regime, without needing to cite each by number.
4. Judicial Practice
The Supreme Court often:
Cites only those notifications/circulars that form the crux of the dispute or which were argued before it.
Leaves out subsequent administrative instruments if their effect is prospective or merely implementational.
The 2024 bench emphasized that post-31.03.2022 SCNs would fall under S110AA and fresh notifications, but it was not ruling on thoseβso it found no need to reproduce or analyze 25/2022, 26/2022, or Circular 07/2022.
In short: The 2024 Supreme Court judgment did not consider those specific 31-03-2022 notifications and circular because they were prospective instruments implementing S110AA, while the Courtβs task was to decide the validity of pre-2022 SCNs and the scope of validation under S97. Their effect was implicitly acknowledged, but not directly adjudicated.
Thatβs a very important concern. After the Canon India litigation saga and the March 2022 amendments, the powers of DRI officers have indeed been regularized, but they are not βunlimitedβ or unchecked. Let me explain in detail:
1. What changed in 2022?
Finance Act, 2022 inserted Section 110AA into the Customs Act, 1962. β It mandates that the same βproper officerβ who is assigned functions of assessment under Section 17 will also have jurisdiction to issue show cause notices under Section 28.
To operationalize this:
Notification 25/2022-Cus (N.T.) and 26/2022-Cus (N.T.) (31-03-2022) were issued. They re-assigned functions clearly to DRI, Audit, Preventive, and Commissionerates, ensuring statutory backing.
Circular 07/2022-Cus (31-03-2022) gave field-level guidance, clarifying how officers should exercise powers under the new framework.
This effectively plugged the βjurisdictional defectβ highlighted in Canon India (2021).
2. Checks on DRI powers post-2022
Even with these notifications, DRI officers are not beyond scrutiny:
(a) Statutory Limitation
Section 110AA ties issuance of SCNs to proper assignment; DRI can only act if lawfully assigned by notification.
Their jurisdiction flows strictly from Sections 2(34), 3, 5, 6, and 110AA read with the assignment notifications.
(b) Validation but Prospective Guardrails
The Supreme Court in 2024 (Canon India Review) upheld the validity of past SCNs via Section 97 of Finance Act 2022, but also emphasized that going forward, the post-2022 assignment regime applies.
This means future SCNs can be challenged if issued contrary to Section 110AA or without proper assignment.
(c) Procedural Safeguards
DRI must comply with natural justice (notice, reply, hearing).
SCNs are adjudicated by jurisdictional Commissioners/Principal Commissioners, not by DRI itself, preventing them from being βjudge in their own cause.β
Circular 07/2022 reinforces this segregation of roles.
(d) Judicial Oversight
Courts and CESTAT remain open to review whether DRI officers exceeded statutory assignment, acted mala fide, or violated procedural safeguards.
Writ petitions under Article 226/227 and appeals under Section 129A (CESTAT) and Section 130 (High Court) continue to act as a check.
3. Practical Position Going Forward
Yes, DRI has regained legal authority (as βproper officersβ), but their powers are not unfettered.
The 2022 notifications and circulars give them jurisdiction, but also bind them within the statutory scheme of Sections 17, 28, and 110AA.
Any SCN post-2022 must be tested for:
Correct assignment in the relevant notification;
Compliance with limitation under Section 28;
Observance of natural justice.
Conclusion: DRI officersβ powers will not go unchecked under Notifications 25/2022, 26/2022, and Circular 07/2022. These instruments regularize and define their jurisdiction, but checks still exist through Section 110AA, adjudication by separate authorities, and judicial review.
The Canon India Saga: Judicial U-Turn, Legislative Response, and the Recalibration of DRI Powers under the Customs Act, 1962
I. The 2021 Decision: Curtailing DRI Jurisdiction
In its 9 March 2021 judgment, the Supreme Court held that officers of DRI were not βproper officersβ under Section 28 of the Act.
The Court relied on Section 2(34) (defining βproper officerβ) and Section 6 (entrustment of functions to other government officers) to conclude that only the officer who originally assessed goods under Section 17 could subsequently reopen or reassess liability under Section 28.
Notifications such as Notification No. 40/2012-Cus (N.T.), issued to empower DRI, were held ultra vires, since Section 2(34) was merely definitional and could not serve as a source of power.
In effect, all SCNs issued by DRI under Section 28(4) were rendered invalid.
The judgmentβs reasoning was strongly influenced by Union of India v. Sayed Ali (2011), which had emphasized a close nexus between the assessing officer and the officer reopening the assessment.
II. Legislative Response: Finance Act, 2022
The 2021 ruling created widespread disruption in anti-evasion enforcement. Parliament responded promptly through the Finance Act, 2022, which introduced two pivotal reforms:
Section 110AA (prospective): mandated that the βproper officerβ assigned the functions of assessment under Section 17 would also have jurisdiction to issue notices under Section 28. This tied jurisdiction to statutory assignment rather than to the original assessing officer.
Section 97, Finance Act 2022 (retrospective): validated all past actions of DRI and similar officers, curing the jurisdictional defect identified in Canon 2021.
To operationalize these amendments, the Government issued:
Notification No. 25/2022-Cus (N.T.) and 26/2022-Cus (N.T.) (both dated 31-03-2022), re-assigning assessment and demand functions across Customs Commissionerates, DRI, Audit, and Preventive formations.
Circular No. 07/2022-Cus (31-03-2022), clarifying procedural aspects of SCN issuance and adjudication under the new regime.
III. The 2024 Review Decision: A Judicial Recalibration
In its 7 November 2024 judgment, the Supreme Court allowed the Departmentβs review petitions, effectively reversing the 2021 ruling.
Assignment vs. Entrustment: The Court distinguished between assignment of functions (Sections 2(34) read with 3, 4, and 5) and entrustment of functions (Section 6). Since DRI officers were duly appointed and their functions assigned through statutory notifications (17/2002, 44/2011, 40/2012, 60/2015), they qualified as βproper officers.β
Rejection of Section 17β28 Nexus: The earlier insistence that the officer under Section 28 must be the same officer who assessed under Section 17 was held erroneous, save for the prospective effect of Section 110AA.
Validation: The Court upheld the constitutionality of Section 97, Finance Act 2022, thereby retrospectively validating past SCNs.
Precedents Revisited:Mangali Impex (Delhi High Court), which had invalidated DRI notices, was expressly overruled, while Sunil Gupta (Bombay High Court) was approved.
Thus, the Court restored DRIβs jurisdiction while acknowledging the legislative guardrails introduced in 2022.
IV. The Status of Notifications and Circulars
It is noteworthy that Notifications 25/2022, 26/2022 and Circular 07/2022 were not expressly discussed in the 2024 judgment. This was deliberate:
The Courtβs task in review was confined to pre-2022 SCNs and the effect of retrospective validation.
Since the 2022 instruments were prospective, their role was implicitly recognized but not adjudicated upon.
Accordingly, future SCNs will be governed by Section 110AA and these notifications, while past SCNs stand validated by Section 97 of Finance Act, 2022.
V. Will DRI Powers Go Unchecked?
Concerns about unchecked investigative powers must be balanced against statutory safeguards:
Statutory Assignment β DRIβs jurisdiction flows strictly from notifications issued under Sections 3, 5, and 110AA; it cannot act beyond assigned functions.
Separation of Roles β While DRI investigates and issues SCNs, adjudication lies with jurisdictional Commissioners, ensuring impartiality.
Natural Justice and Limitation β Section 28 prescribes limitation periods and procedural fairness, binding on DRI.
Judicial Oversight β Writ jurisdiction under Article 226 and appeals under Sections 129A and 130 act as systemic checks on arbitrary exercise.
Thus, the new framework strengthens enforcement while embedding institutional and judicial safeguards.
VI. Conclusion
The Canon India saga exemplifies the dynamic interplay between judicial pronouncement, legislative correction, and administrative implementation.
The 2021 judgment underscored the dangers of empowering investigative agencies without statutory clarity.
The 2022 amendments created a prospective framework under Section 110AA and retrospectively validated past SCNs under Section 97.
The 2024 review judgment restored balance by recognizing DRIβs jurisdiction but within the bounds of statutory assignment.
Going forward, litigation will likely shift from jurisdictional challenges to questions of procedural compliance, limitation, and fairness in adjudication. For taxpayers and counsel, the message is clear: the battle has moved from βwhetherβ DRI can issue SCNs, to βhowβ those SCNs are exercised under law.
Editorial Note: The Canon India trajectoryβfrom invalidation, to legislative intervention, to judicial recalibrationβis a striking illustration of how revenue enforcement, judicial oversight, and legislative sovereignty co-evolve. For customs law in India, it marks the end of jurisdictional uncertainty and the beginning of a new era of substantive procedural scrutiny.
Source: Canon-2021 judgment (9-Mar-2021) β Supreme Court of India (Reportable) & Canon-2024 review judgment (7-Nov-2024) β Supreme Court of India (Reportable)
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 11.08.2025
CESTAT Kolkata- Under Valuation and Confiscation set aside as it was legally unsustainable β β
In a significant ruling, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Eastern Zonal Bench, Kolkata, has set aside demands for differential customs duty, penalties, and confiscation orders against M/s. β Gemini Metal Corporation and Appellant. This decision, pronounced on August 7, 2025, highlights the importance of procedural compliance and evidentiary standards in customs investigations.
Background of the Case
The case revolved around allegations of undervaluation of imported goodsβCold Rolled Stainless Steel Coilsβby M/s. β Gemini Metal Corporation (Appellant 1). β The Directorate of Revenue Intelligence (DRI) claimed that invoices retrieved from the mobile phone of Mr. β Deepak Jindal (Appellant 2) indicated higher import values than those declared by Appellant 1. Based on these invoices, the authorities demanded differential customs duty of Rs. β 2.45 crore, along with interest and penalties, and imposed penalties on Mr. Jindal under Section 112(b) of the Customs Act, 1962.
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 23.06.2025
CESTAT Mumbai: Undervaluation Allegations Dismissed Over Invalid Electronic Evidence
Background of the Case
M/s Winsor Enterprises, a Mumbai-based importer of bags and PVC leather cloth, along with its partners, were subjected to an intense investigation by the DRI Surat Unit. The DRI alleged that the appellants had undervalued imported goods from China with the intent to evade customs duty. Based on electronic communications and printouts seized during a search operation in 2017, the Customs Department issued a Show Cause Notice proposing:
Reassessment of customs duty under Section 28(4),
Confiscation of goods under Section 111,
Penalties under Sections 112(a), 114A, and 114AA.
The adjudicating authority confirmed the demands and imposed total penalties exceeding βΉ9 crore.
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 21.06.2025
CESTAT Kolkata Sets Aside Penalties in βΉ5.82 Crore Firecracker Seizure
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata has set aside all penalties imposed on six individuals alleged to be involved in the illegal storage and smuggling of firecrackers purportedly of Chinese origin, valued at βΉ5.82 crores.
The case revolved around a town seizure made by the DRI from a godown in Dankuni, West Bengal, where firecrackers were allegedly smuggled and stored in violation of Customs and Explosives laws. However, the Tribunal found multiple procedural lapses and lack of evidence, leading to full relief for the appellants.
Background
Date of Seizure: 07β08 August 2021
Location: Godown No.1-D, Vidya Complex-1, Dankuni, West Bengal
Goods Seized: Firecrackers stored in over 2500 gunny sacks, allegedly of Chinese origin
Valuation: βΉ5,82,12,560/-
Penalties Imposed:
βΉ10,00,000 β (Alleged Mastermind)
βΉ5,00,000 β (Company Representative)
βΉ5,00,000 β (IEC Provider)
βΉ50,000 each β (Driver, Godown Owner, Misc.)
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 05.06.2025
CESTAT Kolkata Sets Aside Penalty for Alleged Role in Foreign Gold Smuggling
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata Bench, has ruled in favour of an appellant who was penalized βΉ30 lakhs under Section 112(b) of the Customs Act, 1962, for alleged involvement in gold smuggling from Bhutan. The case highlights the importance of independent corroborative evidence when imposing penalties, particularly in cases involving sensitive imports like gold.
Case Background
The Directorate of Revenue Intelligence (DRI), Siliguri, conducted a series of seizures involving smuggled foreign origin gold allegedly routed through Bhutan and subsequently melted in Indian melting units.
The appellant, who owned a gold melting unit, was charged with:
Aiding in the concealment and melting of smuggled gold.
Violating Section 112(b) of the Customs Act, 1962.
Being part of a conspiracy involving illegal import and laundering of foreign gold.
The adjudicating authority had imposed a personal penalty of βΉ30 lakhs on the appellant, citing statements made by alleged co-conspirators.
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 26.05.2025
Delhi High Court Quashes DRI Summons and Complaint in Foreign Currency Case
The Delhi High Court in CRL.M.C. 7919/2023 & CRL.M.A. 29532/2023 quashed the criminal complaint and the summoning order issued against Mr. Pawan Kant Munjal, Executive Chairman of Hero MotoCorp, by the Directorate of Revenue Intelligence (DRI). The court held that the proceedings were based on a set of facts already conclusively adjudicated in favour of the petitioner, and continuing with the prosecution would amount to an abuse of process of law.
Complaint Filed By: Directorate of Revenue Intelligence (DRI)
Subject: Alleged violation involving undeclared foreign currency seized from an aide during an international business trip in 2018
Key Event: Mr. Amit Bali, assistant of SEMPL (event coordinator), was found carrying undeclared currency amounting to approx. βΉ81 lakh
DRI Allegation: The currency belonged to Mr. Munjal and was exported illegally in contravention of the Customs Act and FEMA
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 06.05.2025
CESTAT Allahabad set aside the confiscation of gold, silver, and cash
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad Bench has allowed appeals filed by Appellants, overturning the Order-in-Original dated April 11, 2022. The case revolved around the alleged smuggling of 3499.750 grams of gold, silver recovery, and Rs. 16.5 lakhs in cash, with charges leveled under multiple sections of the Customs Act, 1962, including Sections 111, 112, 121, and 123.
Case Background
The Directorate of Revenue Intelligence (DRI), Lucknow Zonal Unit, seized the gold on February 13, 2021 based on intelligence inputs.
Subsequent search of the Mitruka brothersβ premises led to seizure of 7770.410 gm of silver and Rs. 16.5 lakh in cash.
Show Cause Notices were issued alleging a conspiracy to smuggle gold into India via Myanmar through Guwahati and Bihar.
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 30.04.2025
CESTAT Allahabad Quashes Penalty on R-22 Gas Smuggling
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Allahabad Bench, allowed the appeal of Appellant and set aside penalties imposed in a case related to the smuggling of R-22 gas cylinders.
Case Background:
Directorate of Revenue Intelligence (DRI) investigations revealed that R-22 gas cylinders were smuggled from Dubai concealed under consignments of heavy melting scrap.
The impugned imports were attributed to Indian entitiesβM/s Ramesh & Company and M/s Vipan & Companyβusing fake partitions in containers.
The appellant was accused of abetting the operation from Dubai and was penalized βΉ20 lakh under Section 112(a)(i) and βΉ15 lakh under Section 114AA of the Customs Act, 1962.
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 29.04.2025
CESTAT Kolkata Rules in Favor of La Opala RG Ltd. on SHIS Duty Benefit Dispute
The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata, ruled in favor of M/s. La Opala RG Ltd., quashing a duty demand of nearly Rs. 58 lakh raised by Customs for imports made under the Status Holder Incentive Scrip (SHIS) scheme.
Background:
M/s. La Opala RG Ltd., a prominent glassware manufacturer, imported key manufacturing inputs such as Crucible Pots, Pot Rings, Abrasive Belts, PVA Wheels, Bevelling Cones, and Refractories between December 2012 and February 2015. These imports were made under 12 SHIS scrips via 14 Bills of Entry.
Subsequently, the Directorate of Revenue Intelligence (DRI) issued a Show Cause Notice alleging that:
The imported items were not capital goods or directly related to previously imported capital goods.
SHIS scrips were misused to debit duty beyond the permissible 10% of the total scrip value.
The adjudicating authority confirmed a customs duty demand of Rs. 57,94,958 with interest and equal penalty under Section 114A of the Customs Act, 1962.
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
