Delhi High Court Refuses To Interfere With 2003 Customs Notice To Mangali Impex, Cites SC's Canon India Ruling
The Delhi High Court has declined to interfere with a 2003 show cause notice issued by the Customs Department to Mangali Impex Ltd., holding that the issue of whether the officer who issued the notice was the “proper officer” has already been settled by the Supreme Court in favour of the department.
The Division Bench of Justices Avneesh Jhingan and Shail Jain was hearing a petition challenging the show cause notice issued by the Assistant Commissioner, Special Intelligence & Investigation Branch (SIIB), under Sections 28 and 124 of the Customs Act, 1962.
Petitioner had contended that the SIIB officer was not the proper officer competent to issue the show cause notice. It relied upon the Supreme Court's 2011 judgment in Commissioner of Customs v. Syed Ali & Anr., arguing that the subsequent amendment to Section 28 of the Customs Act could not retrospectively validate the notice.
The dispute arose from the export of 27 consignments of calcium stearate by Mangali Impex. Samples were initially tested by the Central Revenue Control Laboratory (CRCL), which reported in January 1999 that the consignments contained calcium stearate.
Subsequently, during a Customs investigation, samples were re-tested, with the January 2001 report stating that they were calcium carbonate coated with salt of fatty acid.
Customs authorities had raided Petitioner's residence and office premises in August 2000. The company's director was subsequently taken into custody and a criminal investigation was initiated by the CBI. The CBI later submitted a final report, which was accepted by the Special Court in February 2006.
Meanwhile, the Commissioner of Customs (Imports and General) issued the show cause notice on October 31, 2003.
Petitioner argued that in view of the CBI closure report, no basis survived for the Customs Department to continue with the show cause notice.
The High Court however noted that the issue regarding the competence of the officer to issue the notice was no longer res integra, in view of the Supreme Court's decision in Commissioner of Customs v. Canon India Pvt. Ltd. (2025).
The Supreme Court in Canon India had decided the issue in favour of the department and held that the concerned officer was the proper authority.
The High Court observed that the present challenge had been filed at the stage of issuance of the show cause notice and the competent authority had not yet adjudicated the matter. It noted that several factual questions arising from the notice required determination, including whether the exported goods were actually calcium carbonate coated with salt of fatty acid, whether the declared FOB values were inflated, and whether the DEPB credit claimed by the petitioner was excessive or illegally obtained.
The Court further held that the effect of the CBI closure report vis-à-vis the Customs proceedings involved factual questions requiring evidence and could not be examined in writ proceedings.
As such, the Court disposed of the plea.
For Petitioner: Advocate Deepak Agrawal
For Respondents: Advocate Gibran Naushad, SSC