View | DRI — A celebration of professionalism

The Directorate of Revenue Intelligence (DRI) is never far away from the news. The outstanding seizures and detections which the DRI makes with clockwork, and efficient regularity ensures that. Or because of orders passed by the courts (the latest being by the Gujarat High Court in late November 2023) questioning the legitimacy of the actions of DRI.

This year has, as per the press releases and details available on DRI’s website seen a mind-boggling range of goods seized. This is reflective both of the extent of smuggling and the incisive intelligence gathering leading to precise interdictions by the organisation.

Thus, there were seizures of gold, that yellow metal which fascinates us and for which there is an incessant demand. Gold smuggling is caste, creed, religion, sex, age, and nationality neutral — and the present duty structure makes gold smuggling an attractive preposition. Gold was sought to be smuggled through almost all the international airports-concealed in, clothing, machines, suitcases, and toilets of aircrafts, in bars and paste form, through land and train.

Agricultural goods like betel nuts and areca nuts, attempted to be smuggled to escape both policy restrictions and duty, were seized- all mis declared or concealed. Fauna, both live (baby peacocks, turtles) and dead (dried turtle skin) and ambergris were seized. Cigarettes another item prone to heavy smuggling-the duty structure and compulsory compliance requirements acting as the incentive, were seized in large numbers.

The latest seizure being at Mundra port in November 2023 of 80.1 lakh sticks from an import container shipped from Phnom Penh port.

The whole range of Narcotics & psychotropic substances ranging from cocaine, mephedrone, ketamine, heroin and ganja attempted to be smuggled saw the DRI thwarting the efforts of smugglers. Manufacturing facilities engaged in the illicit manufacture of psychotropic substances were dismantled. It may be recalled that the DRI had in earlier years some of the highest seizures of methaqualone, heroin, fentanyl, and the precursor, ephedrine.

The DRI’S ambit extends to commercial frauds. To paraphrase the definition as enunciated by the World Customs Organisation (WCO), commercial fraud is any offence against statutory or regulatory provisions which customs are responsible for enforcing. The DRI as the apex intelligence agency to combat customs offences is also at the forefront of curbing commercial fraud. The DRI has carried out investigations, issued notices and through specially designated officers initiated the adjudication process. All these powers have been exercised by DRI under the authority of appropriate notifications issued by the Central Board of Indirect Taxes & Customs (CBIC). These powers have been under challenge bringing DRI back in the news.

The Supreme Court had in a decision (Canon India Pvt Ltd vs Commissioner of Customs AIR 2021 SC 1699) having far-reaching implications, held that ‘in the absence of an entrustment under section 6 of the Customs Act 1962 an officer of DRI will not have jurisdiction to exercise the functions entrusted to Customs officers under the Act’. This in effect meant that notices demanding duty could be issued only by ‘the’ proper officer and not by any officer, which the officer of DRI was held to be. It may be recalled that the question of jurisdiction had first come up in another matter before the Supreme Court in Commissioner of Customs vs Sayed Ali (civil appeal nos. 4294-4295 of 2002). The apex court had held that there must be an assignment of specific functions for customs officers to act as proper officers empowering them to issue show cause notice. Considering the implications, the CBIC issued suitable notifications/ carried out suitable amendments validating all past actions of the officers concerned including that of the DRI. Contrary decisions were passed by the High Courts on the issue of the amendment—the matter is pending appeal in the Supreme Court.

Consequent to the Canon decision, the government filed a review petition in the Supreme Court while also carrying out necessary amendments to widen the scope of ‘proper officer’. The retrospective amendments in effect validated all actions carried out in the past by DRI. Despite this, High Courts have, citing the Canon decision (which has not been stayed) been passing orders—either quashing the notices or restraining the department from passing any consequential orders. The amendments are also under challenge. Thus, the appeals in the Sayed Ali matter, review of the Canon decision and challenge to the amendments carried out consequent to the Canon decision, are all pending in the Supreme Court. The revenue implications are estimated to be more than ₹50,000 crore. As the DRI celebrates its 66th founding day on December 4, these are issues which should weigh heavily on the organisation.

The work of the organisation has been recognised by the Government at the highest level as is evident from the endorsements on the last DRI day. The President in her message recognized DRI as ’an agency that consistently contributes above and beyond its Charter of guarding the economic frontiers of this nation’. The Prime Minister has appreciated the dedication and commitment of DRI and observed that ‘their indefatigable efforts have helped combat financial fraud and defend the economic interests of honest citizens and the nation’.

The Finance Minister has in her message recognised the organisation ‘as one of the premier intelligence and law enforcement agencies of the Government of India.’The DRI can be justifiably proud of its outstanding work. The DRI day on December 4 should be an occasion for the organisation to rededicate itself in the service of the nation. And pursue vigorously the issues pending in the Supreme Court and leave it to the sagacity and wisdom of the honourable court to pass appropriate orders. The DRI is too premier an organisation to be sacrificed at the altar of grammar- the officers of DRI were and have always been proper, elite, customs officers.