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Context:

The Delhi High Court noted a "flux" in the legal position regarding DRI officers' authority to issue show-cause notices and recover duties under the Customs Act of 1962.

About the Directorate of Revenue Intelligence (DRI)

It is the principal anti-smuggling intelligence and investigation organisation, founded in 1957 by the Central Board of Indirect Taxes and Customs, Ministry of Finance.

Central Board of Indirect Taxes and Customs (CBIC)

It is in charge of administering all indirect tax matters in India, including customs duties, central excise, GST, IGST, and preventing smuggling.

It develops policies for the levy and collection of customs, excise duties, central GST, and IGST. It also prevents smuggling and handles customs, excise, GST, IGST, and narcotics issues.

It is responsible for several subordinate organisations, including Custom Houses, Central Excise and GST Commissionerates, and the Central Revenues Control Laboratory.

It collects customs duties at international airports, seaports, customs houses, international air cargo stations, international inland container depots (ICDs), land customs stations, special economic zones (SEZs) and container freight stations (CFSs).

It is headed by a chairman appointed by the Indian Government.

DRI is in charge of enforcing the terms of the Customs Act of 1962, as well as more than 50 other related Acts, such as the Arms Act and the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA).

Key Functions

Detecting and blocking illegal smuggling, such as drugs and illegal wildlife trading.

Enforcing the Customs Act and related acts.

Investigating and preventing commercial fraud involving international trade and duty evasion.

Analyse and share information on smuggling trends, seizures, and contraband flow.

Recommending solutions for addressing gaps in existing laws and procedures.

How does the DRI perform its work?

DRI operates a broad network of zonal, regional, and sub-regional units, as well as intelligence cells, across the country.

It collects, analyses, and communicates intelligence to support investigations and monitor trends in smuggling and contraband transportation.

It monitors seizures, prices, and rates to identify potential gaps in existing laws and processes.

What is the recent issue regarding the power of DRI officers?

The Delhi High Court recently highlighted a "flux" in the legal position regarding DRI officers' jurisdiction to issue show-cause notices and recover duties under the Customs Act of 1962. This question is about the legal interpretation of DRI's rights in connection to the issuance of such notices, which is an important part of its enforcement actions.

Why is this issue important?

The issue is critical because it affects DRI officers' capacity to enforce the Customs Act properly. If the legal position regarding their authority remains unclear, it might limit their capacity to take action against customs duty evasion and smuggling activities.

Must Read Articles:

DIRECTORATE OF REVENUE INTELLIGENCE (DRI)

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CUSTOM DUTIES IN INDIA

Source:

Livelaw

PRACTICE QUESTION

Q.Consider the following statements:

1. Consumers are fully aware of how much they are paying as indirect taxes.

2. Value-added tax (VAT) is a common type of direct tax levied on final services and goods.

Which of the above statements is/are correct?

A) 1 only

B) 2 only

C) Both 1 and 2

D) Neither 1 nor 2

Answer: D

Explanation:

Statement 1 is incorrect:

An indirect tax is one that an individual or business does not pay directly to the government. Instead, it is collected by an intermediary, such as a retailer, and turned over to the government. This type of tax is included in the final price of products, so customers may not always be aware of how much they are contributing.

Statement 2 is incorrect:

VAT (value-added tax) is a common type of indirect tax levied on services and goods. It is paid to the government by producers at each stage of the supply chain. VAT tax is only levied on goods sold within a specific state, which means that the buyer and seller must be in the same state.