2018 (5) TMI 1947 - AT - Customs

Implementation of the Indo Sri Lanka Free Trade Agreement for import of 1423 nos. of visicoolers/ refrigerated display cabinets - Benefit of N/N. 19/2000-Cus (NT) dated 1st March 2000 read with notification no. 26/2000-Cus dated 1st March 2000 - primary allegation is that the said goods after import by appellant had been shipped to M/s Haikawa Industries P Ltd Sri Lanka for reimport thereafter to circumvent the condition in notification to avail exemption. HELD THAT - A disposition of the issue on merit against the applicant without touching upon the issue of jurisdiction which if ultimately decided against Revenue would saddle them with a detriment that should never have been. On the other hand postponement of decision on merit is not to the detriment of Revenue. Owing to this distinction of consequences the Tribunal has been deferring the determination of such disputes on merit by remanding the matter back to the original authority for awaiting a finality on jurisdiction. This would best serve the ends of justice. Appeal disposed off by way of remand.

Summary

Issues:
1. Eligibility for benefit of notification no. 19/2000-Cus (NT) dated 1st March 2000.
2. Jurisdiction of officers of Directorate of Revenue Intelligence to issue show cause notice under section 28 of Customs Act, 1962.

Analysis:

Issue 1: Eligibility for benefit of notification no. 19/2000-Cus (NT) dated 1st March 2000:
The appeals in question concern the eligibility of M/s. Western Refrigeration Pvt Ltd and its Chairman for the benefit of a specific customs notification related to the Indo Sri Lanka Free Trade Agreement. The primary allegation was that the imported goods were shipped to Sri Lanka for re-import to circumvent the conditions of the notification. The classification of the goods in shipping documents was crucial in determining eligibility for exemption. The appellant's claim that the goods were assembled in full and ready to use was not accepted, leading to the conclusion that they were not entitled to exemption under the relevant rules.

Issue 2: Jurisdiction of officers of Directorate of Revenue Intelligence:
The appellant raised the issue of jurisdiction regarding the officers of Directorate of Revenue Intelligence issuing the show cause notice, which falls under the purview of the "proper officer" as per the Customs Act, 1962. The appellant cited judgments from various High Courts regarding the competence of these officers to initiate proceedings under the Act. Despite the stay on the judgment of the High Court of Delhi in a similar case, the plea of jurisdiction raised by the appellant was not dismissed. The Tribunal emphasized the importance of awaiting a final decision on jurisdiction to prevent any potential detriment to the stakeholder.

The Tribunal considered the precarious balance of consequences and decided to set aside the impugned order, remanding the matter back to the original authority to determine its jurisdiction to adjudicate the show cause notice. This decision was made to serve the ends of justice and prevent any premature conclusions that could lead to permanent detriment. The Tribunal highlighted the importance of addressing jurisdictional issues before making a final decision on the merit of the case to ensure fairness and avoid any irreversible consequences.