2019 (3) TMI 1824 - HC - Central Excise

Maintainability of petition - availability of alternative efficacious remedy of appeal - Section 35B of the Central Excise Act, 1944 - Circular No. 1000/7/2015-CX., dated 3-3-2015 - HELD THAT - We are prima facie inclined to sustain the argument of Learned Counsel for the petitioner that subsequent show cause notice dated 2-5-2017 has been issued on the basis of material discovered in the course of investigation conducted and referred to in earlier show cause notice dated 1-3-2016 issued to M/s. Chandra Protech Ltd., Silvassa. We therefore find that both the show cause notices are based on common evidence relied before different adjudicating authorities by the department, thus, giving rise to possibility of divergent views by two different adjudicating authorities. It is in order to avoid such a situation that the Central Board of Central Excise and Customs, New Delhi, in its wisdom, has rightly provided that in the case of different show cause notices issued on the same issue answerable to different adjudicating authorities, show cause notice involving the same issue shall be adjudicated by the adjudicating authority competent to decide the case involving the highest amount of duty. Argument of the respondents that request of Petitioner No. 1 for transferring the case to the Additional Director General, Directorate General of Central Excise Intelligence, Delhi Zonal Unit, New Delhi did not fall within the power of the adjudicating authority of the present case i.e. the Commissioner, Central Excise and Service Tax Commissionerate, Alwar, is wholly without any substance as it was always open for him to make a request to the competent authority seeking appropriate order of transfer of the case to the Adjudicating Authority at New Delhi. Petition allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Attractability of Clause 11.2 of Master Circular No. 1053/2/2017-CX.
2. Maintainability of the writ petition due to the availability of an alternative efficacious remedy.
3. Jurisdiction of the adjudicating authority.

Detailed Analysis:

1. Attractability of Clause 11.2 of Master Circular No. 1053/2/2017-CX:
The petitioners challenged the Order-in-Original dated 30-11-2017, arguing that Clause 11.2 of the Master Circular should apply. This clause states that in cases involving different show cause notices on the same issue answerable to different adjudicating authorities, the notice involving the highest amount of duty should be adjudicated by the competent authority. The court found substantial similarities between the two show cause notices dated 1-3-2016 and 2-5-2017, indicating that both were based on common evidence. The first notice involved a higher amount of duty, thus, according to Clause 11.2, the adjudication should be handled by the Additional Director General, Directorate General of Central Excise Intelligence, Delhi Zonal Unit, New Delhi.

2. Maintainability of the Writ Petition:
The respondents argued that the petitioners had an alternative remedy by way of appeal under Section 35B of the Central Excise Act, 1944. However, the court held that the objection raised by the petitioners touched upon the jurisdiction of the Assessing Authority, making the writ petition maintainable. The court noted that the Circular dated 3-3-2015, which the respondents relied upon, was rescinded by the Master Circular, making their reliance on it untenable.

3. Jurisdiction of the Adjudicating Authority:
The court found that the subsequent show cause notice dated 2-5-2017 was issued based on the investigation referred to in the earlier notice dated 1-3-2016. Given the common evidence and the potential for divergent views by different adjudicating authorities, the court held that the case involving the highest amount of duty should be adjudicated by the competent authority as per Clause 11.2 of the Master Circular. The court rejected the respondents' argument that the Commissioner, Central Excise and Service Tax Commissionerate, Alwar, lacked the power to transfer the case, noting that it was within his purview to request a transfer to the competent authority.

Conclusion:
The writ petition was allowed, and the impugned Order-in-Original was set aside. The proceedings pursuant to the show cause notice dated 2-5-2017 were revived and transferred to the Additional Director General, Directorate General of Central Excise Intelligence, Delhi Zonal Unit, New Delhi, for a decision in accordance with law. The Stay Application No. 3965/2018 was disposed of.