2018 (5) TMI 2044 - AT - Customs

Jurisdiction - power of proper officer to issue SCN - HELD THAT - The constitutionality of retrospective validation of competence to issue notice was challenged in different High Courts and, in the light of the decision of the Hon ble High Court of Delhi in Mangali Impex v. Union of India 2016 (5) TMI 225 - DELHI HIGH COURT , stayed subsequently by the Hon ble Supreme Court, and noting the diverging decisions of various High Courts, the Hyderabad bench of this Tribunal, while disposing off the appeal in Alumeco India Extrusion Ltd v. Commissioner of Central Excise, Customs Service Tax, Hyderabad-I 2009 (5) TMI 402 - CESTAT, BANGALORE , has considered it appropriate not to dispose off matters in which this preliminary issue has been agitated. Subsequent decisions of the Tribunal have set aside impugned orders, arising from such notices, for remand back to the original authority till the competence, or lack thereof, is no longer in doubt. The principle of finality of litigation may have the effect of sanctifying illegal proceedings if, ignoring the issue of jurisdiction, merit alone is considered before competence is decided by the Hon ble Supreme Court. The inequity of a recovery upheld now with jurisdiction to do so being nullified later is not particularly appealing to a judicial institution. Should it be held otherwise, there is no detriment to Revenue as the proceedings would then be reinstated. The ends of justice will be appropriately met if the impugned order is set aside and the matter remanded back to the adjudicating authority for a fresh decision after the question of jurisdiction of officers of Directorate of Revenue Intelligence to issue notice for recovery of duty is settled - Appeal allowed by way of remand.

Summary

Issues:
Jurisdiction of officers of Directorate General of Revenue Intelligence to issue show cause notice under Customs Act, 1962.

Analysis:
1. The appeal challenged an order-in-original issued by the Commissioner of Customs (Export) based on a show cause notice from an officer of Directorate General of Revenue Intelligence.
2. The appellant cited the decision of the Hon'ble High Court of Delhi in Mangali Impex v. Union of India, emphasizing that such officers lacked the power to initiate proceedings under the Customs Act, 1962. Several cases were mentioned where appeals were allowed pending a final decision by the Hon'ble Supreme Court on jurisdiction.
3. The Authorized Representative argued that the Delhi High Court's decision in Mangali Impex had been stayed by the Supreme Court, and other High Courts like Andhra Pradesh and Bombay had upheld the jurisdiction of these officers.
4. The Tribunal noted challenges to the constitutionality of retrospective validation of competence in various High Courts. The Hyderabad bench decided not to dispose of cases where this issue was raised until the competence was clarified. Subsequent decisions remanded cases back for reconsideration until jurisdiction was determined.
5. The High Court of Bombay upheld the disputed jurisdiction but later admitted a challenge to the competence in another case. The Tribunal's remand orders aligned with the views of the jurisdictional High Courts.
6. The decision of the High Court of Andhra Pradesh emphasized the doctrine of merger and the finality of orders, cautioning against setting aside show cause notices that had led to adjudication and subsequent appeals.
7. Ultimately, considering the importance of determining the competence to issue show cause notices, the Tribunal set aside the impugned order and remanded the matter for fresh adjudication once the question of jurisdiction was settled.

This detailed analysis of the judgment highlights the various arguments presented regarding the jurisdiction of officers of Directorate General of Revenue Intelligence to issue show cause notices under the Customs Act, 1962. The Tribunal's decision to remand the case back for fresh adjudication pending a final determination on the competence of these officers demonstrates a commitment to upholding legal principles and ensuring justice is served based on clarified jurisdictional matters.