2018 (7) TMI 106 - AT - Customs

Jurisdiction - Maintainability of the proceedings initiated by ADG, DGCEI - Duty Drawback - Rule 16 of the Drawback Rules, 1995 - Held that - At present, consequent to the Mangli Impex judgment 2016 (5) TMI 225 - DELHI HIGH COURT having been stayed by the Hon ble Apex Court, the Monte International decision 2016 (4) TMI 406 - CESTAT NEW DELHI cannot be taken as the settled law at this point of time - the interests of justice would be best served by remanding the matter to the original authority, for denovo consideration, after the Hon ble Supreme Court pronounces judgment in Mangli Impex - appeal allowed by way of remand.

Summary

Issues:
1. Jurisdiction of ADG, DGCEI under Rule 16 of the Customs and Central Excise Duties Drawback Rules, 1995.
2. Validity of Section 28(11) of Customs Act, 1962.
3. Applicability of Tribunal decisions and High Court judgments in similar cases.
4. Remand of the matter for denovo consideration.

Analysis:

1. The main issue in this case revolves around the jurisdiction of the Additional Director General, DGCEI under Rule 16 of the Customs and Central Excise Duties Drawback Rules, 1995. The appellant argued that the notice issued by ADG, DGCEI lacked legal support as Rule 16 demands recovery of drawback to be issued by the proper officer of customs, which ADG, DGCEI was not. The appellant relied on Circulars and legal precedents to support this argument.

2. Another significant issue raised was the validity of Section 28(11) of the Customs Act, 1962, inserted by the Customs (Amendment and Validation) Act, 2011. The respondent contended that this amendment empowered officers of Customs/DRI/DGCEI to exercise powers related to non-levy, short-levy, or erroneous refund. However, the High Court judgment in Mangli Impex Vs. Union of India questioned the applicability of this amendment for periods before 8.4.2011, leading to a debate on the legal standing of such provisions.

3. The conflicting interpretations of Tribunal decisions and High Court judgments in similar cases added complexity to the matter. While the appellant relied on the majority decision in Monte International case to challenge the jurisdiction of the proceedings initiated by ADG, DGCEI, the respondent pointed out the Mangli Impex judgment that questioned the validity of certain provisions of the Customs Act, 1962. The stay on Mangli Impex judgment by the Supreme Court further complicated the legal landscape.

4. Ultimately, the Tribunal decided to remand the matter for denovo consideration, emphasizing the need for clarity on the legal aspects surrounding the case. Given the unsettled nature of legal precedents and the pending Supreme Court judgment on the Mangli Impex case, the Tribunal deemed it appropriate to allow the appeal by way of remand, ensuring that the matter is reviewed afresh by the original authority after the Supreme Court's final decision on the relevant legal issues.