2019 (10) TMI 427 - HC - Customs

Jurisdiction - power to issue SCN - Section 28 of the Customs Act, 1962 - the issue is pending for consideration before the Supreme Court in FORECH INDIA PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS INLAND, CONTAINER DEPOT, TUGHLAKABAD, NEW DELHI 2017 (12) TMI 984 - DELHI HIGH COURT where it was held that the Tribunal would independently apply its mind on the question of jurisdiction and decide the issue - HELD THAT - This Court is of the opinion that an identical approach is necessary in this case. Accordingly, following the order in FORECH INDIA PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS INLAND, CONTAINER DEPOT, TUGHLAKABAD, NEW DELHI 2017 (12) TMI 984 - DELHI HIGH COURT , this appeal is allowed and the CESTAT would independently apply its mind to the question of jurisdiction and also decide the appeal on merits, including the aspect of imposition of penalty if any. Appeal allowed in part.

Summary

Issues involved:
1. Competence and jurisdiction under the amended Section 28 of the Customs Act, 1962.
2. Dichotomy of judicial opinion regarding the jurisdiction of the Directorate of Revenue Intelligence (DRI).
3. Previous judgments of the Delhi High Court influencing the decision-making process.
4. Remand order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
5. Consideration of pending issues before the Supreme Court.
6. Imposition of penalty and the right of the Directorate of Revenue Intelligence.

Analysis:
1. The High Court addressed the issue of competence and jurisdiction under the amended Section 28 of the Customs Act, 1962. The Revenue's grievance stemmed from the CESTAT remanding issues for reconsideration by the concerned Commissioner due to conflicting judicial opinions. The Court referred to previous judgments, including one in Mangli Impex Limited v. Union of India, and another in Vipul Overseas Pvt. Ltd. & Ors. v. Commissioner of Customs & Ors., highlighting the dichotomy of views regarding the jurisdiction of the DRI.

2. The Court noted that the issues were pending consideration before the Supreme Court, citing another order in Forech India Pvt. Ltd. v. Commissioner of Customs, Inland Container Depot, Tughlakabad, New Delhi. In that order, the Court directed the Tribunal to decide the appeal on merits without being influenced by the judgment in the Mangli Impex Limited case, which was stayed by the Supreme Court.

3. Considering the submissions and material on record, the High Court concluded that an identical approach was necessary in the present case. Following the order in Forech India, the Court allowed the appeal and directed the CESTAT to independently assess the question of jurisdiction and decide the appeal on merits, including the imposition of any penalties. The appeal was allowed in part, with a specific instruction for the Tribunal to proceed only after issuing notice to the respondent.