2020 (3) TMI 38 - HC - Customs

Whether the CESTAT was justified in remanding the matter for adjudication to the Primary Adjudicating Official to first decide the issue of jurisdiction after awaiting final decision by the Supreme Court in the appeal (by Special Leave) against Mangali Impex Limited v. Union of India 2016 (5) TMI 225 - DELHI HIGH COURT ? HELD THAT - This Court is of the opinion that in larger interest of speedier resolution of the issues rather than only deciding the question of jurisdiction it would be appropriate that CESTAT should decide the merits of the appeal i.e. the merits of the claim against the assessees rather than remitting the matter for fresh overall consideration of the issues to Adjudicating Authority. In the latter event much time and energy will be spent and avoidable delay would occur - However on the other hand if matter is remitted to the CESTAT for decision on merits there would be a fair likelihood that the same is resolved in favour of the assessee in which event the way of further appeal and recourse to appellate proceedings by Revenue would be open. The matter is remitted to the CESTAT which shall proceed to examine and decide the merits of the appeal without being influenced by the decision in Mangali Impex - Appeal allowed by way of remand.

Summary

Issues:
Delay in filing the appeal under Section 5 of the Limitation Act, justification of remanding the matter for adjudication to decide the issue of jurisdiction, conflicting views in different High Court decisions, whether adjudication on merits should be made before deciding jurisdiction, appropriateness of remitting the matter for fresh consideration, finality of jurisdiction issue based on the Supreme Court's decision.

Analysis:
The judgment addresses the delay of 93 days in filing the appeal, which is sought to be condoned under Section 5 of the Limitation Act. The main issue raised in the appeal by the Revenue is whether the CESTAT was correct in remanding the matter for adjudication to the Primary Adjudicating Official to decide the jurisdiction issue, pending the Supreme Court's final decision in an appeal against a specific case. The respondent argues that the decision in the mentioned case has been accepted by Rajasthan and Karnataka High Courts, leading to consistent remittance for fresh consideration by the Adjudicating Authority to assess jurisdiction.

The judgment highlights conflicting views in different High Court decisions regarding the remand for jurisdiction determination. The Delhi High Court cases of Madhav Sikka and Davinder Singh present differing opinions on whether the matter should be remitted for jurisdiction assessment or proceed with the merits of the case. The court emphasizes the importance of deciding jurisdiction before adjudication on merits, as only an authority with jurisdiction can make a valid adjudication.

The court concludes that for a speedier resolution, it is appropriate for CESTAT to decide the merits of the appeal rather than remit the matter for fresh consideration of jurisdiction issues. The judgment favors the view presented in the Davinder Singh case, suggesting that deciding on merits first could potentially lead to a resolution in favor of the assessee, allowing further appeal options for the Revenue. The finality of the jurisdiction issue is emphasized, stating that the decision in the mentioned case will bind all parties, preventing re-agitation of the issue.

In conclusion, the court sets aside the impugned order, remits the matter to CESTAT to decide the merits of the appeal without being influenced by previous decisions, and emphasizes that coercive actions or prosecution against the assessee should await the final outcome of the mentioned case. The appeal is disposed of accordingly, and the Stay Application is also disposed of.