2021 (2) TMI 111 - HC - Customs

Jurisdiction - power to issue SCN - Whether the CESTAT committed an error in not holding that in view of amendment to Section 28 of the Customs Act by insertion of subsection 11 would empower the officers of DRI to perform the functions of proper officers under the Customs Act? - HELD THAT - From the material on record it is evident that the decision of the Supreme Court in Mangali Impex (supra) was stayed by the Supreme Court in the decision in 2016 (8) TMI 1181 - SC ORDER . Therefore instead of relying on the aforesaid judgment and remanding the matter the Tribunal ought to have awaited for adjudication of the issue by the Supreme Court. Therefore we are inclined to quash the order dated 03.05.2017 passed by the Tribunal and to direct the Tribunal to await the decision of the Supreme Court in the decision in 2016 (8) TMI 1181 - SC ORDER and thereafter to decide the appeal after affording an opportunity to the parties in accordance with law. Appeal disposed off.

Summary

Issues:
1. Setting aside and remanding the matter for adjudication on jurisdiction based on a judgment stayed by the Supreme Court.
2. Interpretation of the amendment to Section 28 of the Customs Act empowering officers of DRI.

Analysis:

Issue 1:
The appeal under Section 130 of the Customs Act, 1962 was filed by the revenue challenging the decision of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) to set aside and remand the matter for adjudication on jurisdiction. The Tribunal relied on the judgment of the Delhi High Court in Mangali Impex case, which was stayed by the Supreme Court. The revenue contended that the Tribunal erred in not awaiting the decision of the Supreme Court before remanding the matter. The High Court noted that the Supreme Court had indeed stayed the judgment in Mangali Impex case. Consequently, the High Court quashed the Tribunal's order and directed it to await the Supreme Court's decision before proceeding further with the appeal.

Issue 2:
The appeal also raised the question of whether the amendment to Section 28 of the Customs Act, which inserted subsection 11, empowered the officers of the Directorate of Revenue Intelligence (DRI) to perform the functions of proper officers under the Customs Act. However, the judgment primarily focused on the first issue related to the remand of the matter based on a stayed judgment. The High Court did not delve into the interpretation of the amendment to Section 28 in detail, as the main decision was to quash the Tribunal's order and await the Supreme Court's decision.

In conclusion, the High Court disposed of the appeal by setting aside the Tribunal's order and directing it to await the Supreme Court's decision before proceeding with the appeal. The judgment highlighted the importance of waiting for the adjudication of issues by higher courts before making decisions based on stayed judgments, ensuring proper legal procedure and adherence to the hierarchy of courts in the judicial system.