2021 (7) TMI 951 - AT - Central Excise

Jurisdiction for passing adjudication order - duty/tax involved in the present case exceeds ₹ 2 crore - Circular No. 1049/37/2016-CX dated 29-Sep-2016 - HELD THAT - Very same issue was decided in M/S PALAK DESIGNER DIAMOND JEWLLERY VERSUS UNION OF INDIA 2019 (8) TMI 714 - GUJARAT HIGH COURT - The issue involved in the said judgment was whether the Order-In-Original in respect of the Central Excise matter passed by Joint Commissioner is legal and correct or since the amount involved is more than ₹ 2 Crores the competent authority to issue the Show Cause Notice and pass the adjudication order should be Commissioner, and it was held that it cannot be said that the Joint Commissioner had no jurisdiction to issue the Show Cause Notice and adjudicate the same. Following this principle in the present case also when there is a clear observation of the hon ble High Court in the present case itself that will prevail over the board circular which was relied upon by the learned Commissioner (Appeals) - the observation of hon ble High Court will prevail over the board circular and according to which the Joint Commissioner has jurisdiction not only to issue the Show Cause Notice but also to adjudicate the same. Application disposed off.

Summary

Issues:
Jurisdiction for passing adjudication order based on the amount involved and authority to issue Show Cause Notice and adjudicate the same.

Analysis:

Issue 1: Jurisdiction for passing adjudication order
The Appellate Tribunal considered the appeal filed by the revenue against the Order-In-Appeal passed by the Commissioner (Appeals). The Commissioner (Appeals) remanded the matter due to adjudication by an incompetent authority and violation of natural justice principles. The revenue contended that the Commissioner's direction for cases involving over ?2 Crores to be handled by the Commissioner was not legally sound. The Tribunal noted that the High Court's observation in a related case emphasized that a Joint Commissioner could issue Show Cause Notices and adjudicate, as long as they were a Central Excise Officer. Despite the Commissioner (Appeals) citing a board circular, the Tribunal held that the High Court's clear observation prevails over the circular in this specific case.

Issue 2: Authority to issue Show Cause Notice and adjudicate
The Tribunal highlighted the High Court's reliance on a Supreme Court judgment, stating that a Joint Commissioner, being a Central Excise Officer, had the jurisdiction to issue Show Cause Notices and adjudicate. The Commissioner (Appeals) had erred in giving precedence to the board's circular over the judicial observation. The Tribunal emphasized that when a court judgment conflicts with a board circular, the court's decision prevails. Therefore, the Tribunal concluded that the High Court's observation established the Joint Commissioner's authority to handle the case, overturning the Commissioner (Appeals) decision. Consequently, the impugned order was modified, allowing the revenue's appeal, and the Stay Application was deemed infructuous.

In conclusion, the Appellate Tribunal's judgment clarified the jurisdictional authority for passing adjudication orders and the authority to issue Show Cause Notices and adjudicate, emphasizing the precedence of judicial observations over board circulars in case of conflict.