2021 (8) TMI 661 - HC - Customs

Jurisdiction - competency of the DRI to issue show cause notice under Section 28 of the Customs Act, 1962 - Tribunal is empowered to remand the case without deciding the issues raised therein on the ground that jurisdiction of the officer to issue show cause notice is under dispute or not? HELD THAT - No useful purpose would be served by remanding the matter, as the Commissioner of Customs has already adjudicated the issue and without deciding the merits of the matter, the appeals should not have been allowed. An order of remand should be unconditional or qualified. If it is an unconditional order of remand, that would mean that the reasons assigned by the adjudicating authority, namely, the Commissioner of Customs, Chennai, are incorrect, and the Tribunal was duty bound to record such finding and then set aside the order, and if it is satisfied that a fresh opportunity needs to be given either to the assessee or to the Revenue, then, an order of remand has to be passed. In the case on hand, the Tribunal is the last fact finding authority in the hierarchy of authorities and it is open to the Tribunal to directly receive the documents subject to reasons being recorded. Therefore, without reasons being recorded, the appeals should not have been allowed and remanded to the adjudicating authority and also parallelly status quo being ordered to be maintained. The appeals are restored to the file of the Tribunal and the order of status quo granted by the Tribunal shall continue to remain in force - Appeal allowed.

Summary

Issues:
1. Competency of Directorate of Revenue Intelligence (DRI) to issue show cause notice under Sec.28 of the Customs Act, 1962.
2. Tribunal's authority to remand a case without deciding raised issues on jurisdiction of the officer to issue show cause notice.

Issue 1: Competency of DRI to issue show cause notice
The Revenue challenged the Final Order of the Customs, Exercise & Service Tax Appellate Tribunal, citing the decision of the Delhi High Court in Mangali Impex case, which held that DRI officers are not proper officers of Customs and cannot issue show cause notices. The Tribunal also referred to the stay on this decision by the Supreme Court and another Delhi High Court decision allowing a review based on pending appeals. The High Court found that the Tribunal's remand without deciding the merits was unjustified. It emphasized that remand orders should be based on specific reasons and not passed mechanically, to avoid prejudice. The High Court noted that the Tribunal, as the final fact-finding authority, could have directly received documents if needed. The recent Supreme Court decision in M/s. Canon India Private Limited was also considered, with pending review petitions adding complexity. The High Court concluded that the impugned order needed to be set aside.

Issue 2: Tribunal's authority to remand without deciding issues
The High Court criticized the Tribunal's decision to remand the case without a proper adjudication on the merits. It highlighted the importance of remand orders being unconditional or qualified, based on specific findings. The High Court stressed that remand should not be a mechanical process and should only be done if the appellate forum cannot adjudicate without additional documents. In this case, the High Court found that the Tribunal should have directly received documents if necessary, instead of remanding the case without proper reasons. The High Court also considered the pending review petition in the Supreme Court related to the Canon India Private Limited case, adding to the complexity of the matter. Ultimately, the High Court set aside the impugned order and directed the appeals to be restored to the Tribunal, with the final decision awaiting the Supreme Court's judgment on the Mangali Impex case.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the High Court's reasoning in addressing them.