2022 (5) TMI 1322 - HC - Customs

Jurisdiction - power of DRI to issue SCN - When jurisdictional High Court judgments are available upholding the competency of the DRI to issue show cause notice under Section 28 of the Customs Act, 1962 whether the CESTAT is correct in remanding the appeal? - power 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 - HELD THAT - The issues involved herein have been considered and decided by a Co-ordinate Bench of this Court, in the case of THE COMMISSIONER OF CUSTOMS VERSUS M/S. BOX CORRUGATORS AND OFFSET PRINTERS 2020 (5) TMI 475 - MADRAS HIGH COURT where it was held that in view of the fact that the learned Tribunal has clearly protected the interest of both the Revenue as well as the Assessee by directing the Assessing Authority to keep the matter pending and maintain status quo till the Hon'ble Supreme Court decides the appeal of the Revenue in the case of Mangli Impex, filed against the decision of the Delhi High Court, we do not find any reason to interfere with the decision of the Tribunal, as in our opinion, no question of law arises for consideration in this appeal. Following the latest decision in THE COMMISSIONER OF CUSTOMS VERSUS SHRI SANKET PRAFUL TOLIA 2021 (6) TMI 432 - MADRAS HIGH COURT , which are squarely covered by the issue involved herein, all these Civil Miscellaneous Appeals are allowed by setting aside the order impugned herein and the matters are remanded to the Tribunal with a direction to keep the same pending and await the decision of the Hon'ble Supreme Court in the appeals filed against the decision in Mangali Impex . However, it is made clear that the appellant shall not initiate any coercive action against the respondent(s)/assessee(s) and await the final decision in the appeals, which have been restored to the file of the Tribunal. Application disposed off.

Summary

Issues involved:
Challenging jurisdiction of DRI officials to issue show cause notices under Customs Act, 1962.

Analysis:
1. The primary issue in the present case revolves around the jurisdiction of the officials of the Directorate of Revenue Intelligence (DRI) to issue show cause notices under the Customs Act, 1962. The respondents contended that the DRI officials, who were not designated as proper officers during the relevant period, lacked jurisdiction to issue such notices. This raised a preliminary objection regarding the legality of the proceedings initiated by these authorities.

2. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the appeals filed by the respondents and remanded the matter to the original authority. The CESTAT considered the issue of jurisdiction in light of various legal developments, including amendments to Section 28 of the Customs Act and conflicting judgments by different High Courts. The CESTAT noted that the issue of whether DRI officers had the proper jurisdiction to issue show cause notices had been the subject of judicial scrutiny in multiple cases.

3. The CESTAT observed that subsequent to the Supreme Court's decision in the case of Commissioner of Customs vs. Sayed Ali, amendments were made to the Customs Act, and notifications were issued to address the jurisdictional concerns. However, there were conflicting views among different High Courts regarding the authority of DRI officers to issue show cause notices. The matter was eventually brought before the Supreme Court, which granted a stay on the judgment of the Delhi High Court.

4. The High Court, in previous similar cases, had upheld the Tribunal's decision to keep the matters pending and maintain status quo until the Supreme Court's final decision. The Court emphasized the need to await the Supreme Court's ruling on the jurisdictional issue before making a definitive decision. The Court also highlighted the importance of not taking coercive action against the respondents/assessees until the legal clarity was achieved.

5. Considering the precedents and the pending status of the jurisdictional issue before the Supreme Court, the High Court allowed the appeals, set aside the impugned orders, and remanded the matters to the Tribunal. The Court directed the Tribunal to keep the appeals pending and await the Supreme Court's decision in the appeals related to the Mangali Impex case. The Court explicitly prohibited the appellant from taking any coercive action against the respondents/assessees until the final decision was reached.

6. In conclusion, the High Court's decision in the present case aligned with the approach taken in previous similar matters, emphasizing the importance of awaiting the Supreme Court's decision on the jurisdictional issue before making a final determination. The Court's ruling aimed to maintain the status quo, protect the interests of both parties, and ensure compliance with legal procedures until clarity was achieved from the Supreme Court.