2016 (12) TMI 1913 - HC - Customs

Development Commissioner jurisdiction to act as an adjudicating authority under the provisions of the Customs Act or the Central Excise Act to impose Anti-Dumping Duty (ADD) - HELD THAT - In the light of the stand taken in the affidavit filed by the Development Commissioner, agreeing for transfer of the files to the jurisdictional Customs Officer, this Court does not propose to examine the factual or legal contentions put forth on either side and they have been set out in the preceding paragraph with a view to keep the jurisdictional Customs Officer informed about the contentions raised by the petitioner though not elaborately, but to give a broad over view of the respective contentions. Thus, developments and taking note of the affidavits referred to above, the writ petitions are disposed of by issuing the following directions. First respondent/Development Commissioner shall transfer all the files to the jurisdictional Customs Officer to enable the jurisdictional Customs Officer to take up the cases for adjudication as a regular case based on merits and in accordance with law. The files pertaining to the show cause notice shall also be transferred to the jurisdictional Customs Officer. The jurisdictional Customs Officer shall afford the petitioner an opportunity to submit their objections and thereafter take up the show cause notices for adjudication. The jurisdictional Customs Officer, while adjudicating the show cause notices, shall adjudicate as to whether the Development Commissioner has jurisdiction to issue the show cause notices or to adjudicate the matter in issue. Apart from the same, the other issues which have been raised in the show cause notices shall also be adjudicated. For this purpose, the Development Commissioner shall be heard by the jurisdictional Customs Officer. It is made clear that in the preceding paragraph, the legal position as canvassed by the petitioner and as counted by the respondent/Development Commissioner has been set out and it is for the adjudicating authority to adjudicate upon those legal issues as well, after considering the submissions of the parties. Development Commissioner has sought for a direction upon the petitioner to continue to pay ADD till the adjudication process is over. Now that the show cause notices have been directed to be adjudicated, pending adjudication, no conditions or fetters can be imposed on the petitioner for the clearances that may be effected by them to the Domestic Tariff Area Unit from the Flextronics Special Economic Zone and it shall await the final adjudication of the show cause notices and the order in original to be passed. It is made clear that this Court has not expressed any opinion on the factual issues raised and the legal issues which have been canvassed, have been set out in the preceding paragraph to give a broad over view of the contentions of the parties and it is the jurisdictional Customs Officer who has to adjudicate the show cause notices as would be regularly done by him in other cases. Since the Revenue implication appears to be large and the learned Additional Solicitor General requests some protection for the Revenue, this Court is of the view that the jurisdictional Customs Officer shall endeavour to complete the adjudication as expeditiously as possible, preferably within a period of two months from the date of receipt of a copy of this order, and the petitioner shall extend full co-operation.

Summary

Issues Involved:

1. Jurisdiction of the Development Commissioner to impose Anti-Dumping Duty (ADD).
2. Transfer of adjudication to the jurisdictional Customs Officer.
3. Interim payment of ADD pending adjudication.
4. Legal contentions regarding the applicability of ADD on PCBAs.

Detailed Analysis:

1. Jurisdiction of the Development Commissioner:

The primary contention raised by the petitioner was regarding the jurisdiction of the Development Commissioner of the Special Economic Zone (SEZ) to initiate proceedings for imposing ADD. The petitioner argued that the Development Commissioner could not act as an adjudicating authority or as a Proper Officer of Customs and Excise. The respondents, however, contended that the Special Economic Zone Act, 2005, is a self-contained code, and the Development Commissioner is vested with all necessary powers. The court did not decide on this issue, as the parties reached a consensus to transfer the case to the jurisdictional Customs Officer, with the condition that the acceptance of transfer should not be construed as an agreement on the lack of jurisdiction by the Development Commissioner.

2. Transfer of Adjudication to the Jurisdictional Customs Officer:

The court directed the transfer of all relevant files to the jurisdictional Customs Officer for adjudication on merits and in accordance with the law. It was clarified that the jurisdictional Customs Officer would adjudicate whether the Development Commissioner had jurisdiction to issue the show cause notices and adjudicate the matter. The court emphasized that the adjudicating authority should independently decide the issue after providing the petitioner an opportunity for personal hearing and submission of written arguments.

3. Interim Payment of ADD Pending Adjudication:

The Development Commissioner sought a direction for the petitioner to continue paying ADD until adjudication was complete. However, the court ruled that pending adjudication, no conditions or fetters could be imposed on the petitioner for clearances to the Domestic Tariff Area Unit from the SEZ. The court noted that the petitioner had already paid Rs.33 Crores as ADD pursuant to interim orders, and these payments would abide by the final adjudication orders.

4. Legal Contentions Regarding the Applicability of ADD on PCBAs:

The petitioner argued that the impugned show cause notices sought to re-agitate issues already decided in their favor by the Directorate General of Anti-Dumping & Allied Duties (DGAD). They contended that the DGAD is the exclusive authority to investigate circumvention of ADD, and no other authority could undertake such investigation. The petitioner also relied on previous court decisions to argue their case. The court did not delve into the factual or legal contentions, leaving them to be adjudicated by the jurisdictional Customs Officer.

Conclusion:

The writ petitions were disposed of by directing the transfer of files to the jurisdictional Customs Officer, who was instructed to adjudicate the show cause notices based on merits and law. The court refrained from expressing any opinion on the factual and legal issues, leaving them for the adjudicating authority to decide. The jurisdictional Customs Officer was urged to complete the adjudication expeditiously, preferably within two months, with the petitioner required to cooperate fully. The interim payments made by the petitioner would be subject to the final adjudication outcome.