2017 (8) TMI 1088 - AT - Customs

Jurisdiction - power of DRI to issue SCN - Held that - the DRI is not a competent authority - I set aside the impugned orders and remand the matter to the original authority to decide the matter keeping in view the decision of Hon ble Delhi High Court in the case of M/s Mangali Impex Ltd. M/s Pace International And Others Versus Union of India And Others 2016 (5) TMI 225 - DELHI HIGH COURT - appeal allowed by way of remand.

Issues:
1. Recall of Tribunal's Final Order due to non-payment of pre-deposit.
2. Competency of Directorate of Revenue Intelligence (DRI) to issue show cause notices under the Customs Act.
3. Jurisdiction of DRI officers to issue show cause notices.
4. Legal implications of various High Court decisions on the jurisdiction of DRI officers.
5. Impact of Supreme Court stay on conflicting High Court judgments.
6. Application of Delhi High Court judgment in similar cases.
7. Remand of matters for fresh decision based on Supreme Court decision.

Issue 1: Recall of Tribunal's Final Order
The assessee-Appellants filed Misc. Applications seeking the recall of the Tribunal's Final Order due to non-payment of the pre-deposit. After producing proof of deposit, the pre-deposit condition was satisfied, leading to the recall of the earlier order and restoration of the appeals to their original numbers. Both sides consented to hear the appeals on merit.

Issue 2: Competency of DRI to Issue Show Cause Notices
The key contention revolved around the competency of the Directorate of Revenue Intelligence (DRI) to issue show cause notices under the Customs Act. Both parties agreed that the DRI, as per a Delhi High Court ruling, was not a competent authority to issue such notices. The matter was highlighted as sub judice before the Supreme Court.

Issue 3: Jurisdiction of DRI Officers
The Tribunal noted that the jurisdiction of DRI officers to issue show cause notices under the Customs Act was a crucial issue. Reference was made to the appointment of the Additional Director General, DRI, as a proper officer for issuing demand notices under Section 28 of the Act from a specified date. Subsequent amendments and notifications were discussed to clarify the authority of DRI officers.

Issue 4: Impact of High Court Decisions
The Tribunal considered conflicting High Court decisions regarding the jurisdiction of DRI officers. While the Delhi High Court ruled in favor of the assessee, other High Courts had differing opinions. The matter eventually reached the Supreme Court, which stayed the Delhi High Court judgment, indicating the issue's unresolved nature.

Issue 5: Supreme Court Stay and Legal Implications
The Tribunal highlighted the stay granted by the Supreme Court on the Delhi High Court judgment, emphasizing the issue's significance and the need for a final decision. The impact of conflicting High Court decisions and the pending Supreme Court ruling on jurisdiction were crucial factors in the legal analysis.

Issue 6: Application of Delhi High Court Judgment
The Tribunal referenced a Delhi High Court judgment in a similar case involving the DRI's issuance of notices. Following the High Court's decision, the Tribunal set aside the impugned order and remanded the matter for the adjudicating authority to decide the jurisdiction issue post the Supreme Court's decision, ensuring the assessee's right to be heard.

Issue 7: Remand for Fresh Decision
In alignment with the legal principles derived from the Delhi High Court judgment, the Tribunal remanded the matters for a fresh decision, with both parties in agreement. The decision allowed the appeals filed by the assessee by way of remand, maintaining the status quo until a final resolution was reached.

This detailed analysis of the legal judgment from the Appellate Tribunal CESTAT KOLKATA covers the various issues involved, including the recall of orders, the competency of DRI officers, jurisdictional concerns, the impact of High Court decisions, the Supreme Court stay, and the application of legal precedents in similar cases. The summary provides a comprehensive understanding of the legal complexities and the procedural steps undertaken by the Tribunal to address the legal issues at hand.

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