2017 (12) TMI 984 - HC - Customs

Whether the CESTAT was justified and correct in law in passing an order of remand to the original adjudicating authority to first decide the issue of jurisdiction, after decision of the Supreme court in Civil Appeal preferred against the decision of Delhi High court in Mangli Impex Limited v. Union of India 2016 (5) TMI 225 - DELHI HIGH COURT ? Held that - It was recorded in the said order that the respondent-Revenue had no objection if the remand order passed by the Tribunal was set aside with a request to the Tribunal to decide the issue on merit without taking into consideration the decision of the Delhi High Court in Mangli Impex Limited - the Tribunal would independently apply its mind on the question of jurisdiction and decide the issue - decided in favor of appellant.

Summary

Issues:
1. Question of law regarding the jurisdiction of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in light of a previous Supreme Court decision.
2. Validity of the remand order passed by the Tribunal.
3. Imposition of penalty and the authority of the Directorate of Revenue Intelligence.

Analysis:

1. Jurisdiction of CESTAT:
The High Court addressed the substantial question of law regarding the jurisdiction of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in passing an order of remand to the original adjudicating authority. The issue arose after a decision by the Supreme Court in a Civil Appeal against a previous decision of the Delhi High Court. The High Court found that the Tribunal was not justified in remanding the case solely to decide the issue of jurisdiction. The Court directed the Tribunal to decide the appeal on merits, including the question of penalty and the authority of the Directorate of Revenue Intelligence, without being influenced by the previous judgment in the case of Mangli Impex Limited.

2. Validity of Remand Order:
The respondent Revenue accepted that the issue in the present case was similar to a previous decision of the Bench in Vipul Overseas Pvt. Ltd. v. Commissioner of Customs & Ors. The Court set aside the remand order passed by the Tribunal and instructed the Tribunal to decide the matter on merit without considering the stayed judgment of the Delhi High Court in Mangli Impex Limited. The High Court emphasized that the Tribunal should independently assess the jurisdiction issue and decide the appeal without being swayed by the previous judgment.

3. Imposition of Penalty and Authority of DRI:
The High Court's order also included directions for the Tribunal to consider the imposition of penalty and the rights of the Directorate of Revenue Intelligence (DRI) in issuing show cause notices. The Court clarified that it did not express any opinion on the specific procedures the Tribunal should follow in this regard. The judgment did not impose any costs on either party involved in the case.

In conclusion, the High Court's judgment clarified the jurisdictional issue, set aside the remand order, and directed the Tribunal to decide the appeal on merits independently of the previous judgment. The Court also addressed the imposition of penalties and the authority of the Directorate of Revenue Intelligence, providing guidance for further adjudication in the case.