2020 (1) TMI 504 - HC - Customs

Jurisdiction - power to issue SCN - concealment of smuggled nature of goods - principles of natural justice - HELD THAT - In the matter of MANGALI IMPEX VS. UNION OF INDIA reported in 2016 (5) TMI 225 - DELHI HIGH COURT , similar issue is being adjudicated and same is at large before the Hon ble Apex Court wherein the issue relating to the insertion of sub-Section (11) of Section 28 is also under consideration. It is because of this precise reason, Customs, Excise and Service Tax Appellate Tribunal has taken a view that issue of jurisdiction would go to the root of the matter and as such, by setting aside the order passed by the Original Authority has remanded the matter back to the Adjudicating Authority with a direction to adjudicate the issue of jurisdiction at the first instance after receiving the judgment of the Hon ble Apex Court in MANGALI IMPEX VS. UNION OF INDIA. Said order of remand does not suffer from any infirmity and no substantial question of law would arise for our consideration - Appeal cannot be admitted - appeal dismissed.

Summary

Issues:
1. Correctness and legality of the Final Order passed by Customs, Excise and Service Tax Appellate Tribunal.
2. Jurisdiction of officials of Directorate of Revenue Intelligence in issuing show cause notice.
3. Amendment to Section 28 of the Customs Act and its impact on the case.
4. Remand of the matter back to the Adjudicating Authority by the Appellate Tribunal.

Issue 1: Correctness and legality of the Final Order:
The Revenue appealed the Final Order passed by the Customs, Excise and Service Tax Appellate Tribunal, challenging the correctness and legality of the decision. The Tribunal had allowed the appeal by the assessee and remanded the matter to the Original Adjudicating Authority to decide the issue of jurisdiction. The Tribunal directed the Adjudicating Authority to await the judgment of the Hon'ble Apex Court in a related case before making a final decision.

Issue 2: Jurisdiction of Directorate of Revenue Intelligence officials:
The case involved the smuggling of raw silk of foreign origin into India from Nepal, concealed within legally imported consignments. The Directorate of Revenue Intelligence intercepted a vehicle transporting such goods and issued a show cause notice proposing confiscation of the seized goods and penalties on the respondent. The Adjudicating Authority initially ordered confiscation, but the matter was remanded for fresh adjudication due to a violation of principles of natural justice. The Appellate Tribunal further remanded the case to determine the jurisdiction issue pending before the Hon'ble Apex Court.

Issue 3: Amendment to Section 28 of the Customs Act:
During the proceedings, it was noted that Section 28 of the Customs Act was amended, inserting sub-Section (11) by the Customs (Amendment and Validation) Act, 2011. The Tribunal acknowledged this amendment but contended that the order of remand was not affected by it. The issue of the insertion of sub-Section (11) of Section 28 was also under consideration in the related case pending before the Hon'ble Apex Court, influencing the decision to remand the matter for jurisdictional determination.

Issue 4: Remand of the matter by the Appellate Tribunal:
The Appellate Tribunal remanded the case back to the Adjudicating Authority to decide the jurisdiction issue as it was deemed crucial to the case. The Tribunal directed the Adjudicating Authority to await the judgment of the Hon'ble Apex Court in the related case before making a final determination. The Tribunal found no infirmity in the order of remand and rejected the appeal, stating that no substantial question of law arose for consideration, except for an exception mentioned in the CESTAT order.

Overall, the High Court rejected the appeal, upholding the decision of the Appellate Tribunal to remand the case for the Adjudicating Authority to determine the jurisdiction issue in light of the pending judgment of the Hon'ble Apex Court.