2023 (12) TMI 920 - HC - Customs

Smuggling - Betel Nuts - Violation of order dated 31 March 2017 passed by the Authority for Advance Rulings (AAR) under the Chapter V B of the Customs Act, 1962 (the Act) containing Sections 28E to 28M. The only contention raised by the respondents is that because of change in law on account of dismissal of appeal by the Supreme Court against the order passed by CESTAT in case of other assessees, advance ruling is not binding. HELD THAT - It is a well settled in law that the assessee can invoke writ jurisdiction under Article 226 of the Constitution of India, despite an alternate statutory remedy of an appeal interalia on the ground that there is a breach of fundamental rights, breach of natural justice, order passed is without jurisdiction or there is a challenge to the vires of the statute. In these circumstances, the Court can exercise writ jurisdiction inspite of appeal remedy being available to the petitioner. The decision of the CESTAT, Chennai Bench in case of S.T. Enterprises 2021 (3) TMI 27 - CESTAT CHENNAI and Ayush Business Overseas 2021 (3) TMI 1285 - SC ORDER certainly cannot be a binding precedent on High Court nor can it be binding on all the authorities/assessees throughout the country. The decision of the Chennai Bench of CESTAT is binding interse between the parties before the Tribunal and not the petitioner or the authorities having jurisdiction over the petitioner. The dismissal by the Supreme Court without going into merits of the case acts only as res judicata between the parties before the Court and same cannot be said that CESTAT bench decision amounts to a declaration of law. Therefore dismissal of appeal by the assessees before the Chennai Bench of CESTAT, by the Supreme Court does not attract provisions of Section 28 J(2) of the Act for not following decision of the advance ruling rendered in the petitioner s own case. In the instant case, the respondents have passed the O-I-O contrary to the provisions of Section 28J of the Act and, therefore, the same is without jurisdiction. In view of the above discussion that the impugned order is passed without jurisdiction, writ petition is maintainable. The petitioner hence ought not to be relegated to take recourse to an appellate remedy. The impugned O-I-O dated 11th November 2022 is hereby quashed and set aside - Petition allowed.

Summary

Issues Involved:
1. Challenge to the Order-in-Original (O-I-O) dated 11th November 2022.
2. Binding nature of the Authority for Advance Rulings (AAR) decision.
3. Jurisdiction and applicability of writ jurisdiction under Article 226.
4. Alternate remedy and its applicability.

Summary:

1. Challenge to the Order-in-Original (O-I-O) dated 11th November 2022:
The petitioner challenges the O-I-O dated 11th November 2022 passed by the Deputy Commissioner of Customs, Nhava Sheva, on the grounds that it defies the AAR order dated 31 March 2017, which classified the petitioner's imported betel nut products under Customs Tariff Heading (CTH) 2106 90 30.

2. Binding Nature of the Authority for Advance Rulings (AAR) Decision:
The petitioner argues that the AAR's ruling on 31st March 2017, which classified their products under CTH 2106 90 30, is binding under Section 28J(1) of the Customs Act, 1962. The respondents' contention that the dismissal of an appeal by the Supreme Court against a CESTAT Chennai Bench decision changes the law, making the AAR ruling non-binding, was rejected. The court emphasized that the CESTAT decision is not binding on the petitioner or authorities outside its jurisdiction and does not constitute a change in law under Section 28J(2).

3. Jurisdiction and Applicability of Writ Jurisdiction under Article 226:
The court held that despite the availability of an alternate statutory remedy, writ jurisdiction under Article 226 can be invoked if there is a breach of fundamental rights, natural justice, or if the order is without jurisdiction. The court found that the O-I-O was passed without jurisdiction, contrary to Section 28J of the Customs Act, and thus, the writ petition is maintainable.

4. Alternate Remedy and its Applicability:
The respondents argued for dismissal of the petition on the grounds of an alternate remedy. However, the court noted that the decisions cited by the respondents pertain to show cause notices where jurisdiction was not in question. Given that the O-I-O was passed without jurisdiction, the court ruled that the petitioner need not resort to an appellate remedy.

Conclusion:
The court quashed and set aside the impugned O-I-O dated 11th November 2022, making the rule absolute in terms of prayer clause (a) of the petition. No costs were awarded.