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TMI Blog2017 (4) TMI 980X X X X Extracts X X X X X X X X Extracts X X X X ..... 2/2017 - Dated:- 23-2-2017 - Dr. Satish Chanda, President And Mr. Madhu Mohan Damodhar, Member (Technical) Sh. G. Natarajan, Advocate for the Appellant Sh. Guna Ranjan, Superintendent (AR) for the Respondent ORDER [ Order Per Justice ( Dr. ) Satish Chandra ] The appellants are engaged in manufacture of various Aluminum Profiles falling under Chapter 76 of the Central Excise Tariff Act, 1985. They also import duty-free materials for manufacture of such profiles under advance licence scheme for export. DRI conducted verification and investigation of materials imported by appellant under number of DEEC licences. Subsequently, DRI issued a show cause notice dt. 06.03.2007 under provisions of Customs Act asking the appellant to show cause notice as to why benefit of exemption under Notification No.93/2004-Cus. dt. 10.09.2004 should not be denied and why a sum of ₹ 44,26,992/- being duty forgone on the said quantity should not be demanded. Appellant filed application before the Settlement Commission, Mumbai Bench for settlement of the case. The Commission settled the matter vide its final order dt. 22.06.2007. Appellant subsequently took cenvat credit amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer who has been assigned the specific functions of assessment and reassessment of duty in the jurisdictional area where the import concerned has been effected, in terms of Section 2 (34) of the Act, is competent to issue notice under Section 28 of the Act. Accordingly, the Hon ble Supreme Court held that Commissioner of Customs (Preventive) was not a proper officer under Section 2 (34), he did not have jurisdiction to issue a show cause notice under Section 28 of the Customs Act, 1962. 5.1 The review petition filed by the department was dismissed by the Hon ble Apex Court on the ground of delay as well as merits as reported in Commissioner Vs Sayed Ali 2011 (274) ELT A109 (SC). 5.2 Government amended Section 28 of the Customs Act, 1962 w.e.f. 08-04-2011 vide Finance Act, 2011. Subsequently, sub-section (11) was inserted in Section 28 by the Customs (Amendment and Validation) Act, 2011 dt. 16.09.2011 which reads as follows : SECTION 28. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. .... (11) Notwithstanding anything to the contrary contained in any judgment, decree or order of any court of law, tribunal or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Sayed Ali case. 5.5 The validity of this newly enacted Section 28 (11) of Customs Act was further challenged in a number of cases, however with contesting outcomes. 5.6 The Hon ble Mumbai High Court in the judgement in the case of Sunil Gupta Vs UOI decided on 03-01-2014, reported in 2015 (315) ELT 167 (Bom.), distinguished the Apex Court judgment in Sayed Ali case, noting that provisions of Customs Act have undergone a change after the said judgment. The Hon ble Mumbai High Court rejected the challenge to the new sub-section (11) of Section 28 ibid. The relevant portion of the Mumbai High Court s judgment is reproduced as under : 23. We have found that Section 28(11) was inserted by Act 14 of 2011 w.e.f. 16th September, 2011. That alters the basis of the Judgments, which have been delivered by any Court of law, Tribunal or other authority. Once this section says that all persons appointed as officers of Customs under Section 1(4) before 6th July, 2011 shall be deemed to have been and always to be the proper officers for the purpose of this section, then, the Notifications, which are referred by us above at page 369 and 373 of the paper book are specifically saved and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade to the other Judgments cited by both Mr. Singh and Mr. Jetly. 25. As a result of the above discussion and finding that Explanation 2 has not been dealing with the case, which was specifically dealt with by sub-section (11) of Section 28 of the Act, that we are of the opinion that the challenge in the Writ Petition is without any merit. The Explanation removes the doubts and states that even those cases which are governed by Section 28 and whether initiated prior to the Finance Bill, 2011 receiving the assent of the President shall continue to be governed by Section 28, as it stood immediately before the date on which such assent is received. The reference to Finance Bill therein denotes the bill by the section itself was substituted by Act 8 of 2011 w.e.f. 8th April, 2011. Prior to this Bill by which the section was substituted receiving the assent of the President of India, some cases were initiated and Section 28 was resorted to by the authorities. The Explanation 2 clarifies that they will proceed in terms of the un-amended provision. The position dealt with by insertion of Section 28(11) is distinct and that is about competence of the officer. The officers namely those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to be ensured through proper co-ordination and administrative instructions issued by the C.B.E. C. that once a SCN is issued specifying the adjudicating officer to whom it is answerable, then that adjudication officer, subject to such officer being a proper officer to whom the function of assessment has been assigned in terms of Section 2(34) of the Act, will alone proceed to adjudicate the SCN to the exclusion of all other officers who may have the power in relation to that subject matter. 70.4 The question as to the constitutional validity and effect of Section 28(11) of the Act is answered accordingly. 5.8 In yet another judgement, the High Court of Telangana and Andhra Pradesh, decided on 26-10-2016, in the case of Vuppalamritha Magnetic Components Ltd. Vs DRI (Zonal Unit), Chennai, reported in 2017 (345) ELT 161 (AP), dissented from the Mangali Impex Judgement of Delhi High Court and took a contrary view inter alia as under : 10. At the outset, we are of the considered view that the writ petition is not maintainable. The show cause notice dated 30-7-2009, which is under challenge in the present writ petition, is no longer in force. The show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight as a simple statement of a proposition of law. But it is not without exceptions. If this theory of nullity and voidity is accepted, all proceedings initiated before 8-4-2011, which have already culminated in orders of adjudication and pursuant to which recoveries have been made, are also to be deemed as non est. Therefore, the Commissionerates of Excise throughout the country can today be flooded with applications for refund of the duty paid in pursuance of the orders of adjudication passed on the basis of such show cause notices. The theory of nullity and voidity cannot be extended to such an extent as to lead to such disastrous consequences. 15. There is also one more aspect. It is not the case of the petitioner that they challenged either the impugned show cause notice or the Order-in-Original at the relevant point of time on the ground that the show cause notice was issued by a person not assigned the role of a proper officer. The petitioner had challenged the show cause notice and the order of adjudication on other grounds, which stand rejected up to Supreme Court. Therefore, the principle of finality to litigation would put a seal on the present attempt on the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2004 (164) ELT 375 (SC), once the appeal having been filed and entertained by the Supreme Court, the judgment of a High Court is in jeopardy. Relevant portions of that judgement are reproduced below : 14. Article 136 of the Constitution of India confers a special power upon this Court in terms whereof an appeal shall lie against any order passed by a Court or Tribunal. Once a Special Leave is granted and the appeal is admitted the correctness or otherwise of the judgment of the Tribunal becomes wide open. In such an appeal, the court is entitled to go into both questions of fact as well as law. In such an event the correctness of the judgment is in jeopardy. 15. Even in relation to a civil dispute, an appeal is considered to be a continuation of the suit and a decree becomes executable only when the same is finally disposed of by the Court of Appeal. . .. 38. In the aforementioned cases, this Court failed to take into consideration that once an appeal is filed before this Court and the same is entertained, the judgment of the High Court or the Tribunal is in jeopardy. The subject matter of the lis unless determined by the last Court, cannot be said to have at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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