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TMI Blog2018 (1) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... I.), investigations were conducted in respect of various consignments of shoe uppers, ready-made garments etc. which had been exported through ICD, Tiruppur, ICD Coimbatore. It appeared that concerned exporters had grossly over invoiced the value of the export goods with an intention to avail ineligible drawback benefits. It also appeared that this alleged fraud was facilitated by other persons, inter alia, the CHAs, shipping lines, freight forwarders etc. who are the appellants herein. Pursuant to the investigations, show cause notices were issued under Rule 16 & 16A of Drawback Rules, 1995 read with Section 75 (1) and Section 147 of Customs Act, 1962, which culminated in the impugned orders wherein, inter alia, recovery of the alleged fraudulently availed drawback amount was ordered by the adjudicating authority along with interest liability thereon. The confiscation of the offending goods was also ordered. Penalties were imposed on the concerned exporters as also on the appellants herein. The present appeals have been filed only by the concerned CHAs/shipping lines etc. who had been made noticees to the SCNs in respect of penalties imposed on them. 3. Today when the matter came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal (supra) relied upon by the Ld. Advocate concerns the recoverability of irregular availment of drawback from exporters by invocation of Rule 16 and where the SCNs have been issued by D.R.I. However, the said decision does not go into the aspect of whether penalties can be imposed under Section 114 / 117 of the Customs Act on CHAs and other persons who have facilitated the fraud. (ii) In any case, the proposal for imposition of penalty on the appellants has been made in terms of Section 114 / 117 of the Customs Act. The proposal in the SCN is for imposition of penalty under Section 114 of the Customs Act and Section 117 for the acts or omissions of appellants in abetting and facilitating exporters in the said fraud. (iii) Hence the action that has been proposed against the appellants herein and also imposition of penalties in the impugned orders is separate and therefore it cannot be said that just because a SCN is issued under Rule 16 for recovery of drawback, the proposal for imposition of penalties under different sections and provisions also should fail. (iv) Section 113 & Section 114 are independent of any action under Rule 16 of the Drawback Rules, 1995. Penalties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that Tribunal has not given due regard to the law laid down by the Apex Court and deference to Supreme Court s judgment is constitutional principle and the Tribunal s Members were bound by rigorous/strict adherence to judicial discipline. CESTAT cannot refuse to apply such Supreme Court decision on grounds that it came after issuance of show cause notice or after passing the impugned orders or on the ground that issue of jurisdiction was not raised before adjudicating authority. We also took note of the Tribunal s decision in the case of Nylex Traders v. Commissioner of Customs (Prev.), Mumbai [2011 (274) E.L.T. 71 (Tri.-Mum.)] wherein it was observed that the jurisdictional objection can be raised at a later stage also as it goes to the root of the case. Accordingly, by following the Supreme Court s decision in the case of Sayed Ali, Tribunal struck down the show cause notice issued by Commissioner (Preventive). As such, by applying the ratio of law, declared by the Hon'ble Supreme Court in the case of Syed Ali and subsequently followed by various other High Court, it has to be held that DRI officer was not the proper officer for issuance of show cause notice for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellants herein proposing imposition of penalty under the Customs Act will also fail. 6. The issue whether SCNs issued by DRI for recovery of drawback under Rule 16 & 16A of the Drawback Rules is valid or not is decided by the Tribunal. On this score, we have no reason to deviate from the decision of the Tribunal in Mante International case cited by the appellant. 7. The issue to be adjudged in these batch of appeals is in a very narrow compass, i.e., when the recovery of allegedly fraudulently availed drawback amounts cannot sustain, on account of the show cause notices having been issued apparently without jurisdiction, whether penalties imposed on the Custom House Agents, Steamer Agents etc. who are co-noticees, can sustain nonetheless. 8.1. Now, the question that comes up for decision is whether for the same reasons, the SCNs will also be rendered invalid for noticees other than the exporters, like appellants herein (CHAs, shipping lines etc.). Revenue has argued that the proposal for imposition of penalty on the appellants herein has been made under Section 114 & 117 of the Customs Act, hence proposed demand of drawback under Rule 16/16A of the Drawback Rules, even if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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