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TMI Blog2007 (4) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Customs Act, 1962 ("the Act" for short) for violation of Sections 58,59,68,71 and 72 of the Act and called upon to show cause as to why a duty in the sum of Rs. 84,76,688/- with interest thereon together with penalty of Rs. 10,60,000/- should not be demanded from it. 5. The show cause notices were received by the petitioner-company. The show cause notices are based on the allegations that while checking the "Input output Ratio", the Revenue Authorities discovered that there was a systematic; meticulous and wilful evasion of duty by the petitioner-company. According to the Revenue, the petitioner company had inflated the quantity of raw material required for production of the finished products such as Erythromycin; Raxythromycin and Erythromycin Azithromycin. That after utilising the actual quantity of raw materials and final products, the remaining quantity was utilized in the account of the petitioner company under the pretext of job work done by the petitioner-company. It is further alleged that having taken advantage of the so called Job Work System, the petitioner had started clearing the in-bound materials, without payment of customs duty for the manufacture of the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be dismissed by the learned Single Judge holding that the Madras High Court had no territorial jurisdiction to entertain and try the writ petition since the order was passed by the Settlement Commission, Mumbai. 13. In the appeal filed by the Revenue dismissal order came to be set aside. The said writ petition was restored and remanded to the learned Single Judge for hearing on merits; observing as under :- "In the present case, the appellant has alleged that the entire occurrence of the offence was committed within the jurisdiction of the Settlement Commission, Additional Bench, Chennai and out of 13 applicants, 8 applicants are working in the fifth respondent's factory at Sathamai Village, within the jurisdiction of the Settlement Commission, Chennai and the show cause notice, which was the basis for filing the application, was also issued at Chennai. The private bonded warehouse,from where the respondents are alleged to have acquired the raw materials without payment of duty, is also located at Maduranthagam. The surprise investigation, the recovery of incriminating documents and records have also taken place within the jurisdiction of this Court. All the other events spelt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which one of us (Daga, J.) is a party. 20. Per contra, Mr. Desai, learned Senior Counsel, appearing for the Revenue urged that the writ petition bearing No. 2464/2005 filed against the Interim Order passed by the Respondent No. 3 (Settlement Commissioner), who is located at Mumbai, was filed by the respondent No. 2 in the High Court at Madras, which was originally dismissed by the learned Single Judge holding it to be not maintainable before it. However, the Division Bench of the said Court has set aside the said order of the learned Single Judge in appeal filed by the Commissioner of Central Excise, Pondicherry against Sun Pharmaceuticals Ind. Ltd., (present petitioner), reported in 2006 (202) E.L.T. 233 (Mad.); holding that the Madras High Court has jurisdiction to entertain and try writ petition filed against the order of the respondent No. 3. The said judgment has been accepted by the petitioner. As such, Mr. Desai submits that the petitioner should be directed to approach the Madras High Court. 21. Mr. Desai further submits that considering the entire occurrence of the offence committed, the intrinsic cause of action is within the jurisdiction of the Madras High Court. He h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission at Mumbai; and admitted duty liability was deposited with it. Later on the proceedings were transferred to the Principal Bench of the Settlement Commission at Delhi. The settlement applications were disposed of by the final orders passed by the Principal Bench of the Settlement Commission located at Delhi. The said orders were sought to be impugned by filing writ petitions before the High Court of Delhi; wherein the question came up for consideration, whether it would be appropriate for the said High Court to exercise territorial jurisdiction in the matter. 26. It was sought to be argued on behalf of the petitioners, to persuade the Delhi High Court to exercise it's writ jurisdiction, that the principal Bench of the Settlement Commission, who had passed orders, was located at Delhi i.e. within the territorial jurisdiction of the said High Court, as such it had a jurisdiction to entertain and try the writ petition; notwithstanding the petitioners themselves were located in the State of Goa and show cause notices were issued by the Commission or of Customs having its office at Goa. 27. Dealing with the aforesaid contention, the High Court at Delhi relying on the para 27 of j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt. It does not logically follow, however, that if the cause of action, wholly or in part, arises within the territories over which that High Court holds sway, it must exercise that power rather than directing the petitioner to seek his remedy in any other High Court which is better suited to exercise jurisdiction for the reason that the predominant, substantial or significant part of the cause of action arises in that Court. In other words, any High Court is justified in exercising powers under Article 226 either if the person, Authority or Government is located within its territories or if the substantial and a significant part of the cause of action has arisen within its territories. The rationale of Section 20 of the Code of Civil Procedure would, therefore, also apply to Article 226(2). A part of the cause of action would indubitably arise at the place where a person receives an adverse order, under the ordinary principles of law. Accordingly, since I am of the opinion that the substantial or significant part of the cause of action has arisen in Uttar Pradesh, merely because the final say is that of the Central Government, Article 226(2) does not require this Court to exerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - whether decree or order under appeal set aside or modified or simply confirmed, it is the decree or order of the superior court, Tribunal or Authority which is the final, binding and operative decree or order; wherein merges the decree or order passed by the Court, Tribunal or Authority below. Thus, invoking the doctrine of merger, the view was taken that the substantial cause of action giving rise to the proceedings was based on the order of the Tribunal located at Mumbai. The ultimate adverse order affecting the revenue was that of the Tribunal located at Mumbai. In this view of the matter, the observations were made observing that if two courts have jurisdiction, then it is for the suitor to choose forum. The issue involved in this petition was not involved in the above case. 32. In the case on hand, the doctrine of merger is not applicable. The order passed by the Authority below did not merge into the order of the Settlement Commission. The order of Settlement Commission can neither be said to be an order in appeal or revision. The Settlement Commission is altogether a different special forum created under the Act for settlement of the disputes. If the settlement is not acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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