Dismissed

Cce and St JAIPUR-1 Commissioner of Custom v. Sh Naresh Moolrajani

Rajasthan HC8 Aug 2018CUSTA/80/2018

Case brief

AI extract

What is this about?

The High Court dismissed the custom appeal, holding that no substantial question of law arose. The court ruled that the jurisdiction issue remained pending before the Supreme Court following Mangali Impex, so the Tribunal's remand order to the adjudicating authority was proper.

What did the court decide?

Founding that no substantial question of law arises, appeal dismissed and stay application disposed of.

Cce and St JAIPUR-1 Commissioner of Custom… — Civil Procedure and Limitation | Rajasthan HC (2018)

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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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D.B. Custom Appeal No. 80/2018

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Cce And St -Jaipur-I, Commissioner Of Customs Preventive, Jodhpur , Ncr Building, Statue Circle, C-Scheme, Jaipur Raj.302005

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Versus

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Sh. Naresh Moolrajani, Rochees Time Pvt. Ltd. , B-6-B, Rochees Mansion, Kanwar Nagar, Jaipur Rajasthan

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----Respondent

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For Appellant(s) : Mr. Sandeep Pathak For Respondent(s) :

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HON'BLE MR. JUSTICE KALPESH SATYENDRA JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS

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Judgment

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08/08/2018

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Delay in filing the appeal is condoned. The applications u/s 5 of the Limitation Act is allowed.

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By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has remitted back the matter.

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Counsel for the appellant has framed following question of law:-

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“Whether the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) was justified and correct in law in passing an order or remand to the original adjudicating authority to first decide the issue of jurisdiction, after passing the stay order wherein operation of the Order passed by Hon’ble Delhi High Court was stayed by the Hon’ble Supreme Court in Civil Appeal preferred against

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(2 of 5)

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[CUSTA-80/2018]

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the decision of Delhi High Court in Mangli Impex Ltd. vs. Union of India 2016 (335) ELT 605 (Del.)”

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Counsel for the appellant contended that the decision in the case of Mangli Impex Ltd. vs. Union of India; (2016) 335 E.L.T. 605 (Del.) ought not to have been relied upon by the Tribunal inasmuch the Supreme Court in SLP (Civil) No. 20453/2016 vide order dated 1^st August, 2016 has stayed the operation said order.

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He has also relied upon the decision of Division Bench of Delhi High Court in case of Vipul Overseas Pvt. Ltd. vs. Commissioner of Customs & Ors., CUSAA 57/2017 decided on 20^th November, 2017.

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In that view of the matter, he contended that the view taken by the Tribunal is required to be reversed and the matters be to be admitted on the substantial questions of law framed above.

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Counsel for the respondent has strongly relied upon the decision of 4^th July, 2018, wherein while considering the identical issue, the Karnataka High Court in case of Deepak M. Ganeyan vs. The Commissioner of Customs and Service Tax, Bangalore has observed as under:-

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“6. The Hon'ble High Courts of Mumbai, Telangana and Andhra Pradesh, however took a different view of the matter as noted by the learned Tribunal. The relevant portion of the observations of the learned Tribunal are quoted before for ready reference: "3. From the record, it appears that a preliminary issue which emerges in the present appeal is regarding the jurisdiction of the DRI officers to issue show-cause notice under the Customs Act. The Apex Court in its decision in the case of CC Vs. Sayed Ali [2011 (265) 17 (SC)] held that DRI officers were not proper officers in terms of Section 2(34) of the Customs, Act, 1962.

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It is also seen that after the declaration of law by the Hon'ble Supreme Court in the above mentioned case, the provisions of Section 28 of the Customs Act, 1962 were amended with effect from 08/04/2011 vide Finance Act, 2011.

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(3 of 5)

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[CUSTA-80/2018]

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It is also noticed that in order to overcome the situation created by the judgment of the Hon'ble Supreme Court in the case of Sayed Ali (supra), Notification No. 44/2011-Cus (NT) : MANU/CUSN/0099/2011, dt. 06/07/2011 was issued by the CBEC, assigning the functions of the proper officer to various officers (including Additional Director General, DRI) mentioned in the notification for the purposes of Section 28 of the Act. Thus w.e.f. 06/07/2011, the Additional Director General, DRI was prospectively appointed as 'proper officer' for the purpose of Section 28 of the Customs Act. Hence from 06/07/2011, ADG-DRI has been empowered to issue demand notice under Section 28.

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Subsequently, sub-section (11) was inserted under Section 28 of the Customs (Amendment and Validation) Act, 2011 dt. 16/09/2011, assigning the functions of proper officers to various DRI officers with retrospective effect.

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Later on, i.e. for the period subsequent to the amendment, the issue of DRI officers having the proper jurisdiction to issue the SCN came up before the Hon'ble Delhi High Court in the case of Mangali Impex Vs. UOI [MANU/DE/1027/2016 : 2016 (335) ELT 605 (Del.)], inter alia, laying down that even a new inserted Section 28(11) does not empower either the officers of DRI or the DGCEI to adjudicate the SCN issued by them for the period prior to 08/04/2011. Thus it is seen that the said order of the Hon'ble Delhi High Court is in favour of the assessee and against the Revenue. However, the said decision of the Hon'ble Delhi High court stand stayed by the Hon'ble Supreme Court reported as 2016 (339) ELT A 49 (SC).

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However, it is further noticed that the said issue was also the subject matter of Hon'ble Mumbai High Court in the case of Sunil Gupta Vs. UOI [MANU/MH/2029/2014 : 2015 (315) ELT 167 (Bom.)] as also of the Hon'ble High Court of Telangana and Andhra Pradesh in the case of Vuppalamritha Magnetic Components Ltd. Vs. DRI (Zonal Unit), Chennai [MANU/AP/0807/2016 : 2017 (345) ELT 161 (AP)] taking a view contrary to the one taken by the Hon'ble Delhi High Court.

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The above developments show that there are two views holding the field and the matter now stand before the Hon'ble Supreme Court. In an earlier case, the Hon'ble Supreme Court in the case of Chandna Impex Vs. CC, Delhi [MANU/SC/0740/2011 : 2012 (26) STR 257 (SC)] had remanded the matter to the

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(4 of 5)

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[CUSTA-80/2018]

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Tribunal with a direction to examine the issue of jurisdiction afresh in the light of decision in Sayed Ali (supra). As already observed the entire issue is once again before the Hon'ble Apex Court, in view of the contrary decision of various High Courts. In these circumstances, I deem it fit to set aside the impugned order and remand the matter to the original adjudicating authority to first decide the issue of jurisdiction, after the availability of Supreme Court decision in the case of Mangali Impex (supra) and then decide the merits of the case."

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Thus, with the aforesaid observations, the learned Tribunal has remanded back the case to the original adjudicating Authority to first decide the question on jurisdiction. However, the said question can be decided by the learned Adjudicating Authority only after the Hon'ble Supreme Court decides the case of Mangali Impex Ltd. (supra) arising from the Judgment of the Delhi High Court reported in 2016 (339) ELT A.49 (SC). The matter is thus, at this stage, pending before the said adjudicating Authority in which even the question of jurisdiction of the DRI officers or the original adjudicating Authority is yet to be decided by the Hon'ble Supreme Court. The matter is, thus still pending before the original adjudicating Authority only.

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Learned counsel for the appellant, however, urged before us that in these circumstances, the learned CESTAT should not have and could not have remanded the case back to the adjudicating Authority, who, ultimately may not have the jurisdiction to decide these proceedings at all and it would depend upon the Judgment of the Hon'ble Supreme Court and therefore, a substantial question of law arises for consideration by this Court.

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Having heard the learned counsel for the appellant, We are satisfied that no substantial question of law arises in the present case requiring our further consideration. The question of jurisdiction is obviously pending consideration before the Hon'ble Supreme Court of India and the law laid down by the Hon'ble Supreme Court is bound to be final and binding on all the Authorities and the Tribunal below. Therefore, since the present nature of the case as to which authority will have jurisdiction to decide the matter of the appellant and other persons mentioned in the show cause notice, will depend upon the Judgment of the Hon'ble Supreme Court, this matter need not be kept pending here on our Board and in our considered view no substantial question of law arises for consideration in this appeal. The proceedings before the concerned Authority who will

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(5 of 5)

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[CUSTA-80/2018]

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be the 'proper authority' held so, by the Hon'ble Supreme Court will get seized of the matter and the contentions now raised before us can be raised before the said Authority.”

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We have heard counsel for the appellant.

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In our considered opinion, since the issue is pending before the Supreme Court against both the judgments of Bombay High Court as well as Delhi High Court and the view taken by the another Division Bench, the decision of the Tribunal is proper inasmuch as merely because the judgment is stayed, the other Division Bench cannot take a contrary view.

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In that view of the matter, we are inclined to follow the practice adopted by the Karnataka High Court in the aforesaid decision.

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In view of the above, no substantial question of law arises. Hence, the appeal stands dismissed.

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The stay application stands disposed of.

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(VIJAY KUMAR VYAS),J (K.S.JHAVERI),J

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A.Sharma/36

Cce and St JAIPUR-1 Commissioner of Custom v. Sh Naresh Moolrajani

Case brief

What is this about?

What did the court decide?

Cce and St JAIPUR-1 Commissioner of Custom v. Sh Naresh Moolrajani

Case brief

What is this about?

What did the court decide?

What the court decided

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