2019 (8) TMI 1889 - HC - Customs

Appeal Quashed; Tribunal Ordered to Reassess Case Independently from Mangli Impex Judgment, Ensuring Fairness.

The HC allowed the appeal, quashed the impugned order, and directed the Tribunal to decide the appeal on its merits independently, without being ... Jurisdiction - power of Directorate of Revenue Intelligence (DRI) to issue show cause notices - amended Section 28 of the Customs Act, 1962 - HELD THAT:- In VIPUL OVERSEAS PVT. LTD. & SHRI SURENDER GARG VERSUS COMMISSIONER OF CUSTOMS & ORS. [2017 (11) TMI 1412 - DELHI HIGH COURT], coordinate Bench noted that the judgment in M/S MANGALI IMPEX LTD., M/S PACE INTERNATIONAL AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2016 (5) TMI 225 - DELHI HIGH COURT] had been stayed by the Supreme Court and the appeal was pending adjudication. The Division Bench disposed of the said appeal by quashing the remand order passed by the Tribunal with a direction that the Tribunal will decide the appeal on merits, including the question of jurisdiction of officers of the DRI to issue show cause notice, uninfluenced by the decision in Mangli Impex. The Tribunal shall apply its mind independently to the question of jurisdiction and decide the appeal on merits including the aspect of imposition of penalty. However, a prior notice shall be issued to the parties before proceeding to hear the matters on merits. Appeal allowed. Issues:1. Competence and jurisdiction of the Directorate of Revenue Intelligence (DRI) to issue show cause notices under the amended Section 28 of the Customs Act, 1962.2. Applicability of the judgment in Mangli Impex Ltd. vs. Union of India.3. Impact of the Supreme Court stay on the judgment in Mangli Impex.4. Consistency and uniformity in deciding appeals pending Supreme Court adjudication.Analysis:1. The main issue in this case revolves around the competence and jurisdiction of the DRI to issue show cause notices under the amended Section 28 of the Customs Act, 1962. The Customs Excise and Service Tax Appellate Tribunal (CESTAT) remanded the matter back to the Commissioner, Customs due to a difference in view on this aspect. A coordinate Bench's decision in Mangli Impex Ltd. vs. Union of India raised doubts on the jurisdiction of the DRI to issue such notices under the recasted Section 28 (11) of the Customs Act, 1962.2. The judgment in Mangli Impex Ltd. vs. Union of India has been a focal point in this case, with a coordinate Bench noting its stay by the Supreme Court and pending appeal adjudication. Another coordinate Bench in Vipul Overseas Pvt. Ltd. Vs. Commissioner of Customs directed the Tribunal to decide appeals on merits, disregarding the influence of the Mangli Impex judgment on the question of jurisdiction of DRI officers to issue show cause notices.3. The impact of the Supreme Court stay on the Mangli Impex judgment was deliberated upon, with arguments presented citing the case of Shree Chamundi Mopeds Ltd. Vs. Church of South India Trust Association, Madras. The contention was whether the Tribunal should wait for the Supreme Court's decision on the appeal in Mangli Impex before deciding appeals on merits.4. In pursuit of consistency and uniformity, the High Court decided to follow the course adopted in Vipul Overseas Pvt. Ltd. case. The Court allowed the appeal, quashed the impugned order, and directed the Tribunal to decide the appeal on merits independently, without being influenced by the Mangli Impex judgment. The Court emphasized issuing prior notice to the parties before proceeding to hear the matters on merits to ensure fairness and procedural adherence.