Madras High Court
The Principal Commissioner Of ... vs M/S.Iti Ltd on 26 April, 2022
C.M.A.Nos.1628 of 2018 etc. batch
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 26.04.2022
CORAM :
THE HON'BLE Mr. JUSTICE R.MAHADEVAN
AND
THE HON'BLE MR. JUSTICE J.SATHYA NARAYANA PRASAD
C.M.A.Nos. 1628, 1632, 1629, 1631, 1630 & 2050 of 2018
and
C.M.A.Nos.1968, 1970, 2019, 2025, 2027, 2020, 2021, 2022, 2048,
2049, 2076 & 2080 of 2019
and
C.M.P.Nos.12932, 12931, 12927, 12929, 12930 & 12928 of 2018
and C.M.P.Nos.6980 & 7708 of 2019
C.M.A.No.1628 of 2018
The Principal Commissioner of Customs,
Chennai VII Commissionerate,
Air Cargo Complex,
Meenambakkam,
Chennai - 600 027. … Appellant
Vs.
M/s.ITI Ltd,
Doorvani Nagar,
Bangalore - 560 008. . . . Respondent
Prayer in C.M.A.No.1628 of 2018: Civil Miscellaneous Appeal has
been filed under Section 130 of Customs Act, 1962 against the common
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C.M.A.Nos.1628 of 2018 etc. batch
order dated 14.07.2017 passed by the Customs, Excise and Service Tax
Appellate Tribunal, South Zonal Bench, Chennai, in Final Order
No.41240 of 2017.
For Appellant : Mr.A.P.Srinivas
Senior Standing Counsel in all CMAs
COMMON JUDGMENT
(Judgment of the court was delivered by R.MAHADEVAN, J.)
The appellant has come up with these Civil Miscellaneous
Appeals against the orders passed by the Customs, Excise and Service
Tax Appellate Tribunal (CESTAT), in and by which, the appeals filed by
the respondent(s)/assessee(s) were allowed by way of remand, after
following the decision of the Delhi High Court in the case of BSNL v.
Union of India in WP.No.C/4438/2017 and CM No.19387/2017. For
better understanding, the relevant passage of the order dated 01.02.2018
passed by the CESTAT, impugned in the first case viz., CMA.No.1628
of 2018, is extracted below:
"5. From the record, it appears that the
preliminary issue which emerges in the present appeals
is regarding the jurisdiction of the DRI officers to issue
notice under the Customs Act. The assessee-Respondent
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C.M.A.Nos.1628 of 2018 etc. batch
had taken a stand that in terms of the Hon'ble Apex
Court decision in the case of Commissioner of Customs
vs. Sayed Ali, 2011 (265) 17 (SC), the DRI officers were
not proper officers in terms of Section 2 (34) of the
Customs Act, 1962.
6. It is also seen that after the declaration of law
by the Honourable Supreme Court (Supra) the
provisions of Section 28 of the Customs Act, 1962 were
amended with effect from 08.04.2011 vide Finance Act,
2011.
7. It is also noticed that in order to overcome the
situation created by the judgment of Hon'ble Supreme
Court in the case of Sayed Ali (surpa), notification
No.4/2011-Cus (NT), dated July 6, 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. July 6,
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.
8. Subsequently, sub-section 11 was inserted
under section 28 of the Customs (Amendment and
Validation) Act, 2011 dated 16.09.2011, assigning the
functions of proper officers to various DRI officers with
retrospective effect.
9. Later on, i.e., for the period subsequent to the
amendment, the matter i.e., the DRI officers having the
proper jurisdiction to issue the SCN or not had came up
before the Hon'ble Delhi High Court in the case of
Mangali Impex vs. Union of India (2016 335 ELT 605
Del), and the High Court inter alia, held that even the
new inserted Section 28 (11) does not empower either
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C.M.A.Nos.1628 of 2018 etc. batch
the officers of DRI or the DGCEI to issue the SCN or
adjudicate for the period prior to 8.4.11. 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.
10. 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. Union of
India (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
Limited vs. DRI (Zonal Unit), Chennai (2017 (345)
ELT 161 AP) taking a view contrary to the one taken by
the Hon'ble Delhi High Court.
11. Being conflicting decisions of various High
Courts (supra), finally the matter reached to Hon'ble
Supreme Court who on 07.10.2016 granted the stay of
operation of the judgment passed by the High Court of
Delhi. Thus, the issue is subjudice before the Hon'ble
Supreme Court (2016-TIOL-173-SC-CUS/2016 (339)
ELT A 49 (SC).
12. It may be mentioned that recently, the Hon'ble
High Court of Delhi in the case of BSNL vs. UOI vide
Writ Petition No.C/4438/2017 and CM No. 19387/2017
has dealt with the identical issue where the notice was
also issued by DRI. The Hon'ble High Court of Delhi
has considered the judgment in the case of Mangali
Impex vs. UOI which is stayed by the Hon'ble Supreme
Court reported as 2016 (339) ELT A 49 (SC). Finally,
the Hon'ble High Court has granted liberty to the
petitioner by observing that "petitioner is permitted to
review the challenge depending on the outcome of the
appeals filed by the UOI in the Supreme Court against
the judgment of the Court in the case of Mangali Impex
Limited."
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C.M.A.Nos.1628 of 2018 etc. batch
13. By following the ratio laid down by the
Hon'ble High Court of Delhi in the case of BSNL
(supra) as well as by considering totality of facts and
circumstances, we 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 Hon'ble Supreme Court decision in the
case of Mangali Impex and then on merits of the case
but by providing an opportunity to the assessee of being
heard. Till the final decision, the Status quo will be
maintained.
14. In the result, the appeals are allowed by way
of remand."
2.Now, the common issues involved in all the appeals are as
follows:
"(i) When jurisdictional High Court Judgments are
available upholding the competency of the DRI to issue
show cause notice under Section 28 of the Customs Act
1962, whether the CESTAT is correct in remanding the
appeal.
(ii) Whether Tribunal is empowered to remand the
case without deciding the issues raised therein on the
ground that jurisdiction of the officer to issue show cause
notice is under dispute."
3.Heard both sides and perused the materials placed before this
court.
4.Earlier, the issues involved herein have been considered and
decided by a Co-ordinate Bench of this Court, in the case of
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C.M.A.Nos.1628 of 2018 etc. batch
The Commissioner of Customs v. M/s. Box Corrugators and Offset
Printers, [2020 (5) TMI 475(Mds)], wherein, it was held as under:
"2.Since the issue relating to jurisdiction of DRI
officials to issue show cause notice to the Assessee in
such cases is said to be pending before the Hon'ble
Supreme Court in the case of Mangali Impex vs. Union
of India, in which the Hon'ble Supreme Court has
granted stay order, as reported in 2016(335) ELT 605
(Del.)], and the said Special Leave Petition is stated to be
pending before the Hon'ble Supreme Court; that status
having been checked up by us on the official website of
the Hon'ble Supreme Court today and further, in view of
the fact that the learned Tribunal has clearly protected
the interest of both the Revenue as well as the Assessee by
directing the Assessing Authority to keep the matter
pending and maintain status quo till the Hon'ble Supreme
Court decides the appeal of the Revenue in the case of
Mangali Impex, filed against the decision of the Delhi
High Court, we do not find any reason to interfere with
the decision of the Tribunal, as in our opinion, no
question of law arises for consideration in this appeal.
Accordingly, we dispose of the appeal, with no order as to
costs."
5.However, in the subsequent decision in the case of
Commissioner of Customs, Tuticorin v. Sanket Praful Tolia, decided
on 04.06.2021 in CMA.(MD)Nos.433 to 437 & 439 to 455 of 2021,
wherein, the orders impugned are identical to that of the present cases, it
was held by this court as follows:
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C.M.A.Nos.1628 of 2018 etc. batch
"5. The Revenue is before us contending that the
Tribunal ought not to have remanded the matter to the
adjudicating Authority and it should have taken a decision
on the merits of the matter. The Revenue would further
contend that Section 28(11) of the Act envisages that all
persons appointed as officers of Customs under sub-
section (1) of Section 4 of the Act before the sixth day of
July, 2011 shall be deemed to have and always had the
power of assessment under Section 17 of the Act and shall
be deemed to have been and always had been the proper
officers for the purpose of the said Section. In our view,
this question cannot be decided at this juncture as the
same is now pending before the Hon'ble Supreme Court.
However, we do not agree with the order passed by the
Tribunal in setting aside the order passed by the Appellate
Authority and remanding the matter to the Adjudicating
Authority.
6. In the case of the Commissioner of Customs,
Tuticorin v. The Customs, Excise & Service Tax Appellate
Tribunal and others [CMA.(MD)Nos.375 to 379 of 2018]
[2019 (31) G.S.T.L.33 (Mad.)], a Division Bench of this
Court, to which one of us (T.S.Sivagnanam, J.) was a
party, had an occasion to test the correctness of an
identical order passed by the Tribunal and by a common
Judgment, dated 4-10-2019, set aside the order of the
Tribunal and restored the appeals to the file of the
Tribunal to be kept pending and await the decision of the
Hon'ble Supreme Court. It was also made clear that the
appellant - Department shall not initiate any coercive
action against the respondents/assessees. The operative
portion of the said Judgment reads as follows:
"3. In these appeals, the Revenue has
raised the following substantial questions of
law,
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C.M.A.Nos.1628 of 2018 etc. batch
(i) as to whether the Tribunal was right in
allowing the appeals on the ground that the
jurisdiction issue has to be decided by the
Hon'ble Supreme Court in the appeal filed
against the decision of the High Court of Delhi,
in the case of Mangali Impex vs. Union of
India reported in 2016(335)E.L.T.605(Del.);
(ii) The next question is as to whether the
Tribunal was right in allowing the appeals and
simultaneously directing status quo to be
maintained till a final decision is arrived at.
4. Identical orders were tested for its
correctness in the Principal Bench to which one
of us (T.S.S., J,) is a party. After elaborate
arguments, the Court held that the Tribunal was
not justified in allowing the appeal and
consequently directing status quo till the final
decision of the Hon'ble Supreme Court and the
appropriate procedure that should have been
adopted is to keep the appeals pending and
await the decision of the Hon'ble Supreme Court
in the appeals filed against the decision in
Mangali Impex. Therefore, we are inclined to
take similar view in these appeals as well.
Accordingly, the appeals filed by the Revenue
are allowed and the order passed by the
Tribunal is set aside and the appeals are
restored to file of the Tribunal and the Tribunal
shall keep the appeals pending and await the
decision of the Hon'ble Supreme Court. It is
made clear that the Department shall not initiate
any coercive action against the respondents
assessees and await final decision in the
appeals, which have been restored to file of the
Tribunal. No costs."
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C.M.A.Nos.1628 of 2018 etc. batch
7. We find that the above decision can be fully made
applicable to the facts of the present case as the orders
impugned in these appeals are identical to that of the
orders impugned in CMA.(MD) Nos.375 to 379 of 2018."
6.Following the latest decision in Sanket Praful Tolia's case
(supra), which are squarely covered by the issue involved herein, all
these Civil Miscellaneous Appeals are allowed by setting aside the orders
impugned herein and the matters are remanded to the Tribunal with a
direction to keep the same pending and await the decision of the Hon'ble
Supreme Court in the appeals filed against the decision in Mangali
Impex. However, it is made clear that the appellant shall not initiate any
coercive action against the respondent(s)/assessee(s) and await the final
decision in the appeals, which have been restored to the file of the
Tribunal. Consequently, the substantial questions of law are left open.
No costs. Connected Miscellaneous Petitions are closed.
(R.M.D.,J.) (J.S.N.P.,J.)
26.04.2022
Index : Yes/no
Internet:Yes/no
gba/msr
https://www.mhc.tn.gov.in/judis
C.M.A.Nos.1628 of 2018 etc. batch
R.MAHADEVAN, J.
and
J.SATHYA NARAYANA PRASAD, J.
gba/msr
C.M.A.Nos. 1628, 1632, 1629, 1631,
1630 & 2050 of 2018
and
C.M.A.Nos.1968, 1970, 2019, 2025, 2027,
2020, 2021, 2022, 2048, 2049,
2076 & 2080 of 2019
and
C.M.P.Nos.12932, 12931, 12927, 12929, 12930
& 12928 of 2018
and C.M.P.Nos.6980 & 7708 of 2019
26.04.2022
https://www.mhc.tn.gov.in/judis
