1. This proceeding was initiated pursuant to the show cause notice issued by the SIIB Officer on 04.05.2010.
2. In this connection, we are informed that the Jurisdiction of the D.R.I./SIIB Officers to act as 'proper officer' for demand proceedings under the Customs Act, 1962 has been a subject matter of dispute before the High Courts. It has been ruled by Hon'ble Delhi High Court in the case of Mangli Implex v. Union of India : 2016 (335) E.L.T. 605 (Del.) that the D.R.I. Officers are not competent to issue the show cause notice for the period prior to 08.04.2011. In similar such cases, various Benches of the Tribunal such as, Delhi, Chennai & Calcutta have set aside the impugned orders and remanded the matter to the original authority for deciding the issue of jurisdiction and thereafter to decide on the merits of the case, upon pronouncement of the judgement, the Hon'ble Supreme Court in the case of Mangli Impex (Supra). For case of reference, the relevant portion in the decision of the Tribunal in the case of M/s. HR Electronics v. Commissioner of Customs, New Delhi (I and G) reported in 2017-TIOL-2328-CESTAT-DEL are extracted herein below:-
"5. From the record, it appears that the preliminary issue emerges in the present appeal is regarding the jurisdiction of the DRI Officers to issue the show cause notice under the Customs Act. The assessee-Appellant had taken a stand that in terms of the Hon'ble Apex Court decision in the case of Commissioner of Customs v. Sayed Ali : 2011 (265) 17 (SC)] : 2011-TIOL-20-SC-CUS, 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 Hon'ble 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 (supra), Notification No. 44/2011-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 16.9.2011, 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 v. Union of India [2016 335 ELT 605 Del] : 2016-TIOL-877-HC-DEL-CUS, and the High Court inter alia, held that even the new inserted section 28 (11) does not empower either the officers of DRI or the DGCEI to issue the SCN 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 v. Union of India [2015 (315) ELT 167 (Bom) : 2014-TIOL-1949-HC-MUM-CUS as also of the Hon'ble High Court of Telangana and Andhra Pradesh in the case of Vuppalamritha Magnetic Components Ltd. v. DRI (Zonal Unit), Chennai [ 2017 (345) ELT 161 AP] : 2016-TIOL-2789-HC-AP-CUS, 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 sub judice 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 v. 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 Mangli Impex v. 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 Mangli Impex Ltd."
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 Mangli 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."
3. The Tribunal in Supro Overseas Pvt. Ltd. & Ors. - 2017-TIOL-2619-CESTAT-MUM observed as below:-
"3. In view of the rival submissions as above and also the Tribunal having taken a view that the appeal should go back to the adjudicating authority till the decision of the apex court, it is proper to send back all the appeals to the adjudicating authority who shall pass appropriate order on the basis of outcome of the apex court judgement in Mangali Impex Case which has been admitted in Civil Appeal No. 20453 of 2016 as reported in 2016 (339) ELT A49 (SC), granting reasonable opportunity of hearing to both the sides. We may state that when an appeal is adm
Please Login To View The Full Judgment!
itted by apex court whether the order appealed is stayed or not makes no difference to law since the order appealed is under challenge and the Tribunal should not overreach the jurisdiction of the apex Court as has been held by the apex court in Union of India v. West Coast Paper Mills Ltd : 2004 (164) ELT 375 (SC) : 2004-TIOL-14-SC-LMT-LB." 4. In line with the above observations of the Tribunal, we set aside the impugned order and remand the matter to the Original Authority for deciding the issue involved in the present appeal. Status quo shall be maintained in the interim period. 5. In the result, the appeals filed by the Department is allowed by way of remand.