At, Customs Excise Service Tax Appellate Tribunal Principal Bench New Delhi
By, THE HONORABLE JUSTICE: DR. SATISH CHANDRA
By, PRESIDENT AND THE HONORABLE JUSTICE: B. RAVICHANDRAN
For Petitioner: Sagar Rohatgi, Advocate And For Respondents: R.K. Manjhi, Authorized Representative (DR)
1. The present appeals have been filed by the appellant against the order No. 16/2011 dated 26/03/2011 and No. 11/2012 dated 30/04/2012
2. Heard. Both parties have agreed that in the instant case, the show cause notice was issued by the Directorate of Revenue Intelligence (DRI) who is not a competent authority as per the ratio laid down by Hon'ble High Court of Delhi in the case of Mangali Impex Ltd. Vs. UOI dated 03/05/2016.
3. The Tribunal in the recent past in all these type of cases set aside the orders of lower authority and remanded the issue for fresh decision. The common observation is on the following lines:
"From the record, it appears that the preliminary issue emerges in the present appeals are regarding the jurisdiction of the DRI Officers to issue the show cause notice under the Customs Act. In terms of the Hon'ble Apex Court decision in the case of Commissioner of Customs vs. Sayed Ali : 2011 (265) 17 (S.C.)], the DRI officers were not proper officers in terms of Section 2(34) of the Customs Act, 1962.
2. 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.
3. 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.
4. 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.
5. 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 Ltd. vs. Union of India [2016 (335) E.L.T. 605 (Del.)], 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 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.
6. 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) E.L.T. 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 [2017 (345) E.L.T. 161 (AP)], taking a view contrary to the one taken by the Hon'ble Delhi High Court.
7. 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)].
8. 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 Ltd. Vs. UOI which is stayed by the Hon'ble Supreme Court reported as 2016 (339) E.L.T. 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 Ltd."
9. 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 origi
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nal adjudicating authority to first decide the issue of jurisdiction after the availability of Hon'ble Supreme Court decision in the case of Mangali Impex Ltd. 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". 4. In the result, appeals filed by the appellants are allowed by way of remand. Both parties agreed to the said course of action. Miscellaneous applications are also disposed of.