Custom, Excise & Service Tax Tribunal
M/S Shree Krishna Timber Co. (P) Ltd vs Cc (Port), Kolkata on 21 August, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL KOLKATA Customs Appeal Nos. 356, 312, 355 & 330 of 2009 with Customs Misc. Application Nos. 75750-75753 of 2016 (Arising out of Order-in-Original Nos. KOL/CUS/PORT/29/09 dated 31.03.2007 & 2009 (Shree Krishna Timber & Shree Anand Kr. Singh), KOL/CUS/PORT/31/09 dated 31.03.2007 & 31.03.2009 (Singh Brothers Exim Pvt. Ltd. & Shri Anand Kumar Singh) passed by the Commissioner of Customs (Port), Kolkata) DATE OF HEARING : 21.08.2017 DATE OF DECISION : 21.08.2017 M/s Shree Krishna Timber Co. (P) Ltd. . Appellants Shri Anand Kumar Singh (Rep by Sh. Pradip Kr. Tarafdar M/s Singh Brothers Exim Pvt. Ltd. Sh. Souran Sengupta & Adv.) VERSUS CC (Port), Kolkata . Respondent
(Rep. by Sh. S.N. Mitra, DR) CORAM : HONBLE MR. JUSTICE (DR.) SATISH CHANDRA, PRESIDENT HONBLE MR. V. PADMANABHAN, MEMBER (TECHNICAL) FINAL ORDER NO. 76580-83/2017 & Misc. Order No. 75286-89/2017 PER JUSTICE Dr. SATISH CHANDRA :
By the present Misc. Applications for Restoration of Appeals, the assessee-Appellants pray that the Tribunals Final Order No. 76080-76083/2016 dated 22.09.2016 may kindly be recalled vide which the appeals were dismissed ex parte for non-prosecution.
2. After hearing Shri Pradip Kumar Tarafdar, learned counsel for the assessee-Appellants and Shri S.N. Mitra, learned DR for the Revenue, we recall our earlier order dated 22.09.2016 for the reasons mentioned in the RoA and restore the appeals to their original numbers.
3. With the consent of both the sides, we have heard the appeals on merit.
4. During the course of hearing, both the sides have agreed that the notice has been issued by the SIIB/DRI which resulted in the impugned orders. According to both the parties, the SIIB/DRI is not a competent authority as per the ratio laid down by the Honble Delhi High Court in the case of Mangali Impex Ltd. Vs UOI dated 03.05.2016. Presently, the matter is sub judice before the Honble Supreme Court.
5. In this connection, we note that similar issues have been dealt with in various cases by the Tribunal recently. The decision of the Tribunal in one such case vide Final Order No. 53941-53942 of 2017 dated 12/06/2017 is reproduced below :
During the course of arguments, the appellants counsel has raised the preliminary plea that the show cause notice in the instant case was issued by the Directorate of Revenue Intelligence (DRI). The Honble High Court of Delhi in the case of Mangali Impex Ltd. Vs. UOI dated 03.05.2016 has observed that the DRI is not competent to issue the show cause notices. Hence, the request is being made to set aside the present proceedings where the notice was issued by the DRI.
2. On the other hand, learned Counsel for the Department has justified the notice issued by DRI and made a request to decide the matter on merit.
3. We have heard both the parties at length and gone through the material available on record.
4. 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 Honble 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.
5. It is also seen that after the declaration of law by the Honble 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.
6. It is also noticed that in order to overcome the situation created by the judgment of Honble 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.
7. 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.
8. 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 Honble 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 Honble Delhi High Court is in favour of the assessee and against the Revenue.
9. However, it is further noticed that the said issue was also the subject matter of Honble Mumbai High Court in the case of Sunil Gupta vs. Union of India [2015 (315) E.L.T. 167 (Bom) as also of the Honble 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 Honble Delhi High Court.
10. Being conflicting decisions of various High Courts (Supra), finally the matter reached to Honble 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 Honble Supreme Court [2016-TIOL-173-SC-CUS / 2016 (339) ELT A 49 (SC)].
11. It may be mentioned that recently, the Honble 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 Honble High Court of Delhi has considered the judgment in the case of Mangali Impex Ltd. Vs. UOI which is stayed by the Honble Supreme Court reported as 2016 (339) E.L.T. A 49 (SC). Finally the Honble 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.
12. By following the ratio laid down by the Honble 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 Honble 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.
13. In the result, appeals filed by the assessee are allowed by way of remand.
6. In line with the above decision of the Tribunal, we remand the matters for fresh decision and both sides have agreed to it.
7. In the result, misc. applications and appeals stand disposed of accordingly.
(Dictated & pronounced in the open court) (V. PADMANABHAN) MEMBER (TECHNICAL) (JUSTICE (Dr.) SATISH CHANDRA) PRESIDENT Golay 1 A.No. C/356/09 & ORS