IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4TH DAY OF DECEMBER, 2019 BEFORE THE HON'BLE MR. JUSTICE ARAVIND KUMAR AND THE HON’BLE MR. JUSTICE SURAJ GOVINDARAJ C.S.T.A. NO.7 OF 2017 BETWEEN:
THE COMMISSIONER OF CUSTOMS AND SERVICE TAX BANGALORE-CUS C.R.BUILDING, QUEENS ROAD P.B. NO.5400 BENGALURU-560001 ... APPELLANT (BY SRI. K.V.ARAVIND, ADVOCATE) AND:
VIJAY SILK HOUSE PVT. LTD., 7/23, GRANTS BUILDING ARTHUR BUNDER ROAD COLABA MUMBAI ... RESPONDENT THIS CSTA IS FILED UNDER SECTION 130 OF THE CUSTOMS ACT, ARISING OUT OF ORDER DATED 24.04.2017 PASSED IN FINAL ORDER NO.20521/2017, PRAYING TO ANSWER THE SUBSTANTIAL QUESTIONS OF LAW FRAMED ABOVE IN FAVOUR OF THE APPELLANT IN THE INTEREST OF JUSTICE AND EQUITY AND SET ASIDE THE IMPUGNED FINAL ORDER NO.20521/2017 DATED 24.04.2017 PASSED BY THE CESTAT, SOUTH ZONAL BENCH, BENGALURU IN THE INTEREST OF JUSTICE AND EQUITY.
THIS CSTA COMING ON FOR ORDERS, THIS DAY, ARAVIND KUMAR, J., DELIVERED THE FOLLOWING:-
JUDGMENT 1. Revenue is in appeal under Section 35G of the Central Excise Act, 1944 calling in question correctness and legality of the Final Order No.20521/2017 passed by Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore whereunder Tribunal has allowed the appeal filed by the assessee and has remanded the matter to the Original Adjudicating Authority with a direction to first decide the issue of jurisdiction after receiving the judgment of the Hon’ble Apex Court which is pending in the case of MANGALI IMPEX VS. UNION OF INDIA reported in [2016 (335) ELT 605 (DEL.)].
2. On intelligence gathered by Directorate of Revenue Intelligence that raw silk of foreign origin was being smuggled into India from Nepal and packed in a such a way that goods tallied with the packing list of a legally imported consignment to conceal the smuggled nature of goods without being caught and one such consignment was being transported from Varanasi to Bangalore under the cover of such bills of entry, which vehicle came to be intercepted and goods carried in the said vehicle came to be seized. After carrying out investigation, show cause notice dated 10.01.2001 proposing confiscation of the seized goods as well as imposition of penalties on respondent was issued to respondent by the Additional Director General, DRI. Said show cause notice came to be adjudicated by the Adjudicating Authority under the Central Excise Act and by order dated 30.10.2001, goods were ordered to be confiscated. Being aggrieved by the same, assessee filed an appeal before Customs, Excise and Service Tax Appellate Tribunal, which was allowed by order dated 29.05.2002 and matter was remanded for fresh adjudication on the ground that there is violation of principles of natural justice. On remand, Adjudicating Authority passed an order afresh on 01.05.2006 (Annexure-A) confiscating the goods which came to be intercepted and seized.
3. Being aggrieved by the aforesaid order, assessee filed an appeal before Customs, Excise and Service Tax Appellate Tribunal in Appeal No.20521/2017. Appellate Tribunal noticed that several High Courts had expressed different views with regard to exercise of jurisdiction by the officials of DRI in issuing show cause notice and it was also noticed that said issue was pending before the Honb’le Apex Court in the matter of MANGALI IMPEX VS. UNION OF INDIA reported in [2016 (335) ELT 605 (DEL.)] and as such, has remanded the matter back to the Adjudicating Authority to decide the issue of jurisdiction at the first instance as it goes to the root of the matter and with a further direction to the Adjudicating Authority to await the decision of the Honb’le Apex Court. Hence, this appeal has been preferred.
4. It is the contention of Sri.K.V.Aravind, learned counsel appearing for appellant that during the pendency of the proceedings, Section 28 of the Customs Act came to be amended and sub-Section (11) came to be inserted by Customs (Amendment and Validation) Act, 2011 dated 16.09.2011 and this fact though noticed by the Tribunal has been ignored and as such, order of remand is liable to be set aside.
5. In the matter of MANGALI IMPEX VS. UNION OF INDIA reported in [2016 (335) ELT 605 (DEL.)], similar issue is being adjudicated and same is at large before the Hon’ble Apex Court wherein the issue relating to the insertion of sub-Section (11) of Section 28 is also under consideration. It is because of this precise reason, Customs, Excise and Service Tax Appellate Tribunal has taken a view that issue of jurisdiction would go to the root of the matter and as such, by setting aside the order passed by the Original Authority has remanded the matter back to the Adjudicating Authority with a direction to adjudicate the issue of jurisdiction at the first instance after receiving the judgment of the Hon’ble Apex Court in MANGALI IMPEX VS. UNION OF INDIA reported in [2016 (335) ELT 605 (DEL.)]. Said order of remand does not suffer from any infirmity and no substantial question of law would arise for our consideration. As such, we are not inclined to admit this appeal. Hence, appeal stands rejected subject to exception carved out in the order of CESTAT.
Sd/- JUDGE Sd/- JUDGE Prs*