Mahindra And Mahindra Ltd. vs C.C. New Delhi (Air Cargo Export)

The present appeals have been filed by the appellant against the order Nos. 49/2013 dated 06.09.2013.

None appeared for the appellant. There is a request on record to decide the appellant’s case on merit. We note that the notice in the present

case was issued by DRI.

On the other hand, ld. Counsel for the Department has justified the notice issued by DRI and made a request to decide the matter on merit.

We have heard Ld. DR at length and gone through the material available on record. We note that similar issue has come up before this Tribunal on

many earlier occasions also. The Tribunal remanded the cases to the original adjudicating authority. The final order of Tribunal in a recent case 53877-

53880 /2017 is as below:

“6.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 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.

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.

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 Acts. Hence, from 06.07.2011 ADG-DRI has been empowered to issue demand notice under Section 28.

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.

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 come 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 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.

However, it is further noticed that the said issue was also the subject matter of Hon’ble Bombay 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 Ltd. 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.

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-TIOL173-SC-CUS/ 2016 (339) ELT A49 (SC)].

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 Mangli Impex vs. UoI which is stayed by the Hon’ble Supreme Court reported as 2016 (339)

ELT A49 (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.â€​

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.â€​

Following the above line of decision, we set aside the impugned order and remand the matter to the original authority for a fresh decision.

(Dictated and pronounced in the open court)