Kirit Shrimankar vs. The Commissioner Cgst And Central Excise

According to the writ petitioner, the earlier Circulars of 2016 which thus stand withdrawn, were on the issue of competency of officers of Directorate of Revenue Intelligence, covered by judgment of Delhi High Court in Mangali Impex Ltd. v. Union of India & Others [2016 (335) ELT 605]. The Department's SLP No.20453/2016 is 2 (W.P. No.14380/2018) pending before the Apex Court, wherein in while issuing notice, operation of the said judgment is stayed on 1.08.2016. The petitioner submits that even if a judgment is stayed, the stay shall operate qua the parties thereto, and not qua all others. Thus, irrespective of the stay, the judgment of Delhi High Court is still in force qua all others and thus the adjudication shall be kept in call book and the impugned Circular is thus liable to be set aside.

The claim of the petitioner that therefore several similar cases, where show cause notices have been issued by the DRI Officers, have been placed in call book by various adjudicating authorities all over India and merely because the impugned Circular has been issued, the adjudicating authority in his case is proceeding further to adjudicate the show cause notice issued by ADG, DRI proposing demand of duty from the petitioner.

As per Annexure-P/1, the Circular impugned has been issued pursuant to legal opinion taken from the Solicitor General of India. Even otherwise, when operation of the judgment circumscribing the jurisdiction/competency of a quasi judicial authority is stayed by the Apex Court, there cannot be any option left with the authorities to exercise such jurisdiction and to proceed with adjudication. It appears that merely since issue of competence of officers of Directorate of revenue Intelligence is pending for final order before the Apex Court, to avoid adjudication, the petitioner has challenged the Circular dated 3/01/2017. For every 3 (W.P. No.14380/2018) issue, some or the other case would be pending in High Court or the Hon'ble Supreme Court. The same cannot cause fetter in exercise of quasi judicial or judicial functions of the authorities or lower courts. If merely for this reason the adjudication is kept in call book, there would be grave injustice and the same would be not in public interest. The matters can be kept in call book, if there is specific direction for the same issued in that case by the Superior Courts.

It is not the case of the petitioner that the SLP in Mangilal Impex Ltd.(supra) is already listed for final hearing and, therefore, the adjudicating authority shall await the decisions of the Hon'ble Supreme Court. The Circular do not contain any infirmity. The Circular is binding upon the authorities and they cannot act to the contrary as held by the Apex Court in Catena of decisions including the decision of the Apex Court in the case of Paper Products Ltd. v. Commissioner of Central Excise reported in (1999) 7 SCC 84. The apex Court held that, apart from the fact that the Circulars issued by the Board are binding on the Department, the Department is precluded from challenging the correctness of the said Circulars even on the ground of the same being inconsistent with the statutory provision. The ratio of the judgment of the Apex Court further precludes the right of the Department to file an appeal against the correctness of the binding nature of the Circulars. In Paper Products Ltd.(supra), the Apex Court has held that so far as the Department is concerned, 4 (W.P. No.14380/2018) whatever action it has to take, the same will have to be consistent with the Circular which is in force at the relevant point of time.

The claim of the petitioner that therefore several similar cases, wherein Show Cause Notices have been issued by the DRI Officers, have been placed in call book by various adjudicating authorities all over India is not supported by any favourable data. In any event, the show cause notices which were kept in the Call Book, in view of the said Board instructions will have to be taken out of the Call Book immediately and the adjudication of such show cause notices are to be proceeded in accordance with law. It would cause grave harm to the petitioner for non- compliance of instructions issued by the Board. Therefore, if adjudicating authority is proceeding for adjudication, we find no error in the same and thus on the contrary the adjudicating authority is bound to do the same in view of the said binding circular. Therefore it is clear that so far as the department is concerned, whatever action it has to take, the same will have to be consistent with the Circular which is in force at the relevant point of time. The challenge of the circular, therefore, fails for lack of any merit.

We also find no basis on the apprehension of the petitioner that the Adjudicating Authority would not follow the the statutory requirement under section 138B of the Customs Act, 1962, and would neither summon the persons for their examination before considering their statements as 5 (W.P. No.14380/2018) relevant despite the same being prescribed in statute, nor would follow the Order of examination as per the the judgment of the Apex Court in the case of Sukhwant Singh v. State of Punjab, (1995) 3 SCC 367 which has been followed in Swiber Offshore Constructions Pvt. Ltd. v. CC, Kandla[2014 (301) E.L.T.119(Tri). The petitioner claims that the adjudicating proceedings are pending and final order is yet to be passed, we cannot presume merely on the basis of such unfounded apprehension that the adjudicating authority would not comply with the mandatory statutory requirement under Section 138B of the Customs Act, 1962, despite binding precedents in this regard in J.K. Cigarettes Ltd. v. Commissioner [2009 (242) E.L.T.189(Del.), Slotco Steel Products Pvt. Ltd. v. Commissioner [2012(281) E.L.T.193(Del.), Basudev Garg v. Commissioner [2013(294) E.L.T. 353(Del.), CCE, Meerut-1 v. Parmarth Iron Pvt. Ltd. [2010 (260) E.L.T. 514 (All.) and Swiber Offshore Constructions Pvt. Ltd.(Supra) on the applicability of the provisions of Section 138 B of Customs Act, 1962/Section 9D of Central Excise Act, 1944 and also on the order of examination as per the judgment of the Apex Court in the case of Sukhwant Singh v. State of Punujab(supra).

The apprehension of the petitioner that the adjudicating authority would pass a final order without following the said mandatory, statutory and legal requirements and the petitioner would then be forced to 6 (W.P. No.14380/2018) hardship of payment of pre-deposit which is pre-requisite for availing appellate remedies, is also unfounded. Had the petitioner prima facie shown any material for such apprehension,we would have issued notice to ensure compliance of statutory requirements or if the final order is passed by the Adjudicating Authority without following the said mandatory, statutory and legal requirement, the petitioner would be entitled for invoking writ jurisdiction under Article 226 of the Constitution of India, irrespective of alternative remedy of appeal provided under the Customs Act, 1962. 9. For these reasons, the writ petition filed by the petitioner has no merit and is, liable to be dismissed. The admission is, therefore, declined. (P.K. Jaiswal) (S.K. Awasthi) Judge Judge pn/ Preetha Nair 2018.07.06 13:15:32 +05'30' 7 (W.P. No.14380/2018)