Case Law Details
C.C.E. & S.T. Vs Palak Designer Diamond Jewellery (CESTAT Ahmedabad)
In C.C.E. & S.T.-Surat-I v. Palak Designer Diamond Jewellery [Excise Appeal No.10239 of 2020 decided on July 23, 2021] the revenue filed an appeal against Order-in-Appeal wherein the Commissioner (Appeals) remanded the matter on the ground of adjudication by the incompetent authority (Joint Commissioner) and on the ground of violation of principle of natural justice by relying on board’s circular.
Revenue contended that the direction of the Commissioner (Appeals) in as much as demand of more than Rs. 2 Crores be made answerable to the Commissioner is not legal and correct in view of hon’ble Gujarat High Court in the Civil Application No.13128 of 2019 dated August 2, 2019.
The Hon’ble CESTAT, relied on the Hon’ble Supreme Court case of Pahwa Chemicals Pvt. Ltd. v. Commissioner Of Central Excise- Delhi [2005 (181) ELT 339 (SC)] and stated that merely on the basis of board’s circular it cannot be said that the Joint Commissioner had no jurisdiction to issue Show Cause Notice and adjudicate the same, so long the said officer is also Central Excise Officer in terms of Section 2(b) of Central Excise Act, 1944.
It is the settled law that when both board’s circular and the judgment of Court of law is prevailing and the judgment has contrary view than to the board circular in such case the Court’s judgment will prevail over the board circular.
Following this principle in the present case also when there is a clear observation of the hon’ble Gujarat High Court in the present case itself that will prevail over the board circular which was relied upon by the learned Commissioner (Appeals). Accordingly, the Joint Commissioner has jurisdiction not only to issue the Show Cause Notice but also to adjudicate the same.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The revenue filed the present appeal against the Order-In-Appeal dated 13.11.2019 passed by the learned Commissioner (Appeals) whereby, the learned Commissioner (Appeals) remanded the matter on the ground of Adjudication by the incompetent authority and on the ground of violation of principle of natural justice. In the present appeal, the revenue only raised the issue that the direction of the learned Commissioner (Appeals) in as much as demand of more than Rs.2 Crores be made answerable to the Commissioner is not legal and correct, in view of the observation made by hon’ble Gujarat High Court in the order dated 02.08.2019 passed in the respondents Civil Application No.13128 of 2019.
2. Shri Dharmendra Kanjani, Learned Superintendent (Authorized Representative) appearing on behalf of the revenue reiterates the grounds of appeal. He submits that the hon’ble High Court in the judgment dated 02.08.2019 relying upon the hon’ble Supreme Court judgment in the case of PAHWA CHEMICALS PVT. LTD. Vs. COMMISSIONER OF CENTRAL EXCISE-DELHI, reported in 2005 (181) ELT 339 (SC) given clear observation that merely relying upon the circular it cannot be said that Joint Commissioner had no jurisdiction to issue Show Cause Notice and adjudicate the same. Since this observation attained finality, the learned Commissioner (Appeals) had no option except to follow this observation and decide the matter accordingly. However, the learned Commissioner (Appeals) even after taking note of this observation held that as per board’s circular the case involved more than Rs.2 Crores should be adjudicated by the Commissioner. This finding is contrary to the observation made by hon’ble High Court therefore, the impugned order to this extent is not tenable.
3. Shri Hardik Modh, learned counsel appearing on behalf of the respondent reiterates the finding of the order of the Commissioner (Appeals).
4. We have carefully considered the submissions made by both the sides and perused the records. We find that in this case at this stage no merit is involved. The issue involved is only of jurisdiction for passing adjudication order. In the very same case the respondent against the Order-In-Original had filed Special Civil Application No.13128 of 2019 which has been decided by the Hon’ble High Court vide order dated 02.08.2019. The issue involved in the said judgment was whether the Order-In-Original in respect of the Central Excise matter passed by Joint Commissioner is legal and correct or since the amount involved is more than Rs.2 Crores the competent authority to issue the Show Cause Notice and pass the adjudication order should be Commissioner. We find that the hon’ble High Court after relying on the hon’ble Supreme Court judgment in the case of PAHWA CHEMICALS PVT. LTD. (supra) gave a clear observation which is reproduced below:-
“12. In view of the aforesaid, we are of the view that by merely relying upon the circular, it cannot be said that the Joint Commissioner had no jurisdiction to issue the Show Cause Notice and adjudicate the same.”
From the above observation coupled with the judgment of the hon’ble Supreme Court in the case of PAHWA CHEMICALS PVT. LTD. (supra) it is almost concluded that merely on the basis of board’s circular it cannot be said that the Joint Commissioner had no jurisdiction to issue Show Cause Notice and adjudicate the same, so long the said officer is also Central Excise Officer in terms of Section 2(b) of Central Excise Act, 1944. We find that the learned Commissioner (Appeals) even though taking a note of hon’ble High Court judgment differed from it on the ground that the board’s circular is binding on the departmental officer and according to the board’s circular, only Commissioner is competent authority to issue Show Cause Notice and adjudicate the same if the amount involved is more than Rs.2 Crores.
4.1 We do not agree with this finding of the learned Commissioner (Appeals) for the reason that in normal course the board’s circular is binding on the departmental officer. However, in the present case itself when the hon’ble High Court has given clear observation that too relying on the hon’ble Supreme Court judgment in the case of PAHWA CHEMICALS PVT. LTD. (supra) that merely relying upon the board circular it cannot be said that the Joint Commissioner had no jurisdiction to issue the Show Cause Notice and adjudicate the same therefore, this observation is binding in this particular case on learned Commissioner (Appeals) as well as the lower Adjudicating Authority. It is the settled law that when both board’s circular and the judgment of court of law is prevailing and the judgment has contrary view than to the board circular in such case the court’s judgment will prevail over the board circular. Following this principle in the present case also when there is a clear observation of the hon’ble High Court in the present case itself that will prevail over the board circular which was relied upon by the learned Commissioner (Appeals).
4.2 In this circumstances, we are of the view that the observation of hon’ble High Court will prevail over the board circular and according to which the Joint Commissioner has jurisdiction not only to issue the Show Cause Notice but also to adjudicate the same.
5. Accordingly, the impugned order is modified to the above extent and the revenue’s appeal is allowed in the above terms. Since the appeal itself has been disposed off, the Stay Application becomes infructuous and accordingly stands disposed off.
(Pronounced in the open court on 23.07.2021)
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