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2019 Supreme(Raj) 164
IN THE HIGH COURT OF RAJASTHAN, JAIPUR BENCH
Mohammad Rafiq, Goverdhan Bardhar, JJ.
Sypher Impex Alloys Pvt. Ltd. and Ors. - Appellants
Vs.
Union of India and Ors. - Respondents
D.B. Civil Writ Petition No. 5421 of 2018
Decided On : 29-03-2019
For the Appellant : Sudhir Malhotra and Arun Goyal
For the Respondents: Anurag Kalavatiya
Clause 11.2 of the Master Circular No. 1053/2/2017-CX, which provides guidelines for adjudication of show cause notices, is applicable to cases where different notices are issued on the same issue, answerable to different adjudicating authorities. In such cases, the show cause notice involving the highest amount of duty should be adjudicated by the authority competent to decide that case.
Headnote:
CENTRAL EXCISE - SHOW CAUSE NOTICE - ADJUDICATION - JURISDICTION - TRANSFER OF CASE - SAME ISSUE - HIGHEST AMOUNT OF DUTY - MASTER CIRCULAR NO. 1053/2/2017-CX, CLAUSE 11.2 - INTERPRETATION - APPLICABILITY - DGCEI INVESTIGATION - TRANSFER OF CASE TO ADJUDICATING AUTHORITY WITH HIGHEST AMOUNT OF DUTY.
Fact of the Case:
Two show cause notices were issued to different parties for the same issue, with the second notice being based on evidence discovered during the investigation for the first notice. The first notice involved a higher amount of duty than the second. The petitioners challenged the jurisdiction of the adjudicating authority for the second notice, arguing that it should have been transferred to the authority handling the first notice, as per Clause 11.2 of the Master Circular No. 1053/2/2017-CX.
Finding of the Court:
The court found substantial similarities between the two show cause notices, indicating that they were based on common evidence. It held that the Master Circular's Clause 11.2 was applicable and should have been followed to avoid divergent views by different adjudicating authorities.
Issues: 1. Whether Clause 11.2 of the Master Circular No. 1053/2/2017-CX is applicable to the present case. 2. Whether the adjudicating authority for the second show cause notice had jurisdiction to proceed with the case.
Ratio Decidendi: The court interpreted Clause 11.2 of the Master Circular and held that it applies to cases where different show cause notices are issued on the same issue, answerable to different adjudicating authorities. In such cases, the show cause notice involving the highest amount of duty should be adjudicated by the authority competent to decide that case. This is to avoid the possibility of divergent views by different adjudicating authorities.
Final Decision: The court allowed the writ petition, set aside the impugned Order-in-Original, and revived the proceedings pursuant to the second show cause notice. It directed that the proceedings be transferred to the Additional Director General, Directorate General of Central Excise Intelligence, Delhi Zonal Unit, New Delhi, for decision along with the proceedings initiated pursuant to the first show cause notice.
Mohammad Rafiq, J.
1. This writ petition has been filed by M/s. Sypher Impex Alloys Pvt. Ltd. and M/s. Skyward Rolling & Alloys Pvt. Ltd. along with its Directors and Authorised Signatory challenging Order-in-Original dated 30.11.2017 passed by the Commissioner, Central Goods and Service Tax Commissionerate, Alwar.
2. Learned counsel for the parties have confined their submissions as to the attract ability of Clause 11.2 of Master Circular No. 1053/2/2017-CX., dated 10.03.2017 (for short 'the Master Circular') issued by the Central Board of Excise and Customs, New Delhi. This Circular has been issued in super session of different 92 Circulars and Instructions on Show Cause Notices and Adjudication issued by the Board from time to time and therefore rescinded all of them, list of which has been appended thereto. The aforesaid Master Circular addresses references from trade and field formations and provides clarity and uniformity on the issues so raised. The aforesaid Circular covers 31 different subjects. Part I of the Master Circular deals with Demand; Show Cause Notice; Structure of Show Cause Notice; Authority to adjudicate; Limitation to demand duty; Extended period; Applicability of limitation in demanding interest; Demand due to Department Audit or CERA; Pre Show Cause Notice consultation; Authority to issue Show Cause Notice; Unjust enrichment in Show Cause Notice; Changing Practice of Assessment; Waiver of Show Cause Notice and; Call Book Cases. Part II of the Master Circular deals with Adjudication, Monetary limits and other issues; Jurisdiction of Executive Commissionerate; Adjudication by officers of Audit Commissionerate; Cases investigated by DGCEI; Service of Show Cause Notice and Relied Upon Documents; Stages of adjudication; Corrigendum to an adjudication order; Transfer of adjudicating authority; Signing of the order and; Adjudication of SOFs/LAR raised by CERA. In part III, subjects of confirmed demands and recovery have been dealt with. Part IV of the Master Circular deals with Service of decisions, orders, summons, etc.; De novo adjudication; no Show Cause Notice on voluntary payment and; refund of pre-deposit. Opening of the Master Circular reads as under:
"Government of India
Ministry of Finance (Department of Revenue)
Central Board of Excise & Customs, New Delhi
Subject: Master Circular on Show Cause Notice, Adjudication and Recovery-Regarding.
Kind attention is invited to Ninety two Circulars and Instructions on Show Cause Notices and Adjudication issued by the Board from time to time, placed at the Annexures to this Master Circular. These circulars address references from trade and field formations and provide clarity and uniformity on the issues raised. Board undertakes exercise of consolidating these circulars from time to time so as to ensure clarity and ease of reference. This master circular on the subject of show cause notices, adjudication proceedings and recovery is an effort to compile relevant legal and statutory provisions, circulars of the past and to rescind circulars which have lost relevance. Annexure-I to the circular provides list of the eighty nine circulars which stand rescinded. Three circulars listed in Annexure-II have not been rescinded as they contain comprehensive instructions on the subject they address.
2. The matter circular is divided into four parts. Part I deals with Show Cause Notice related issues, Part II deals with issues related to Adjudication proceedings, Part III deals with closure of proceedings and recovery of duty and Part IV deals with miscellaneous issues.
3. The provisions of the Master Circular shall have overriding effect on the CBEC's Excise Manual of Supplementary instructions to the extent they are in conflict.
4. Difficulty, if any, in the implementation of this Circular may be brought to the notice of the Board. Hindi version will follow."
3. We a
