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2019 Supreme(Raj) 175
IN THE HIGH COURT OF RAJASTHAN, JAIPUR BENCH
Mohammad Rafiq, Goverdhan Bardhar, JJ.
Star Delta Exim (P) Ltd. and Ors. - Appellants
Vs.
Union of India and Ors. - Respondents
D.B. Civil Writ Petition No. 16452 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 provides that in the case of different show cause notices issued on the same issue answerable to different adjudicating authorities, the show cause notice involving the same issue shall be adjudicated by the adjudicating authority competent to decide the case involving the highest amount of duty.
Headnote:
CENTRAL EXCISE - SHOW CAUSE NOTICE - ADJUDICATION - TRANSFER OF CASE - MASTER CIRCULAR NO. 1053/2/2017-CX, DATED 10.03.2017, CLAUSE 11.2 - SAME ISSUE ANSWERABLE TO DIFFERENT ADJUDICATING AUTHORITIES - HIGHEST AMOUNT OF DUTY - TRANSFER OF CASE TO ADJUDICATING AUTHORITY COMPETENT TO DECIDE CASE INVOLVING HIGHEST AMOUNT OF DUTY.
Fact of the Case:
Two show cause notices were issued to different parties for the same issue, with the second show cause notice being based on material discovered in the investigation conducted for the first show cause notice. The petitioners challenged the second show cause notice, arguing that as per Clause 11.2 of the Master Circular, the case should be adjudicated by the adjudicating authority competent to decide the case involving the highest amount of duty, which was the Additional Director General, Directorate General of Central Excise Intelligence, Delhi Zonal Unit, New Delhi.
Finding of the Court:
The court found that both show cause notices were based on common evidence relied before two adjudicating authorities by the department, thus giving rise to the possibility of divergent views by two different adjudicating authorities. The court also found that the first show cause notice contained the highest amount of duty as compared to the second show cause notice.
Issues: Whether the case should be transferred to the adjudicating authority competent to decide the case involving the highest amount of duty, as per Clause 11.2 of the Master Circular.
Ratio Decidendi: The court held that Clause 11.2 of the Master Circular provides that in the case of different show cause notices issued on the same issue answerable to different adjudicating authorities, the show cause notice involving the same issue shall be adjudicated by the adjudicating authority competent to decide the case involving the highest amount of duty. The court found that the first show cause notice contained the highest amount of duty as compared to the second show cause notice, and therefore, the case should be transferred to the Additional Director General, Directorate General of Central Excise Intelligence, Delhi Zonal Unit, New Delhi.
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 to be transferred to the Additional Director General, Directorate General of Central Excise Intelligence, Delhi Zonal Unit, New Delhi for decision with the proceedings initiated pursuant to the first show cause notice.
Mohammad Rafiq, J.
1. This writ petition has been filed by M/s. Star Delta Exim (P) Ltd. and its four Directors challenging Order-in-Original dated 25.05.2018 passed by the Commissioner, Central Goods and Service Tax Commissionerate, Alwar.
2. Learned counsel for the parties have confined their submissions as to the attractability 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 are in the present case concerned with Clause 11.2 of the Master Circular cont
