TMI Blog2019 (8) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... upon where it was held that It has now been decided by the Board that Superintendents of Central Tax shall also be empowered to issue show cause notices and orders under section 74 of the CGST Act. Thus, in the present case, the writ-applicant has an alternative remedy of preferring a statutory appeal - writ-application is disposed of without going into the merits of the matter and with a liberty to the writ-applicant to avail of the alternative efficacious remedy of preferring an appeal before the Appellate Authority. - R/SPECIAL CIVIL APPLICATION NO. 13128 of 2019 - - - Dated:- 2-8-2019 - MR J. B. PARDIWALA AND MR A. C. RAO, JJ. For The Petitioner (s) : MR HARDIK P. MODH For The Respondent (s) : MR NIRZAR S. DESAI ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1. By this writ-application under Article 226 of the Constitution of India, the writ-applicant has prayed for the following reliefs : ( a) This Hon'ble Court be pleased to declare that Respondent No.3 has no power to adjudicate the Show Cause Notice bearing No.XII/01/2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, falling under Chapter Heading 7113 of the Central Excise Tariff Act, 1985, during the period from March-2016 to June-2017, should not be demanded/recovered by invoking the provisions of extended period of Section 11A(4) of the Central Excise Act, 1944, made applicable vide Rule 14 of the Articles of Jewellery (Collection of Duty) Rules, 2016, read with Section 74(1) of the Central Goods and Services Tax Act, 2017, made applicable vide Section 142(8)(a) of the Central Goods and Services Tax Act, 2017; ( ii) any exemption provided for vide Notification No.28/2016-CE dated 26.07.2016 should not be denied for evasion of above Central Excise duty; ( iii) the interest at an appropriate rate should not be recovered from them under the provisions of Section 11AA of the Central Excise Act, 1944, made applicable vide Rule 14 of the Articles of Jewellery (Collection of Duty) Rules, 2016, read with Section 50 of the Central Goods and Services Tax Act, 2017, made applicable vide Section 142(8)(a) of the Central Goods and Services Tax Act, 2017; ( iv) penalty equal to duty evaded should not be imposed under Section 11AC(1)(c) of the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( iii) the seized goods totally valued at ₹ 15,58,59,711/- (₹ 4,10,68,644/- as per order of seizure dated 12.01.2018 and ₹ 11,47,91,067/- as per order of seizure dated 14/15.03.2018) should not be confiscated under the provisions of Section 130(i, ii iv) of the CGST Act, 2017; (iv) the interest at an appropriate rate should not be recovered from them under the provisions of Section 50 of the CGST Act, 2017; ( v) the penalty equal to the tax amount evaded should not be imposed upon them under Section 122(1)(i), (xv), (xvi), (xvii),(xviii), (xx) of the CGST Act, 2017; ( vi) the penalty equal to the tax amount evaded should not be imposed upon them under Section 122(2)(b) of the CGST Act, 2017; ( vii) the penal action should not be initiated against them for the offences committed under Section 132(a), (e), (h), (j) (k) of the Central Goods and Services Tax Act, 2017. 4. The Joint Commissioner, GST and Excise, Surat, undertook the adjudication proceedings and ultimately passed an order dated 10th July 2019 as under : ( i) determine denial of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Assistant/Deputy Commissioner. ( vi) order to recover interest for the amount mentioned at Sr.No. (ii) above, at an appropriate rate from them under the provisions of Section 11AA of Central Excise Act, 1944 made applicable vide rule 14 of Articles of Jewellery (Collection of Duty) Rules, 2016 read with Section 50 of the CGST Act, 2017 made applicable vide Section 142(8)(a) of the Central Goods and Services Tax Act, 2017 and I also order to recover interest on tax amount mentioned at Sr. No. (iii) and (iv) above under the provisions of Section 50 of the the CGST Act, 2017 and the Gujarat GST Act, 2017 read with the provisions of Section 6 of Gujarat GST Act, 2017, from M/s Palak Designer Diamond Jewellery, Surat. ( vii) Impose penalty of ₹ 5,84,79,970/- (Rs. Five Crore Eighty Four Lakhs Seventy Nine Thousand Nine Hundred Seventy only) under Section 11AC(1)(c) of the Central Excise Act, 1944 read with rule 25 of the Central Excise Rules, 2002 made applicable vide Section 142(8)(a) of the Central Goods and Services Tax Act, 2017 on M/s Palak Designer Diamond Jewellery. ( viii) impose penalty of ₹ 7,18, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST Act, 2017. 5. The aforesaid order passed by the Joint Commissioner is a subject matter of challenge by way of the present writapplication. It was brought to the notice of Mr.Modh, the learned counsel appearing for the writ-applicant, that there is a statutory appeal provided against the impugned order before the Commissioner (Appeal) as per Rules 108 and 109A(1) of the CGST Rules, 2017, read with Section 107 of the CGST Act, 2017, on the payment of the admitted amount and pre-deposit of 10% of the disputed tax and cess within three months from the date of the communication of the impugned order. 6. In such circumstances referred to above, we called upon Mr.Modh to explain us as to why the writ-applicant should not be relegated to avail of the alternative remedy of preferring a statutory appeal. Mr.Modh submitted that the order passed by the Joint Commissioner could be termed as without jurisdiction. According to Mr.Modh, the Joint Commissioner was not empowered to issue the show-cause notice referred to above and adjudicate the same by passing the final impugned order. According to Mr.Modh, the Circular No.1049/37/2016-CX dated 29th September 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( viii) Circular No.130/12/2010-S.T., dated 20.9.2010 [2010 (20) S.T.R. (C9)] 2. Adjudication of confiscation and penalty by the Central Excise Officers is provided in Section 33 of the Central Excise Act, 1944. Central Excise Officers have the power under Section 11A to adjudicate show cause notices demanding duty short paid or not paid and erroneously refunded. Similar powers exist in Service Tax under Section 73 and Section 83A of the Finance Act, 1994 (Notification No.44/2016-Service Tax dated 28.9.2016 refers). It is hereby directed that henceforth powers of adjudication both in Central Excise and Service Tax shall be exercised, based on the monetary limit of the duty/tax/ credit involved in a case, as under :- Sl. No. Central Excise Officer Monetary Limits of duty/tax/credit demand for Central Excise and Service Tax 1. Superintendent Not exceeding rupees ten lakh 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of the Central Excise Officer would be a Central Excise Officer. The Supreme Court took notice of the fact that, although the Legislature has made such change, yet the Board issued a circular prescribing the monetary limits. 10. The question before the Supreme Court was : Can the Board override the provisions of the Act by issuing directions in the manner in which it was done and if the Board could not do so, then what would be the effect of such circulars ? 11. The Supreme Court, ultimately, held as under : 6. It must be mentioned that the only point agitated is that the Superintendent had no jurisdiction to issue the show-cause notices and that the Deputy Commissioner had no jurisdiction to adjudicate. This is because in an earlier round it has already been held by CEGAT, by its order dated 17th October, 2000 that the Appellants are not entitled to the benefit of the Notifications. Against that Order Civil Appeal No.4050 of 2001 is pending before this Court. 7. In order to consider this point it is necessary to see the relevant provisions. 8. Section 11A, as it stood, prior to 14th May ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rules made under this Act a monthly return, showing particulars of the duty paid on the excisable goods removed during the month to which the said return relates, is to be filed by a manufacturer or producer or a licensee of a warehouse, as the case may be, the date on which such return is so filed; ( B) where no monthly return as aforesaid is filed, the last date on which such return is to be filed under the said rules; ( C) in any other case, the date on which the duty is to be paid under this Act or the rules made thereunder; ( b) in a case where duty of excise is provisionally assessed under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof; ( c) in the case of excisable goods on which duty of excise has been erroneously refunded, the date of such refund. Thus, under Section 11A, as it then stood, whenever it was alleged that there was fraud, collusion, willful misstatement or suppression of facts, the show-cause-notices could only be issued by the Collector. As the Act itself laid down a requirement, it has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -C.Ex., dated 17th May, 1947, to Assistant Commissioners of Central Excise by CBR Notification No.8-C.E., dated 2nd September, 1944 and to Superintendent of Central Excise by CBR Notification No.93/59, dated 28th November, 1959. ( ii) So far as the confirmation of duty is concerned, it is observed that Section 11A empowers any Central Excise Officer to issue the notice and determine the duty due. ( iii) Likewise, the proper officer i.e. Jurisdictional Central Excise Officer can issue notice and adjudicate the demands under Rule 9(2)/Rule 57-I/Rule 57U of Central Excise Rules, 1944. ( iv) In order to bring about uniformity and objectivity the Board issued instructions defining powers of adjudication of specified Central Excise Officers taking 'duty involved' as the criterion. 3. Those show cause notices where adjudication orders are not passed upto 28th February, 1997, will be adjudicated as provided hereinafter :- ( A) All cases involving fraud, collusion, any willful misstatement, suppression of facts, or contravention of Central Excise Act/Rules made thereunder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the same rank of officers who will adjudicate them. Wherever the posts of Commissioner-I and Commissioner- II (Judicial) are in existence, the show cause notices will be issued by Commissioner-I. 5.2 In respect of cases covered under Category (B) of Para 3 above, show cause notices will be issued by the Range Superintendent where they are to be adjudicated by the Assistant Commissioner and such notices will be issued by Assistant Commissioner when they are adjudicated by Dy. Commissioner/Addl. Commissioner/Commissioner. 5.3 In respect of cases covered under category (C) of Para 3 above, show cause notices will be issued by Assistant Commissioner. 6. The definition of expression Commissioner contained in Rule 2(ii) was amended by Notification No. 11/92-C.E. (N.T.), dated 14-5-1992. Accordingly, an Additional Commissioner of Central Excise is not a Commissioner for the purposes of appeal. Therefore, appeal against the Order-in-Original passed by an Addl. Commissioner of Central Excise shall lie to the Commissioner of Central Excise (Appeals) and not to the CEGAT. 7. All Previous Board's Circulars relatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se Officer or any other Officer with powers of Central Excise Officer. By virtue of Section 37B the Board can issue orders, instructions or directions to the Central Excise Officers and such Officers must follow such orders, instructions or directions of the Board. However, these directions can only be for the purpose of uniformity in the classification of excisable goods or with respect to levy of duties of excise on such goods. It is thus clear that the Board has no power to issue instructions or orders contrary to the provisions of the Act or in derogation of the provisions of the Act. The Board can only issue such direction as is necessary for the purpose of and in furtherance of the provisions of the Act. The instructions issued by the Board have to be within the four corners of the Act. If, therefore, the Act vests in the Central Excise Officers jurisdiction to issue show-causenotices and to adjudicate, the Board has no power to cut down that jurisdiction. However, for the purposes of better administration of levy and collection of duty and for purpose of classification of goods the Board may issue directions allocating certain types of works to certain Officers or classes of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act ) and the rules made thereunder. Further, vide Circular No. 3/3/2017 - GST dated 5th July, 2017, the proper officers for provisions other than registration and composition under the CGST Act were assigned. In the latter Circular, the Deputy or Assistant Commissioner of Central Tax was assigned as the proper officer under sub-sections (1), (2), (3), (5), (6), (7), (9) and (10) of section 74 while the Superintendent of Central Tax was assigned as the proper officer under sub-sections (1), (2), (3), (5), (6), (7), (9) and (10) of section 73 of the CGST Act. 2. It has now been decided by the Board that Superintendents of Central Tax shall also be empowered to issue show cause notices and orders under section 74 of the CGST Act. Accordingly, the following entry is hereby being added to the item at Sl. No. 4 of the Table on page number 3 of Circular No. 3/3/2017-GST dated 5th July, 2017, namely:- Sl. No. Designation of the officer Functions under Section of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Table below, the functions as the proper officers in relation to issue of show cause notices and orders under sections 73 and 74 of the CGST Act and section 20 of the IGST Act (read with sections 73 and 74 of the CGST Act), up to the monetary limits as mentioned in columns (3), (4) and (5) respectively of the Table below:- Sl No Officer of Central Tax Monetary limit of the amount of central tax (including cess) not paid or short paid or erroneously refunded or input tax credit of central tax wrongly availed or utilized for issuance of show cause notices and passing of orders under sections 73 and 74 of CGST Act Monetary limit of the amount of integrated tax (including cess) not paid or short paid or erroneously refunded or input tax credit of integrated tax wrongly availed or utilized for issuance of show cause notices and passing of orders under sections 73 and 74 of CGST Act made applicable to matters in relation to integrated tax vide section 20 of the IGST Act Monetary limit of the amount of integrated tax (including c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TI in which the principal places of business of the noticees fall in multiple Commissionerates and where the central tax and/or integrated tax (including cess) involved is more than ₹ 5 crores shall be adjudicated by an officer of the rank of Additional Director/Additional Commissioner (as assigned by the Board), who shall not be on the strength of DGGSTI and working there at the time of adjudication. Cases of similar nature may also be assigned to such an officer. 8. In case show cause notices have been issued on similar issues to a noticee(s) and made answerable to different levels of adjudicating authorities within a Commissionerate, such show cause notices should be adjudicated by the adjudicating authority competent to decide the case involving the highest amount of central tax and/or integrated tax (including cess). 9. It is requested that suitable trade notices may be issued to publicize the contents of this circular. 10. Difficulty, if any, in implementation of the above instructions may please be brought to the notice of the Board. Hindi version would follow. 15. Thus, in view of the aforesaid, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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