M/S Ambuja Cements LTD. vs. Union Of INDIA

Held

The Court held that the Commissioner, CGST, Jodhpur (respondent no. 3) lacked jurisdiction to pass the impugned order dated 31.08.2020. The reasoning was based on the fact that the Commissioner, CGST & CX, Nagpur-I (respondent no. 4) had been appointed as the common adjudicating authority for adjudication of large number of show cause notices issued to the petitioner, including the one dated 15.06.2017 relevant to the Rabriyawas Unit. The Court noted that Circular No. 1056/05/2017-C.X. dated 29.06.2017 provides for the appointment of a common adjudicating authority for Large Tax Payer Units. Consequently, there cannot be two confirmed demands for the same show cause notice. The Court acknowledged the respondent's submission that parallel proceedings were conducted and that one of the orders should be declared void. The ratio decidendi is that an authority lacks jurisdiction to adjudicate a matter that has already been assigned to and adjudicated by a designated common adjudicating authority, especially when such assignment is based on a departmental circular for efficient handling of large taxpayer issues. The Court set aside the order dated 31.08.2020 passed by respondent no. 3. The order dated 16.10.2020 passed by respondent no. 4, which inter alia covered the Rabriyawas Unit, was declared to remain operative. The petitioner was granted liberty to avail remedies against the order of respondent no. 4.

Facts

M/s Ambuja Cements Ltd. (petitioner) filed a writ petition challenging an order dated 31.08.2020 passed by the Commissioner, CGST, Jodhpur (respondent no. 3). This order disallowed CENVAT Credit amounting to Rs. 2,83,79,399/- and imposed a penalty of Rs. 25,00,000/- pertaining to the petitioner's Rabriyawas Unit, based on a show cause notice dated 15.06.2017. The petitioner contended that this demand was already covered by a prior order dated 16.10.2020 passed by the Commissioner, CGST & CX, Nagpur-I (respondent no. 4), who was appointed as a common adjudicating authority for numerous show cause notices issued to the petitioner's units across India, including the one for the Rabriyawas Unit. The respondent revenue acknowledged that two parallel proceedings were conducted.

Key Issues

1. Whether the Commissioner, CGST, Jodhpur (respondent no. 3) had the jurisdiction to pass an order disallowing CENVAT Credit and imposing penalty when a common adjudicating authority (respondent no. 4) had already been appointed to adjudicate the same show cause notice for the petitioner's Rabriyawas Unit, thereby creating parallel proceedings? Petitioner's Contention: The petitioner argued that the order passed by respondent no. 3 was without jurisdiction because the subject matter, specifically the demand of Rs. 2,83,79,399/- pertaining to the Rabriyawas unit, was already covered by the order dated 16.10.2020 passed by respondent no. 4, who was appointed as the common adjudicating authority for large taxpayer units as per Circular No. 1056/05/2017-C.X. dated 29.06.2017. Therefore, there could not be two confirmed demands for the same show cause notice. Revenue's Contention: The respondents conceded that two parallel proceedings were carried out. They submitted that one of the two orders passed by the adjudicating authorities, either by respondent no. 3 or respondent no. 4, concerning the demand of Rs. 2,83,79,399/- for the Rabriyawas Unit, deserved to be declared null and void. They noted that the petitioner did not inform respondent no. 3 about the appointment of respondent no. 4 as the common adjudicating authority.