M/S Star Delta Exim (P) LTD. vs. Union Of INDIA Through Its Secretary

Held

The Court held that Clause 11.2 of the Master Circular is applicable. The Court found substantial similarities between the two show cause notices, indicating they were based on common evidence and investigation, leading to a possibility of divergent views. To avoid such a situation, the Master Circular provides for adjudication by the authority competent to decide the case involving the highest amount of duty. In this instance, the earlier show cause notice to M/s. Chandra Protech Ltd. involved a higher amount (Rs. 22,45,79,860/-) compared to the impugned notice (Rs. 4,49,63,006/-). The Court rejected the revenue's argument that the request for transfer was beyond the adjudicating authority's power, stating it was open for the authority to seek an appropriate order for transfer. The Court also found the revenue's reliance on the rescinded Circular No. 1000/7/2015-CX to be untenable. The impugned Order-in-Original was set aside, and the proceedings were ordered to be transferred to the DGCEI for decision along with the earlier proceedings.

Facts

M/s Star Delta Exim (P) Ltd. and its directors challenged an Order-in-Original dated 25.05.2018 passed by the Commissioner, Central Goods and Service Tax Commissionerate, Alwar. The challenge was based on Clause 11.2 of Master Circular No. 1053/2/2017-CX. A prior show cause notice dated 01.03.2016 was issued by the Directorate General of Central Excise Intelligence (DGCEI) to M/s. Chandra Protech Ltd. for CENVAT Credit of Rs. 22,45,79,860/-. The impugned show cause notice dated 23.10.2017 was issued to the petitioners for CENVAT Credit of Rs. 4,49,63,006/-. The court noted striking similarities between the two show cause notices, indicating they were based on common investigation and evidence.

Key Issues

1. Whether Clause 11.2 of Master Circular No. 1053/2/2017-CX, which mandates that show cause notices involving the same issue answerable to different adjudicating authorities shall be adjudicated by the authority competent to decide the case involving the highest amount of duty, is applicable in this case? Petitioner's argument: The petitioner contended that since both show cause notices dealt with the same issue and were based on common evidence, the adjudication should be done by the authority competent to decide the case with the highest amount of duty, which was the DGCEI, where proceedings were still pending. They relied on Clause 11.2 of the Master Circular. Revenue's argument: The revenue argued that the writ petition was not maintainable due to the alternative remedy of appeal. They also contended that Circular No. 1000/7/2015-CX, which dealt with DGCEI cases, was rescinded and that the present case was not booked by DGCEI. Furthermore, they argued that the request for transfer was made late and was beyond the power of the adjudicating authority in Alwar.