Pranav B Prem

The Chennai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has directed the Registry to place two connected appeals before the President of CESTAT for the constitution of a Special Bench to decide the matter arising out of a common adjudication order. The bench comprising Judicial Member Ajayan T.V. and Technical Member M. Ajit Kumar was considering appeals filed by Habasit Iakoka Pvt. Ltd. and G-Tech Stone Ltd. against Order-in-Original No. 23/MP/2012-13 dated 18.02.2013, passed by the Commissioner of Central Excise, Customs & Service Tax, Surat–I, who was appointed as a “Common Adjudicating Authority” by the CBEC (now CBIC).

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Background of the Case

The Directorate of Revenue Intelligence (DRI), Surat, conducted an investigation into exporters, including M/s. Ayush Exports and M/s. Astha Exim, for allegedly exporting goods at inflated values in order to fraudulently avail DEPB licence benefits, duty drawback, and other export incentives. A show cause notice was issued to several entities, including the present appellants, proposing denial of DEPB benefits and recovery of customs duty along with penalty.

The Commissioner confirmed the proposals in the show cause notice. He held that G-Tech Stone Ltd. was liable to pay customs duty amounting to Rs. 8,29,508/-, Rs. 9,55,833/- and Rs. 9,58,764/- forgone on imports cleared against three DEPB scrips. Habasit Iakoka Pvt. Ltd. was held liable for customs duty of Rs. 9,33,451/- against one licence. In both cases, an equivalent penalty was imposed under Section 114A of the Customs Act, 1962.

Preliminary Objection on Jurisdiction

At the hearing, the Department’s counsel raised a preliminary objection, contending that the Chennai Bench lacked jurisdiction since the impugned order emanated from Surat. She argued that the proper forum was the Tribunal having jurisdiction over the adjudicating authority’s location, as “the immediate cause of action emanated from the OIO.” It was also highlighted that Astha Exim, one of the principal noticees, had already filed an appeal before CESTAT Ahmedabad, which was dismissed by Final Order No. 11462/2014 dated 24.07.2014. Entertaining appeals in Chennai, the Department submitted, would allow appellants to exploit possible conflicts in findings by different Benches.

Assessee’s Stand

On the other hand, counsel for the appellants argued that since the imports in question were made through Chennai Port, jurisdiction lay with the Chennai Bench. Reliance was placed on CEGAT Notification No. 5/1995 dated 31.05.1995, which provides that jurisdiction may be determined based on the port of import or export, and further allows appellants to request that matters be heard by the Bench where the importer is located.

He also invoked CESTAT Notification No. 1/2022 dated 24.01.2022, which stipulates that where appeals against the same impugned order are filed before different Benches, the President may, by special order, constitute a single Bench to hear such appeals. The appellants therefore prayed that the issue be referred to the President for appropriate orders.

Tribunal’s Findings

The Tribunal noted that the order under challenge was passed by a common adjudicating authority situated outside its territorial jurisdiction, though the appellants themselves were located within its jurisdiction. Since the Ahmedabad Bench had already dealt with an appeal against the same order, the Chennai Bench held that “as per the principle of comity of Courts, where one Tribunal is already in seisin of the lis on merits, it is appropriate for the other Tribunal to decline jurisdiction over the same subject matter.” Accordingly, considering the appellants’ request and the provisions of CESTAT Notification No. 1/2022, the Bench directed that the Registry place the matter before the Hon’ble President for passing a special order to constitute a Bench for hearing and disposal of the appeals.

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In light of these findings, the Chennai Bench did not adjudicate the appeals on merits but disposed of them by referring the matter to the President of CESTAT for constitution of a Special Bench to hear and decide the appeals arising from the common order.

Appearance

Counsel for Appellant/ Assessee: Shri S. Murugappan

Counsel for Respondent/ Department: Smt. Anandalakshmi Ganeshram

Cause Title: Habasit Iakoka Pvt. Ltd v. Commissioner of Customs

Case No: Customs Appeal No. 41230/2013

Coram: Ajayan T.V. (Judicial Member), M. Ajit Kumar (Technical Member)