'Same Order Challenged Before Multiple Benches': CESTAT Refers Matter To President For Constitution Of Special Bench

Citing the principle of “comity of Courts,” the bench, consisting of Ajayan T.V. (Judicial Member) and M. Ajit Kumar (Technical Member), observed that since the Ahmedabad Bench had already heard an appeal from the same impugned order, it would be appropriate for the Chennai Bench to decline jurisdiction over the same subject matter.

The case originates from an investigation by the Directorate of Revenue Intelligence (DRI), Surat, into various exporters, including M/s. Ayush Exports and Astha Exim, who allegedly exported goods at overvalued prices to fraudulently obtain DEPB license benefits and other export incentives. A Show Cause Notice was issued to several parties, including the assessee/appellants, to deny DEPB benefits and recover customs duty.

The Commissioner confirmed the proposals in the show cause notice, holding G-Tech Stone Ltd. liable for customs duty. Habasit Iakoka Pvt. Ltd. was held liable for customs duty. Additionally, a penalty equal to the duty was imposed on both assessee under Section 114A of the Customs Act, 1962.

The counsel for the department/respondent raised a preliminary objection regarding the jurisdiction of the Chennai Bench to hear the appeals. She argued that the proper forum would be the Tribunal having jurisdiction over the territory where the adjudicating authority is situated, as the cause of action emanated from the Order in Original (OIO) passed in Surat.

She also pointed out that an appeal by one of the main appellants, M/s. Astha Exim, had already been accepted and dismissed by CESTAT, Ahmedabad. The A.R. submitted that hearing the appeals in Chennai would allow different appellants to take advantage of potential conflicts in law laid down by different Tribunals.

The counsel for the assessee argued that the appeals were filed before the Chennai Bench because the imports by the appellants/assessee were made through Chennai Port. He cited CEGAT Notification No. 5/1995 dated May 31, 1995, which suggests that jurisdiction is determined by the port of import or export.

The Tribunal noted that the OIO was passed by a "Common Adjudicating Authority" appointed by the CBEC (now CBIC) through a notification. The Tribunal acknowledged that the cause of action arises from an order passed by an authority located outside its territorial jurisdiction, while the assessee itself is within its territory.

The Tribunal noted that the Counsel for the appellants/assessee also requested that the issue be referred to the President as per CESTAT Notification No. 1/2022, dated January 24, 2022.

The said notification stipulates that when appeals against the same impugned order are filed before different Benches, they should be heard by a single Bench constituted by a special order of the President.

In light of the submissions and the CESTAT Notification No. 1/2022, the Tribunal disposed of the appeals by directing the Registry to place the matter before the Hon'ble President for a special order to constitute a Bench to hear and decide the appeals.

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

Case Number: Customs Appeal No. 41230/2013

Counsel for Appellant/ Assessee: Shri S. Murugappan

Counsel for Respondent/ Department: Smt. Anandalakshmi Ganeshram