Customs tribunal sends cases to adjudicating body, leads to backlog

While the retrospective amendment has been upheld by Bombay High Court, Madras High Court and Andhra Pradesh High Court in different cases, the Delhi High Court has struck down the retrospective amendment while ruling in a customs case pertaining to Mangali Impex Limited. (Representational Image)

IN THE last six months, the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has sent at least 65 cases of alleged violations of the Customs Act by firms in Mumbai, Raigad and Nagpur to the adjudicating authority of customs. This has created a huge backlog of cases at the level of adjudication in the department, said officials.

Sources said the CESTAT has sent these cases to adjudicating authorities, as companies have contended that top customs and excise officials, such as the commissioner of customs, additional director general of Directorate of Revenue Intelligence (DRI) and directorate general of Central Excise Intelligence (DGCEI), do not have the jurisdiction to issue showcause notice for any violations under the Customs Act.

This, despite a retrospective amendment to the Customs Act by the Parliament in 2011, which has empowered top officials of customs, DRI and DGCEI to issue showcause notices to companies for violation of customs norms.

While the retrospective amendment has been upheld by Bombay High Court, Madras High Court and Andhra Pradesh High Court in different cases, the Delhi High Court has struck down the retrospective amendment while ruling in a customs case pertaining to Mangali Impex Limited. The customs department had challenged the Delhi High Court order in the Supreme Court, where it is pending for the last two years.

At least two lawyers and two senior customs officials, who spoke on condition of anonymity, said that though most high courts have upheld retrospective amendment and decided cases, a number of benches of appellate tribunals are sending cases — involving the question of jurisdiction of customs DRI and DGCEI officers — to adjudicating officers, directing them to dispose the cases only after SC decides on the Mangali Impex case.

“Earlier this year, in two similar cases, the Delhi High Court has directed the CESTAT in Delhi to decide the case without being influenced by its decision in the Mangali Impex case. Yet, the appellate tribunal in Mumbai is sending the cases back to adjudicating authority, creating a backlog,” said a customs lawyer.

A customs official said the government should ensure that the SC hearing in the Mangali Impex case is expedited so that all other similar cases can be decided in a time-bound manner. “A lot of duty is currently tied up in these cases, so we need to expedite the hearing in the Mangali Impex case.”