CESTAT Rules Secondary Adjudication Under Customs Void Due to Pre-existing Adjudication

Court Name : CESTAT Ahmedabad

Parties : Neeraj Sharma Vs Commissioner of Customs

Decision Date : 24 July 2023

Judgement ref : Customs Appeal No. 12056 of 2018-DB

Imagine you're in a legal battle, and a secondary adjudication is initiated based on the same show cause notice that was already adjudicated. Sounds redundant, right?

Well, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Ahmedabad thought so too. In the case of Neeraj Sharma Vs Commissioner of Customs, the CESTAT ruled that a secondary adjudication under customs is void ab initio due to a pre-existing adjudication.

This case revolved around the principle that secondary adjudication orders on the same show cause notice, particularly when appeals against the original order are pending, are not sustainable. The CESTAT, considering the facts and submissions, agreed with the appellant’s contention and declared the impugned order void and illegal.

So, if you're ever faced with a similar situation, remember this ruling. It could be the key to your defense. The CESTAT's decision reinforces the legal principles of efficient case handling, avoiding duplications, and respecting the sanctity of existing adjudications.

This is a crucial reminder for all customs professionals. Always ensure that your actions are well-documented and can withstand scrutiny. And remember, secondary adjudications based on a show cause notice already adjudicated are void ab initio.

FINAL ORDER NO. 11564/2023

RAMESH NAIR :

This appeal is directed against order-in-original No. KDL-COMMR-SKA30-2017-18 dated 29.03.2018 passed by learned Commissioner of Customs,

Customs House, Kandla. The said order was adjudicated in the proceedings

initiated vide show cause notice F.No. DRI/SRU/INV-11/2006/517 dated

28.03.2018 issued by Additional Director General, DRI, Ahmedabad Zonal

Unit, Ahmedabad. In the adjudication order, penalty of Rs. 25 Lakh has

been imposed under Section 112(b) of Customs Act, 1962 on the appellant

who was a co-noticee in show cause notice dated 28.03.2018.

2. Shri VR Sethi, learned Counsel at the outset submits that the

impugned order is void ab-initio as the same show cause notice dated

28.03.2018 has earlier been adjudicated by the learned Commissioner of

Customs, JNCH, Navi Mumbai vide order-in-original No. 5/2013-

14/CC(I)JNCH dated 30.06.2014. Against the said order-in-original dated

30.06.2014, appeal was filed by the appellant before CESTAT Mumbai

bearing No. C/89367/2014-Mum and CESTAT Ahmedabad bearing No.

C/13513/2014. The appeal No. C/13513/2014 filed at Ahmedabad has

already been transferred to Mumbai on the request made by the appellant

for taking with appeal No. C/89367/2014-Mum. He submits that both the

appeal are still pending at CESTAT Mumbai and the main party to the

proceedings M/s. Sainath Industries also filed appeal against order-inoriginal No. 5/2013-14/CC(I)JNCH dated 30.06.2014 at CESTAT Mumbai

bearing Appeal No. C/89435/2014 which is also pending. It is his

submission that in view of this factual position, issuance of second

adjudication order is clearly not sustainable in law particularly when the

appeals are against order-in-original dated 30.06.2014 are pending before

CESTAT Mumbai against the proceedings arising out of the same show cause

notice dated 28.03.2018.

3. Shri Tara Prakash, learned Deputy Commissioner (AR) fairly concede

that the impugned order in the present appeal was passed in the same show

cause notice wherein the adjudication order was already passed by

Commissioner of Customs, JNCH, Navi Mumbai vide order-in-original No.

5/2013-14/CC(I)JNCH dated 30.06.2014, therefore, the present order

should not have been passed again on the same show cause notice.

4. We have considered the submissions made by both the sides and

perused the record. We find from the record that it is clear that the show

cause notice bearing F.No. DRI/SRU/INV-11/2006/517 dated 28.03.2018

was already adjudicated by Commissioner of Customs, JNCH, Navi Mumbai

vide order-in-original No. 5/2013-14/CC(I)JNCH dated 30.06.2014.

Accordingly, the present impugned order is ab-initio void and illegal.

Accordingly, the same is set-aside the appeal is allowed.

5. Having held above, we would like to make it clear that the Tribunal

Mumbai is at liberty to deal with the appeals independently which are

pending before it against the order of Commissioner of Customs, JNCH, Navi

Mumbai.

(Pronounced in the open court on __)

(Ramesh Nair)

Member (Judicial)

--------------------------------------------------

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,

WEST ZONAL BENCH : AHMEDABAD

REGIONAL BENCH - COURT NO. 3

CUSTOMS Appeal No. 12056 of 2018-DB

[Arising out of Order-in-Original/Appeal No KDL-COMMR-SKA-30-2017-18 dated 29.03.2018

passed by Commissioner of CUSTOMS-KANDLA]

Neeraj Sharma …. Appellant

Proprietor, M/s. Metal Scrap Agencies.,

612, Laxmi Plaza, Laxmi Inudsrial Estate, New Link

Road Andheri (w), MUMBAI, MAHARASHTRA-400053

VERSUS

Commissioner of Customs, Kandla .... Respondent

Custom House, Near Balaji Temple,

Kandla, Gujarat

APPEARANCE :

Shri VR Sethi, Advocate for the Appellant

Shri Tara Prakash, Deputy Commissioner (AR) for the Respondent

CORAM: HON’BLE MR. RAMESH NAIR, MEMBER (JUDICIAL)

HON’BLE MR. C.L. MAHAR, MEMBER (TECHNICAL)

DATE OF HEARING : 22.06.2023

DATE OF DECISION: 24.07.2023