The CESTAT , Surat-I in its recent ruling in the case of Palak Designer Diamond Jewellery has held that the observation of the Hon’ble High Court will previal over the Board Circular and according to which the Joint Commissioner has jurisdiction not only to issue Show Cause Notice but also to adjudicate the same.
The issue involved in this case was only of jurisdiction for passing adjudication order.This appeal was filed by Revenue against order of Commisioner (Appeals) which had held that as per Board Circular the case involved more than Rs 2 crores and thus should be adjudicated by the Commissioner.
Revenue contended that the direction of the Commissioner (Appeals) in as much as the demand of more than Rs. 2 Crores be made answerable to the Commissioner is not legal and correct in view of Hon’ble Gujarat High Court in the Civil Application No.13128 of 2019 dated 2nd August 2019.
The Hon’ble CESTAT, relied on the Hon’ble Supreme Court case of Pahwa Chemicals Pvt. Ltd. v. Commissioner Of Central Excise- Delhi [2005 (181) ELT 339 (SC)] and stated that merely on the basis of Board’s circular it cannot be said that the Joint Commissioner had no jurisdiction to issue Show Cause Notice and adjudicate the same, so long the said officer is also Central Excise Officer in terms of Section 2(b) of Central Excise Act, 1944.
It is the settled law that when both Board’s Circular and the judgment of Court of law is prevailing and the judgment has contrary view than to the board circular in such case the Court’s judgment will prevail over the board circular.
Following this principle in the present case also when there is a clear observation of the Hon’ble Gujarat High Court in the present case itself that will prevail over the board circular which was relied upon by the learned Commissioner (Appeals). Accordingly, it was held that the Joint Commissioner has jurisdiction not only to issue the Show Cause Notice but also to adjudicate the same.
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
