Adjudication of Show Cause Notices - What is an issue???
A show cause notice was issued to an assessee demanding duty for the last five years invoking suppression of facts and answerable to the Commissioner. When this notice is pending, another notice was issued to the same assessee for the subsequent period, but this time, answerable to the Assistant Commissioner as the duty involved fell within his competence. Now, as two SCNs are pending before two different adjudicating authorities, it is possible that the Commissioner and the Assistant Commissioner may adjudicate the case with opposite findings which will be an embarrassment for the Department. Even if both the adjudicating officers confirm the demand, for the assessee to contest the issue further, one appeal lies with the CESTAT against the Commissioner's Order and the other with the Commissioner (Appeals). So it is always desirable for both the assessee and the department to pass one adjudication order for both the show cause notices. But, in communicating the above objective, Board clarified vide Circular No. 752/68/2003-CX., dated 1-10-2003 that :
In case different show cause notices have been issued on the same issue answerable to different adjudicating authorities, attention is invited to CBEC's Circular No. 362/78/97-CX., dated 9-12-97 , whereby it has been clarified that all the show cause notices involving the same issue will be adjudicated by the adjudicating authority competent to decide the cases involving the highest amount of duty
In the above Circulars, instead of show cause notices involving the same issue of the same assessee, it was only SCNs involving the "same issue". So irrespective of the fact whether the assessee is same or not, if the issue is same, the show cause notices will be bunched and adjudicated by the adjudicating authority competent to decide the case involving the highest amount of duty. Now what is an issue? Is Valuation an issue? Or 'Depot clearances' is an issue? Is Cenvat an issue? Or Cenvat is not an issue but only Cenvat on Capital goods is an issue? Or just Service Tax is an issue (similar instructions are given for adjudication of service tax cases)
Well, it all depends on who wants to adjudicate. If a Commissioner wants to adjudicate all the cases, nothing can stop him from literally stripping his AC/DC/JC/ADC from adjudication powers as in any Commissionerate, at any given point of time, there will be a Valuation issue, a Cenvat issue pending with Commissioner. At the same time for those ACs /DCs/JCs/ADCs who wants to pass the buck, the Circular comes in handy to push the files to the Commissioner.
In fact in Circular dated 9-12-97 it has been decided that where simultaneously different cases of the same notices(s) ( should it be noticees?) involving the same issue are due to be adjudicated in a Commissionerate, all such cases will be adjudicated by an officer competent to decide the cases where duty involved is of the highest amount.
Will the Board like to clarify?