2011 (9) TMI 63 - HC - Customs

Notice of Motion - Waiver of predeposit - Meaning of Section 2(34) of the Customs Act, 1962 - The Tribunal was under a bounden obligation to consider the position in law as expounded by the Supreme Court in Sayed Ali s case and to determine as to whether the principle was attracted to the facts of the present case - When it failed to do so in its order dated 9 May 2011, the Appellant justifiably drew the attention of the Tribunal to this aspect and sought a modification of the order - , while we are inclined to set aside the impugned order of the Tribunal, we do so with the observation that the approach which has been adopted by the Tribunal in the present case, was not consistent with the principles of judicial functioning. We accordingly allow the appeal and set aside the impugned orders of the Tribunal dated 9 May 2011 and 12 August 2011 - Restore the application for waiver of predeposit to the file of the Tribunal for fresh consideration on merits.

Summary

Issues:
Appeal against CESTAT orders for waiver of predeposit, failure to consider Supreme Court judgments and Coordinate Bench decision.

Analysis:
The appeal challenged two CESTAT orders directing the Appellant to deposit Rs. 30 lakhs based on an application for waiver of predeposit. The Appellant argued that the Tribunal did not consider the binding precedent set by the Supreme Court in Commissioner of Customs vs. Sayed Ali, asserting that the Additional Director General, DRI lacked jurisdiction to issue a notice to show cause. Despite citing relevant judgments and a Coordinate Bench decision, the Tribunal dismissed the modification application, citing a Karnataka High Court judgment. The High Court admitted the appeal on the substantial question of law regarding the Tribunal's failure to consider the Supreme Court judgments and the Coordinate Bench decision.

The High Court found the Tribunal's approach to be flawed, emphasizing the importance of following binding precedents. It highlighted the necessity for judicial consistency and certainty, stressing the significance of adherence to judicial discipline and respect for precedents. The Court set aside the Tribunal's orders, noting that the Tribunal's approach was inconsistent with judicial principles. The appeal was allowed, and the application for waiver of predeposit was remanded to the Tribunal for fresh consideration. The Court clarified that all questions on merits, including the proper officer issuing the notice to show cause, are to be decided by the Tribunal. The Notice of Motion was disposed of in light of the appeal's resolution.