2016 (12) TMI 134 - AT - Customs

Compounding of offences - interim relief under Rule 41 of the CESTAT Procedure Rules, 1982 - whether the Single Member Bench of the Tribunal had jurisdiction to hear the appeals (and the initial Miscellaneous Applications) filed against the order dated 04.02.2016 of the Chief Commissioner of Customs rejecting the compounding of offences applications filed by the Respondents? - Held that - we find that there is no inherent lack of jurisdiction for the Single Member Bench in hearing the appeals and miscellaneous applications and in passing the interim order No. I.O./120-123/2016 dated 21.03.2016 - Moreover, ld. Authorised Representative for Revenue has not raised the issue of jurisdiction of the Single Member Bench during the hearing of the miscellaneous application. It was held that the power to recall the judgment will not be exercised when the said ground was available to be pleaded in the original action but was not done. The Bench had asked both sides whether they have any objection in transferring Miscellaneous Applications and the Appeals to the Division Bench of the Tribunal since important issues of law are involved in the matter. The Senior Counsel for the Respondents agreed to the said proposal of the Bench. However, the Ld. Special Counsel for Revenue insisted that first the subject Interim Order should be recalled, and Revenue has no objection for transfer of the pending Miscellaneous Applications and Appeals to Division Bench thereafter. We find it appropriate to transfer the hearing of the pending appeals C/10404-10407/2016 alongwith pending Miscellaneous Applications C/Others/10132-10135/2016 to the Division Bench in view of the important legal issues involved. The Registry is directed to list the Appeals and Miscellaneous Applications before the Division Bench expeditiously. Appeals are transferred to Division Bench.

Summary

Issues Involved:
1. Jurisdiction of the Single Member Bench of the Tribunal.
2. Validity of the interim order dated 21.03.2016.
3. Grounds for recall of the interim order.
4. Direction to transfer the case to the Division Bench.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Single Member Bench of the Tribunal:
The central issue was whether the Single Member Bench had jurisdiction to hear appeals against the order dated 04.02.2016 by the Chief Commissioner of Customs, which rejected the compounding of offences applications as premature. The Tribunal observed that the amount involved exceeded ?50 Lakhs, which typically requires a Division Bench as per Section 129C (4) of the Customs Act, 1962. However, the Tribunal concluded that the issue at hand was not about the differential duty involved but whether the rejection of the Compounding Application as premature was correct. The Tribunal relied on the Supreme Court's decision in Navin Chemicals Manufacturing & Trading Company Limited, which clarified that jurisdiction should be determined based on whether the case directly relates to the rate of duty or value of goods. The Tribunal found no inherent lack of jurisdiction for the Single Member Bench in this matter.

2. Validity of the Interim Order Dated 21.03.2016:
The Tribunal examined whether the interim order dated 21.03.2016, which restrained the department from taking coercive steps relating to the personal liberty of the applicants, was valid. The Tribunal noted that the interim order was passed to prevent prejudice against the respondents while Revenue sought time to appoint special counsel and argue the case. The Tribunal found that the department was free to complete its investigation and issue show cause notices, as mentioned in the interim order. Therefore, the Tribunal upheld the interim order but discontinued the direction restraining coercive steps, considering subsequent developments.

3. Grounds for Recall of the Interim Order:
Revenue argued that the interim order should be recalled due to the Single Member Bench's lack of jurisdiction and the order's restraining effect on the department's investigation. The Tribunal referred to the Supreme Court's decision in Sri Budhia Swain & Ors, which allows recalling an order if it suffers from inherent lack of jurisdiction. However, the Tribunal found that the jurisdictional issue was not raised during the original hearing and that the interim order did not restrain the department from completing its investigation. Thus, the Tribunal concluded that there was no ground for recalling the interim order.

4. Direction to Transfer the Case to the Division Bench:
The Tribunal considered the complexity and importance of the legal issues involved and proposed transferring the pending appeals and miscellaneous applications to the Division Bench. Both parties agreed to the transfer, although Revenue insisted on recalling the interim order first. The Tribunal found it appropriate to transfer the case to the Division Bench for an expeditious hearing, given the significant legal issues involved.

Conclusion:
The Tribunal partially allowed the miscellaneous applications by discontinuing the specific direction restraining coercive steps but upheld the interim order's validity and the Single Member Bench's jurisdiction. The appeals and pending miscellaneous applications were transferred to the Division Bench for further hearing.