2019 (8) TMI 42 - HC - Customs

Non-speaking order - Appeal decided without opportunity of being heard provided to the appellants - principles of natural justice - Imposition of penalty u/s 112(a) of CA - HELD THAT - There has been no consideration whatsoever of the issues raised by the Appellants in their appeals. In fact, the impugned order only records the submissions made on behalf of the Respondent-Commissioner. The revocation of the CHA Licence was on account of breach of the obligation under the Customs House Agents Licensing Regulations. At the time of the hearing, this was a relevant factor and even this was not pointed out by the Revenue at the hearing before the Tribunal - Thus the impugned order does not even indicate grievance of the Appellants before the Tribunal - In the absence of the grievance of the parties before it being considered the impugned order is a nonspeaking order. Appeal allowed - matter restored for fresh consideration - decided in favor of assessee.

Summary

Issues:
Challenging a common order of the Customs, Excise and Service Tax Appellate Tribunal under Section 130 of the Customs Act, 1962 regarding penalties imposed under Section 112(a) of the Act and denial of reasonable opportunity of being heard.

Analysis:
The appeals raised questions on the sustenance of penalties under Section 112(a) and the denial of a fair hearing by the Appellate Tribunal. Both appeals were admitted based on these substantial questions of law and taken up for final disposal due to a narrow dispute. The Appellants, a Private Limited Company and its Director, a Customs House Agent at Mumbai Port, were penalized for diverting imported goods meant for export by organizing 'high sea sales' to a location where the supporting manufacturer had no premises. The Commissioner imposed penalties of ?20 lakhs each in 2007, alleging their responsibility for diversion.

The Appellants contended that the high sea sales were accepted by the Department, as evidenced by the clearance of goods in the name of high seas buyers after examination. They claimed to have transported goods to Kalamboli solely based on importer instructions, denying any involvement in diversion. However, during the Tribunal hearing in 2017, the Appellants were absent, and their appeals were dismissed on merits without considering their submissions. The Tribunal's order lacked any mention of the Appellants' grounds or grievances, focusing solely on the Respondent-Commissioner's submissions.

Despite the lack of consideration for the Appellants' contentions, the Tribunal dismissed their appeals. Notably, in a related proceeding under the Customs House Agents Licensing Regulations, the Tribunal had previously revoked a license for the same facts, a point not raised during the hearing. Consequently, the High Court found the Tribunal's order to be non-speaking and restored the appeals for fresh consideration and disposal in accordance with the law. Ultimately, both substantial questions of law were answered against the Revenue and in favor of the Appellants, leading to the restoration of the appeals for proper review and decision-making by the Tribunal.

Conclusion:
The High Court's judgment addressed the issues of penalty imposition under Section 112(a) of the Customs Act and the denial of a fair hearing by the Appellate Tribunal. By highlighting the lack of consideration for the Appellants' arguments and the non-speaking nature of the Tribunal's order, the Court restored the appeals for a fresh review. This comprehensive analysis ensures a just and lawful disposition of the case, emphasizing the importance of due process and proper examination of all relevant factors in legal proceedings.