2019 (9) TMI 364 - HC - Customs

Non-speaking order - order set aside on the ground of laches, since it was belatedly disposed without adhering to the time limit stipulated in the Circular of the Department - Circular No.732/48/2003-CX., dated 05.08.2003 - Classification of imported goods - pepper - case of the petitioner is that as per the four Bills of Entry, the importer has classified natural pepper under Tariff item 33021010 in two Bills of Entry and Tariff item 33021090 in the other two Bills of Entry - HELD THAT - Since the respondent had not given the reasoning as to why these tariff items will not be applicable to the description of their product has not been specified in the impugned order, it would amount to a non-speaking order - It is no doubt true that the respondent had chosen to rely on Rule 2B of the General Rules by interpretation of the first schedule of Customs Tariff Act, 1975 and applied the tariff item for the most specific description of pepper. Such a reasoning cannot be usually found fault with. In the instant case, the impugned order came to be passed after more than two years from the date when the personal hearing had concluded. Though, the Circulars of the Department may not be mandatory to be complied with, the respondent atleast should have justified the reason for such belated disposal of the case after the personal hearing. On this score also, the order is liable to be set aside. The matter is remanded back to the respondent herein, for reconsideration, after giving due opportunity of personal hearing to the petitioner - petition allowed by way of remand.

Summary

Issues: Challenging non-speaking order and delay in disposal of proceedings.

Analysis:
1. The petitioner challenged the Order-in-Original on two grounds: it being a non-speaking order and the delay in disposal of proceedings beyond the time limit stipulated in the Circular of the Department. The petitioner argued that the order lacked reasoning as to why certain tariff items were not applicable to their product, making it a non-speaking order.

2. The respondent contended that the impugned order did provide reasoning for the specific classification of pepper and that the Circular specifying time limits for disposal of cases was not mandatory but directory in nature. The respondent relied on Rule 2B of the General Rules to interpret the Customs Tariff Act and apply the most specific tariff item for pepper.

3. The Court observed that while the respondent's reasoning based on Rule 2B was valid, it was essential for the respondent to explain why the tariff items specified in the Bills of Entry were not applicable to the petitioner's product. The lack of such discussion rendered the order bereft of reasoning, necessitating reconsideration.

4. Regarding the delay in disposal of proceedings, the Circular mandated that decisions be communicated within one month of the conclusion of personal hearings. In this case, the order was passed over two years after the personal hearing, without justification for the delay. The Court held that while the Circular was not mandatory, the respondent should have provided a reason for the belated disposal, warranting the order to be set aside.

5. Consequently, the Court set aside the impugned order and remanded the matter back to the respondent for reconsideration. The respondent was directed to conduct a fresh personal hearing and pass a speaking order within thirty days from the conclusion of the hearing. The Writ Petition was disposed of with no costs imposed.

6. Additionally, the Court noted that the petitioner had deposited 25% of the demanded amount in compliance with a previous order, clarifying that the deposit would be subject to the respondent's decision following the Court's directions.

This comprehensive analysis of the judgment highlights the issues raised, arguments presented by both parties, and the Court's reasoning leading to the final decision.