2020 (3) TMI 534 - HC - Customs

Right to prefer an appeal - Penultimate Order - Whether the CESTAT is right in law in holding that the right to prefer an appeal under Section 129A of the Customs Act, 1962 against an order passed under the CHALR, 2004 is available only to a Customs Broker and not to the Revenue? HELD THAT - In the case in hand, though initially the licence was suspended, subsequently the suspension itself was revoked and thereafter show cause notice was issued for adjudication process. After adjudication, the licensing authority who passed the final order, i.e., the Order-in-Original, has given the findings against the respondent/licensee. Even for a normal renewal of licence, after expiry of the term, the licensee must satisfy the licensing authority that, there is no complaints of misconduct including non-compliance of any of the obligation specified in Regulation 13. Therefore if any violation of Regulation 13 is noticed, then the licensee is not entitled to get the renewal of licence, even though such licensee has not been punished for such violation of Regulation 13. The Board while making regulation, under Section 146(2) of the Customs Act, has made it clear that, certain obligations has to be scrupulously followed or to be fulfilled by the licensee as enumerated under Regulation 13 and if any violation is noticed, even though the licence is not revoked in between, at the time of renewal, that will have a bearing and such licensee would not be or may not be eligible to get renewal - Therefore the paramount intention of the Regulation makers was that, the licensee must fulfill all obligations and no adverse notice should have been there against such licensee and on satisfaction of these aspects only even renewal can be given in normal circumstances. Here in the case in hand, the order passed under Regulation 22(7) is only based on adjudication and a detailed procedure has been contemplated under Regulation 22 as to how such adjudication has to be conducted and final order to be passed. Therefore whatever order passed under Regulation 22(7) can only be construed as an adjudicative order and not as an administrative order - If such kind of adjudicative orders are passed, certainly those orders can be very well fit in the situation mentioned under Section 129A of the Customs Act, where 129A(1) (a) to (d) made it clear that, some specific orders as well as order passed by adjudicating authority are appealable to the CESTAT. Therefore the present order passed under Regulation 22(7), since being an order passed by the adjudicating authority, can be categorised under Section 129A(1)(a) of the Act, thereby the said order, can very well be appealed by an aggrieved party. No party in an adjudicating proceedings can be rendered remediless by way of appeal and if any such contrary view is taken by Courts of law, that will be detrimental to the basic structure as enshrined in our Constitution, i.e., Judicial review. Though the words any Customs House Agent aggrieved by any decision or order is employed in Regulation 22(8), we should not fail to note that, there is no prohibition specifically or expressly made prohibiting the Revenue from preferring any appeal against any order passed under subregulation 7 of Regulation 22. Therefore, there is no bar or prohibition given in express terms in the said sub-regulation 8 of Regulation 22. Therefore the view taken by the CESTAT, of course following the earlier view of the CESTAT, is erroneous. The matter is remitted back to the CESTAT for deciding the issue on merits as raised by the parties by affording reasonable opportunity for both sides in accordance with law - Appeal allowed by way of remand.

Summary

Issues Involved:
1. Maintainability of Revenue's appeal under Section 129A of the Customs Act, 1962.
2. Interpretation of CHALR, 2004 regulations regarding appeal rights.
3. Adjudicative vs. administrative nature of orders under CHALR, 2004.

Issue-wise Detailed Analysis:

1. Maintainability of Revenue's Appeal under Section 129A of the Customs Act, 1962:
The primary issue was whether the Revenue had the right to appeal against the order of the Commissioner of Customs under Section 129A of the Customs Act, 1962. The CESTAT had rejected the Revenue's appeal on the ground that only the Customs Broker could appeal under the CHALR, 2004 regulations. However, the High Court concluded that the order passed by the Commissioner of Customs was adjudicative and not administrative, making it appealable under Section 129A. The court emphasized that no party in adjudicating proceedings should be rendered remediless and that the term "any order" in Section 129A covers orders passed under CHALR regulations.

2. Interpretation of CHALR, 2004 Regulations Regarding Appeal Rights:
The court examined Regulation 22(8) of CHALR, 2004, which states, "Any Customs House Agent aggrieved by any decision or order passed under regulation 20 or sub-regulation (7) of regulation 22, may prefer an appeal under section 129A of the Act." The respondent argued that this provision allowed only Customs Brokers to appeal and not the Revenue. The court disagreed, stating that there was no explicit prohibition against the Revenue filing an appeal. The court found that the regulation did not restrict the Revenue's right to appeal and that such an interpretation would be contrary to the principles of judicial review.

3. Adjudicative vs. Administrative Nature of Orders under CHALR, 2004:
The court distinguished between adjudicative and administrative orders, noting that the order in question was the result of an adjudicative process under Regulation 22(7) of CHALR, 2004. The court referred to the detailed procedure for adjudication outlined in Regulation 22, concluding that the order was not merely administrative. The court cited the Karnataka High Court's decision in Cargomar v. Union of India, which supported the view that orders passed under CHALR regulations are adjudicative and thus appealable under Section 129A.

Conclusion:
The High Court set aside the CESTAT's order, remitting the matter back to the CESTAT to decide on merits. The court clarified that its observations on the merits were only for reaching the conclusion on the appeal's maintainability and should not influence the CESTAT's decision on the substantive issues. The appeal was allowed, answering the substantial question of law in favor of the Revenue and against the Licensee/Respondent.