2020 (11) TMI 195 - HC - Customs

Maintainability of appeal - appeal was entertained without the party/appellant before it exhausting its remedy of representation before the Chief Commissioner under Regulation 14(2) of the Regulation - Regulation 14(1) of the Courier Imports and Exports (Clearance) Regulations, 1998 - HELD THAT - The Regulations had been made by the then Central Board of Excise and Customs in exercise of the powers conferred by section 157 read with section 84 of the Customs Act. Section 157 deals with the general power to make regulations. The erstwhile Central Board of Excise and Customs and now after amendment, Central Board of Indirect Taxes and Customs has been conferred the power to make regulations consistent with the Customs Act. Likewise, the Board has been conferred the power to make regulations regarding goods imported or to be exported by post or courier under section 84. Evidently, it is a subordinate piece of legislation - While Regulation 14(1) empowers the Principal Commissioner of Customs or Commissioner of Customs to revoke the registration of an authorized courier and also order for forfeiture of security; Regulation 14(2) provides for an opportunity to the aggrieved courier or an authorised officer of customs to represent before the Principal Chief Commissioner of Customs or Chief Commissioner of Customs if aggrieved by an order passed under Regulation 14(1). Thus, the remedy provided under Regulation 14(2) is by way of a representation to the higher authority. Remedy of appeal to the CESTAT is provided under section 129A of the Customs Act i.e., by the parent enactment. This right of appeal is a substantive right of an aggrieved person. It is not a matter of procedure but is a vested right conferred by the statute. Being a statutory right, it can only be circumscribed by the conditions of the statute granting it. On the other hand, an additional remedy of making representation to the higher authority is provided under Regulation 14(2) of the Regulations, which as we have noted is a subordinate legislation. Such a remedy cannot supplant or curtail the remedy of appeal granted by the empowering statute; at best it can be construed as a supplementary remedy. For non-availing of the additional or supplementary remedy provided by the subordinate legislation, an aggrieved person cannot be non-suited in appeal, a statutory remedy provided by the parent enactment. The substantial question of law is answered in the negative and against the appellant - Appeal dismissed.

Summary

Issues:
Jurisdiction of CESTAT to entertain appeal without exhausting remedy under Regulation 14(2) of Courier Imports and Exports Regulations, 1998.

Analysis:

1. Issue of Jurisdiction of CESTAT:
The appeal under section 130 of the Customs Act, 1962 challenged an order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Appeal No. C/85171/2018. The substantial question of law raised was whether CESTAT was justified in entertaining the appeal without the appellant exhausting the remedy under Regulation 14(2) of the Courier Imports and Exports Regulations, 1998. The key consideration was whether CESTAT had jurisdiction to hear the appeal without the party availing the remedy provided under the Regulations.

2. Interpretation of Regulations and Customs Act:
The Court examined the provisions of Regulation 14 of the Courier Imports and Exports Regulations, 1998, which empower the Principal Commissioner of Customs or Commissioner of Customs to revoke registration of an Authorized Courier and order forfeiture of security. Regulation 14(2) provides for an opportunity to the aggrieved party to represent before the higher authority. On the other hand, section 129A of the Customs Act allows appeals to the Appellate Tribunal against decisions or orders of the Customs authorities.

3. Precedents and Legal Interpretation:
The Court referred to previous judgments, including the cases of Bombino Express Pvt. Ltd. and Lynx Express Pvt. Ltd., where it was held that the remedy of making a representation under Regulation 14(2) does not displace the appellate authority of the Tribunal. The Court emphasized that the right of appeal to CESTAT is a substantive statutory right that cannot be curtailed by additional remedies provided under subordinate legislation like the Regulations.

4. Statutory Rights and Supplementary Remedies:
The Court reiterated that the appeal right under the Customs Act is a substantive right vested by the statute and cannot be supplanted by supplementary remedies under subordinate legislation. It clarified that the Regulations must be read consistently with the Customs Act and cannot derogate from it. Therefore, failure to avail the supplementary remedy under Regulation 14(2) does not bar an aggrieved person from pursuing the statutory appeal under section 129A of the Customs Act.

5. Conclusion and Dismissal of Appeal:
In conclusion, the Court found no merit in the appeal challenging the jurisdiction of CESTAT to entertain the appeal without exhausting the remedy under Regulation 14(2). The substantial question of law was answered in the negative, and the appeal was dismissed. No costs were awarded in this matter.

This detailed analysis of the judgment from the Bombay High Court highlights the legal interpretation of statutory provisions, precedents, and the balance between statutory appeal rights and supplementary remedies under subordinate legislation.