1993 (3) TMI 120 - HC - Customs

Summary

Issues Involved:
1. Legality of the Tribunal's power to award compensation u/s 129B(1) of the Customs Act, 1962.
2. Justification for enhancing compensation from Rs. 5 lakhs to Rs. 20 lakhs u/s 129B(2) of the Customs Act, 1962.

Summary:

1. Legality of the Tribunal's Power to Award Compensation u/s 129B(1) of the Customs Act, 1962:

The Tribunal directed the petitioner to pay Rs. 5 lakhs as compensation to the Charterer, invoking its powers u/s 129B(1) of the Customs Act, 1962. The petitioner challenged this, arguing that the Tribunal's powers are circumscribed by the Act and do not expressly include the power to award compensation. The Tribunal justified its decision by comparing its powers to those of the Income Tax Appellate Tribunal u/s 254 of the Income Tax Act, which the Supreme Court had interpreted to include incidental powers necessary to its appellate jurisdiction. However, the High Court found this comparison flawed, noting that the Customs Act specifies the Tribunal's powers to confirm, modify, or annul decisions, unlike the broader powers granted u/s 254 of the Income Tax Act. The High Court concluded that the Tribunal, being a statutory authority, could not exercise inherent powers to award compensation, which are reserved for courts of plenary jurisdiction.

2. Justification for Enhancing Compensation from Rs. 5 lakhs to Rs. 20 lakhs u/s 129B(2) of the Customs Act, 1962:

The Tribunal initially awarded Rs. 5 lakhs as compensation and later enhanced it to Rs. 20 lakhs through an amendment u/s 129B(2), which allows rectification of any mistake apparent from the record within four years. The petitioner contended that there was no mistake apparent from the record to justify this enhancement. The High Court agreed, stating that the Tribunal's power to amend orders u/s 129B(2) is limited to rectifying apparent mistakes and does not extend to substantive changes like increasing compensation. The High Court emphasized that the Tribunal's powers are confined to confirming, modifying, or annulling decisions, and enhancing compensation does not fall within these parameters.

Conclusion:

The High Court modified the Tribunal's orders, directing the Central Government to refund the fine amount of Rs. 2 lakhs paid by the Thai Company, along with interest, to the Charterer. The petition was allowed, and the Tribunal's orders awarding and enhancing compensation were quashed.