2024 (2) TMI 1145 - HC - Customs

Non-compliance to Orders of the appellate authority by the subordinate original authority - Waive detention and demurrage charges - seeking relief for release of the imported machinery for home consumption - classify the goods under Chapter 90 as Runway Friction Measuring Machine - imported friction testing vehicle - prohibited in terms of Section 2(33) - confiscation in terms of Section 111(d) - redemption fine and imposed penalty - HELD THAT - In our view, it is settled law that the principle of judicial discipline requires that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. Applying this settled legal position, by the said Order dated 23rd March 2023, the Commissioner of Customs (Appeals) has set aside the confiscation of the imported machinery and ordered release of the same for home consumption. Though an Appeal has been filed against the said Order dated 23rd March 2023, being Customs Appeal No. 86471 of 2023, neither the appellate authority nor any other competent Court has stayed the operation of the said Order dated 23rd March 2023. Thus, the Respondents will have to be directed to release the Friction Testing Machine without prejudice to their rights and contentions in the Appeal filed by them. Hence, we hereby pass the following Orders a. The Respondents are directed to release the Friction Testing Machine for home consumption within a period of one week from the date of intimation of this Order, subject to the Petitioner furnishing a bond for payment of differential duty, in the event, the department succeeds in its Appeal filed before the Tribunal. b. In regard to the demmurage and detention charges, the Respondents are directed to issue a waiver certificate to the Petitioner along with the release of the said goods. c. The release of the machinery will be without prejudice to the rights and contentions of the Respondents in Custom Appeals No. 86471 of 2023 filed by them. Petition is disposed of.

Summary

Issues Involved:
1. Classification of imported machinery.
2. Compliance with appellate authority orders.
3. Release of imported machinery and waiver of detention and demurrage charges.

Issue-wise Summary:

1. Classification of Imported Machinery:
The Petitioner, engaged in providing Aviation and Expressway Services, imported a used Friction Testing Machine fitted in a CAR SAAB 9-5. The Petitioner declared the machinery under Chapter 90318000 but the Appraising Group reclassified it under Chapter 8705 as a Special Purpose Vehicle, deeming it prohibited under Section 2(33) of the Customs Act, 1962, and liable for confiscation under Section 111(d). The Original Adjudicating Authority upheld this reclassification and imposed penalties. However, the Commissioner of Customs (Appeals) later set aside this reclassification, confirming the machinery under Chapter 90318000, and ordered its release.

2. Compliance with Appellate Authority Orders:
Despite the Commissioner of Customs (Appeals) ordering the release of the machinery, the Respondents did not comply, citing a pending appeal without a stay order. The High Court emphasized the principle of judicial discipline, requiring subordinate authorities to follow appellate orders unless stayed by a competent court, referencing Supreme Court judgments in Union of India vs. Kamlakshi Finance Corporation Ltd. and other relevant cases.

3. Release of Imported Machinery and Waiver of Detention and Demurrage Charges:
The High Court directed the Respondents to release the Friction Testing Machine within one week, subject to the Petitioner furnishing a bond for potential differential duty. Additionally, the Respondents were instructed to issue a waiver certificate for demurrage and detention charges. The release was made without prejudice to the Respondents' rights in their pending appeal.

Conclusion:
The High Court ruled in favor of the Petitioner, mandating the release of the machinery and waiving detention and demurrage charges, while underscoring the necessity for compliance with appellate orders to prevent undue harassment and maintain administrative discipline.