2006 (4) TMI 146 - HC - Customs

Summary

Issues Involved:
1. Validity of the Tribunal's order dated 3rd February 2000.
2. Locus standi of the petitioner to maintain the appeal.
3. Confiscation and penalties under various sections of the Customs Act, 1962.
4. Interpretation of the term "person aggrieved" under Section 129A of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Validity of the Tribunal's Order:
The core question in this writ petition is whether the order dated 3rd February 2000 passed by the Customs, Excise, and Gold (Control) Appellate Tribunal constitutes a valid decision in the eye of law. The Tribunal's order was split due to differing opinions between the Member (Judicial) and the Member (Technical). The Member (Judicial) dismissed the appeal based on the lack of locus standi of the petitioner, while the Member (Technical) found the appeal maintainable but dismissed it on merits. This split decision, without a conclusive determination on the merits by both members, is not considered a valid decision in the eye of law.

2. Locus Standi of the Petitioner:
The petitioner, a licensed Full-Fledged Money Changer (FFMC) by the Reserve Bank of India, was one of the noticees in the show-cause notice issued by the Commissioner of Customs (Preventive), Mumbai. The petitioner responded to the show-cause notice and opposed the proposed confiscation and penalties. The Tribunal's Member (Judicial) held that the petitioner had no locus standi to maintain the appeal, reasoning that the confiscated amount represented the bank's money since the pay orders had not been cleared. However, the Member (Technical) disagreed, affirming the petitioner's standing to file the appeal. The High Court held that the petitioner, having been a party to the proceedings before the adjudicating authority and having a direct legal interest in the confiscated amount, indeed had the locus standi to maintain the appeal.

3. Confiscation and Penalties:
The Commissioner of Customs (Preventive) ordered the confiscation of various amounts of foreign currency, travelers' cheques, and other assets under Sections 113(d), 113(f), 115, 118, and 121 of the Customs Act, 1962. Penalties were also imposed under Section 114 of the Act on several individuals and entities, including the petitioner. The petitioner contested these confiscations and penalties, arguing that the amounts were received in the normal course of business and that the confiscation was unwarranted. The Tribunal's Member (Technical) dismissed the appeal on merits, while the Member (Judicial) did not address the merits due to the locus standi issue.

4. Interpretation of "Person Aggrieved":
Section 129A of the Customs Act provides for an appeal to the Appellate Tribunal by any "person aggrieved" by a decision or order of the Commissioner of Customs as an adjudicating authority. The Supreme Court, in Northern Plastics Ltd. v. Hindustan Photo Films Mfg. Co. Ltd., clarified that the term "person aggrieved" is broader than "party aggrieved" and can include third parties with a direct legal interest in the goods involved in adjudication. The High Court applied this interpretation, determining that the petitioner, being a party to the proceedings and having a direct legal interest in the confiscated amounts, was indeed a "person aggrieved" and thus had the right to appeal under Section 129A.

Conclusion:
The High Court set aside the Tribunal's order dated 3rd February 2000 and remitted the matter back to the Customs, Excise, and Service Tax Appellate Tribunal for fresh hearing in accordance with law. The Tribunal was directed to hear the appeal expeditiously, with the interim arrangement regarding the custody of Rs. 68,00,000 and the bank guarantee of Rs. 23,00,000 to remain operative until the disposal of the appeal and for two months thereafter. No costs were awarded.