2006 (11) TMI 223 - HC - Customs

Summary

Issues Involved:
1. Whether the Applicant Bank is a "person aggrieved" under Section 129A of the Customs Act.
2. Whether the Applicant Bank has locus standi to prefer an appeal before the Appellate Tribunal based on the Hand Book of Import-Export and Procedure of Government of India, 1985-88.

Issue-Wise Detailed Analysis:

1. Whether the Applicant Bank is a "person aggrieved" under Section 129A of the Customs Act:

The High Court examined the definition and interpretation of the term "person aggrieved" as used in Section 129A of the Customs Act. The court referred to various legal dictionaries and precedents to understand the meaning of "person aggrieved," noting that it generally means someone who has suffered a legal grievance or has been denied something to which they are legally entitled.

The court relied on the Supreme Court's interpretation in the case of Northern Plastics Ltd. v. Hindustan Photo Films Mfg. Co. Ltd., which held that the right to appeal under Sections 128 and 129A of the Customs Act is confined to parties to the proceedings before the adjudicating authority. A third party could only appeal if they could show a direct legal interest in the goods involved.

The court found that the Applicant Bank, although it had financed the importer, did not have a direct legal interest in the goods as the import was declared invalid and illegal. The Apex Court had previously directed the bank to work out its right in a suit it had already filed, thus concluding that the bank was not a "person aggrieved" by the confiscation order.

2. Whether the Applicant Bank has locus standi to prefer an appeal before the Appellate Tribunal based on the Hand Book of Import-Export and Procedure of Government of India, 1985-88:

The Applicant Bank argued that it should be considered a joint holder of the import license based on the Hand Book of Import-Export Procedures, which states that a bank issuing a letter of credit is deemed a joint holder of the license to the extent of goods covered by the credit.

The court noted that the Handbook's provision aims to protect the bank's commitment to the foreign supplier but does not extend to granting the bank a right to appeal in confiscation proceedings under Section 129A of the Customs Act. The court emphasized that the Handbook's provision does not translate into a legal grievance or a deprivation of a legal right concerning the confiscation of goods.

The court further observed that the proprietary rights over the goods were disowned by the importer, and the Apex Court had already scrutinized the circumstances under which the letters of credit were issued. The Apex Court had found the situation "strange and unusual" and left the issue for the Reserve Bank of India to investigate.

Conclusion:

The High Court concluded that the Applicant Bank does not qualify as a "person aggrieved" under Section 129A of the Customs Act and does not have the locus standi to appeal the confiscation order. The appeal was dismissed, affirming the decision of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT). The court found no substantial question of law to consider, and the appeal was dismissed with no costs.