2024 (10) TMI 1471 - HC - Customs

Provisional release of the goods being tyres under consideration on the conditions - as argued Tribunal has not considered the test reports issued by IRMRA and no opportunity of hearing was afforded to the investigating agency and, therefore, there is violation of principles of natural justice - HELD THAT - Revenue s representative conceded before the Tribunal that although during the course of the hearing of the main appeal, a specific question was put by the Bench on the test reports, the said representative replied specifically that there were no such test reports available. However, during the course of the hearing for rectification application, the said representative conceded the fact that the IRMRA reports were not filed earlier and also same was not brought to the notice of the Bench at the time of the hearing and same have been made available to the Bench in the course of the rectification hearing. It is important to note that the representative who appeared in the main appeal for the Revenue and the representative who appeared for the Revenue for the rectification application hearing is the same representative, Mr. Deepak Sharma, Assistant Commissioner for Revenue. We fail to understand as to on what basis when the main appeal was being argued and on a specific question being raised by the Bench, the said representative stated that there are no such reports available and if the said representative was not sure, he ought to have requested the Tribunal for some time to verify and ascertain the correct position. Having not done so, now the said representative has conceded in the course of the rectification hearing that although these reports were available, the same were not filed and the same was not brought to the notice of the Bench. This is a serious matter that requires consideration by the highest officer of the department as to how such a thing could happen. This is a case where there were a series of appellants before the Tribunal and the financial stakes were high. Therefore, we direct the Joint Chief Department Representative, Mumbai Bench CESTAT, to conduct a detailed enquiry and report to this Court on how this was possible and who was responsible for such an incident. The said authority should investigate all the persons involved and report to this Court what disciplinary action (if any) is taken or proposed to be taken against the persons responsible if they are from the Revenue Department and if some private persons are involved, what action is proposed to be taken against them.

Summary

Issues:
Challenge to Tribunal's order on provisional release of goods, Alleged violation of principles of natural justice, Rectification application by Revenue, Failure to present evidence during original hearing, Responsibility of Revenue representative, Need for detailed inquiry into the matter.

Analysis:
1. The petition was filed by the Revenue challenging the Tribunal's order allowing the provisional release of goods, specifically tires, under certain conditions. The Petitioner contended that the Tribunal failed to consider test reports from IRMRA and denied the investigating agency an opportunity to be heard, alleging a violation of natural justice principles.

2. During the writ petition hearing, it was revealed that the Revenue filed a rectification application before the Tribunal, highlighting the issue of non-consideration of IRMRA test reports. The Tribunal, in its order, noted that the Revenue failed to present the test reports during the original hearing and could not claim a mistake on record for rectification purposes.

3. The Tribunal's order emphasized that the Revenue's representative admitted during the rectification application hearing that the IRMRA reports were not filed earlier and were not brought to the Bench's notice during the main appeal hearing. The same representative appeared for both proceedings, raising questions about the handling of the evidence.

4. The Court expressed concern over the representative's contradictory statements regarding the availability of test reports and the failure to present them earlier. It deemed the matter serious, especially given the financial implications and the need for responsible exercise of power by department officials.

5. Consequently, the Court directed the Joint Chief Department Representative to conduct a detailed inquiry into the incident, identify those responsible, and recommend disciplinary actions if necessary. The matter was scheduled for further proceedings, with the Representative required to be present in Court and submit a compliance report.

6. The Court also instructed the Registry to send a copy of the order to relevant authorities for awareness and potential action. The need for a thorough investigation into the handling of evidence and the responsible parties was emphasized, highlighting the importance of integrity and diligence in exercising departmental powers.