1991 (8) TMI 209 - AT - Customs

Summary

Issues Involved:
1. Jurisdiction of the Tribunal to grant stay during the pendency of Reference Application before the High Court.
2. Applicability of previous judgments and their relevance to the present case.
3. Distinguishability of the present case from cited cases.
4. Balance of convenience and potential unjust enrichment.
5. Jurisdictional question regarding cross-objection transfer to the Special Bench.
6. Impact of the High Court's reframed questions on the Tribunal's decision.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Tribunal to Grant Stay:
The Collector of Customs, Calcutta, filed a Stay Petition seeking to stay the operation of the Tribunal's orders. The applicant argued that the Tribunal has the power and jurisdiction to grant a stay during the pendency of the Reference Application before the High Court, citing the Supreme Court decision in I.T. Commissioner, Delhi v. Bansidhar. The Tribunal agreed, noting that the provisions of the Income-tax Act and the Customs Act are pari materia, thereby making the observations under the Income Tax Act applicable to the Customs Act.

2. Applicability of Previous Judgments:
The applicant contended that the Tribunal's order was primarily based on the Bombay High Court's orders, which were not applicable to the present case. The applicant distinguished the case of B. Vijoy Kumar, where the import was against a letter of credit opened after specific dates, from the present case, where no letter of credit was opened by the importers. The Tribunal considered these arguments and noted that the Supreme Court's decision in Prem Chand Samchand Shah v. Union of India indicated that the import of canalised items depends on the prevailing Import Policy at the time of import.

3. Distinguishability of the Present Case:
The applicant argued that the present case is distinguishable from the cases of Vijoy Kumar and Raj Prakash Chemicals. The applicant highlighted that the respondents had no reason to believe they were within their rights to import the goods, as their contract was concluded after the cut-off date and before relevant letters were issued. The Tribunal acknowledged these points and noted the differences in circumstances.

4. Balance of Convenience and Potential Unjust Enrichment:
The applicant argued that if the stay is not granted, the respondents would be unjustly enriched, and the Department would face difficulties in recovering the amounts. The Tribunal agreed, noting that the balance of convenience favored granting the stay, particularly since the respondents had already disposed of their assets and goods. The Tribunal also considered the interest of justice and potential difficulties in recovering the amounts if the case is ultimately decided in favor of the Department.

5. Jurisdictional Question Regarding Cross-Objection Transfer:
The applicant contended that the cross-objection filed by the Department should have been transferred to the Special Bench for simultaneous disposal with the appeal for enhancement of assessable value. The Tribunal noted that the High Court had reframed a question regarding the Tribunal's jurisdiction in transferring the cross-objection to the Special Bench. This issue was considered significant, as it involved the Tribunal's jurisdiction and the proper procedure for handling cross-objections.

6. Impact of the High Court's Reframed Questions:
The Tribunal noted that the High Court had reframed two questions of law, indicating that these questions arose out of the Tribunal's order. The Tribunal emphasized that the High Court's decision on these questions would impact the final disposition of the case. The Tribunal acknowledged that the reframed questions involved significant legal issues, including the Tribunal's jurisdiction and the correctness of its orders.

Conclusion:
The Tribunal concluded that there was a prima facie case for the Department and that the balance of convenience favored granting the stay. The Tribunal allowed the stay petition, staying the operation of its previous orders until the disposal of the Reference Applications by the High Court. This decision was made considering the potential difficulties in recovering amounts from the respondents and the legal questions pending before the High Court.