2016 (1) TMI 145 - AT - Customs

Condonation of delay - Evasion of custom duty - penalty was sought to be imposed, upon the Customs Officers, they were indisputably the necessary parties and not merely proper parties. - Held that - It is seen that the applications for impleadment of officers were made in October 2012 i.e. after almost 15 months from the date of that CESTAT order (dated 22.07.2011) while the time granted was only 6 weeks (up to 29.8.2011). Having thus totally failed to comply with the said order of CESTAT, the Revenue s ability to take shelter there-under is completely jeopardised. Revenue s applications for impleadment of the Custom officers as necessary parties tantamount to filing of fresh appeals against them. Thus the net, indeed the only, effect of such applications for impleadment of customs officers is that these appeals against the Customs officers essentially have to be reckoned as if these were filed on the date of filing of the applications seeking their impleadment. In the applications filed in 2012, no reasons (beyond saying administrative reasons ) even remotely satisfactory have been given to explain the delay of so many years with reference to the date of the impugned order-in-original, or even the delay of more than one year with reference to CESTAT order dated 22.7.2011 against only 6 weeks allowed by CESTAT. Thus we find not even an iota of reasonable ground on the basis of which such inordinate delay can be condoned even by adopting the most liberal approach in this regard. - in the absence of the necessary parties namely the Customs officers, those (i.e. the appeals also cannot be sustained - Decided against Revenue.

Summary

Issues Involved:
1. Whether the Revenue's appeals filed in 2007 were duly instituted according to law since necessary parties were not impleaded.
2. Whether applications filed in 2012 for impleadment of the necessary parties (the affected officers) could be considered without determination of existence of justifiable reasons for failing to implead them in the first instance.
3. Whether the Misc. applications for impleadment could be heard without notice to the affected officers, sought to be now impleaded.

Issue-wise Detailed Analysis:

1. Whether the Revenue's appeals filed in 2007 were duly instituted according to law since necessary parties were not impleaded:

The appeals were filed by the Revenue against adjudication orders passed by the Commissioner of Customs, Delhi, without impleading the Customs officers against whom penalties were sought. The Tribunal noted that the Custom officers were necessary parties as the penalties were sought to be imposed upon them. The Tribunal cited the Full Bench of the High Court of Allahabad in Benares Bank Ltd. Vs. Bhagwandas, which laid down two tests for determining whether a party is necessary: (i) there must be a right to some relief against such party in respect of the matter involved in the proceedings, and (ii) it should not be possible to pass an effective decree in the absence of such a party. The Custom officers satisfied both conditions, making them necessary parties. The Tribunal also referenced Supreme Court decisions in Prabodh Verma Vs. State of U.P., Ishwar Singh.Vs. Kuldip Singh, and J. Jose Dhanapaul Vs. S. Thomas, which emphasized the necessity of impleading parties who would be vitally affected by the judgment. Therefore, the Tribunal concluded that the appeals filed in 2007 were not duly instituted according to law due to the non-impleadment of necessary parties.

2. Whether applications filed in 2012 for impleadment of the necessary parties (the affected officers) could be considered without determination of existence of justifiable reasons for failing to implead them in the first instance:

The Tribunal observed that the applications for impleadment of officers were filed in October 2012, almost 15 months after the CESTAT order dated 22.07.2011, which had granted six weeks to amend the appeal memo and serve the appeal memo on the Customs officers. The Tribunal found that the Revenue failed to comply with this order and did not provide satisfactory reasons for the delay, beyond citing "administrative reasons." The Tribunal held that the delay was inordinate and could not be condoned, even by adopting a liberal approach. Consequently, the applications for impleadment of the Custom officers were rejected.

3. Whether the Misc. applications for impleadment could be heard without notice to the affected officers, sought to be now impleaded:

The Tribunal noted that the Hon'ble Delhi High Court, in its judgment dated 30.4.2010, set aside the CESTAT's Order dated 18.6.2009 and the original adjudication Order dated 21.12.2009 to the extent of penalty imposed on the Customs officers. The High Court directed the Tribunal to pass a fresh order in the appeals of the Department against the petitioners after giving an opportunity of hearing to the parties. The Tribunal interpreted this as requiring the Customs officers to be heard, which was not done initially. The Tribunal also referenced the Supreme Court decision in Udit Marain Vs. Board of Revenue, which emphasized the necessity of hearing parties who would be affected by the judgment. Thus, the Tribunal held that the Misc. applications for impleadment could not be heard without notice to the affected officers.

Conclusion:

The Tribunal concluded that the appeals filed by the Revenue in 2007 were not duly instituted according to law due to the non-impleadment of necessary parties, namely the Customs officers. The applications for impleadment filed in 2012 were rejected due to inordinate delay without satisfactory reasons. Consequently, the appeals, in the absence of necessary parties, could not be sustained and were dismissed.