2016 (2) TMI 311 - HC - Customs

Levy of penalties under the Customs Act for the alleged acts of smuggling of cigarettes - Held that - With respect to petitioner No.1-Krishna Clearing, we are not inclined to entertain this petition in view of availability of alternative statutory remedy. We would relegate petitioner No.1 to such remedy before the Tribunal. With respect to rest of the petitioners, facts are not serious in dispute. The Commissioner having dropped the show cause notice proceedings qua these petitioners, the Department had not appealed against such order in their cases. The Departmental appeal was confined only to Krishna Clearing. The Commissioner (Appeals) in absence of other noticees could not have disturbed the order of Commissioner. Firstly, without any appeal being filed by the Department, it is questionable whether the Commissioner could have taken such a step. Secondly, in any case, without any notice, the other noticees had earned the verdict of dropping the proceedings. The appellate Commissioner could not have disturbed such order which would be plainly opposed to the principles of natural justice

Summary

Issues:
Challenge to order dated 12.10.2015 passed by the Commissioner (Appeals), Customs, Ahmedabad.

Analysis:

Issue 1: Challenge to Commissioner (Appeals) Order
The petitioners challenged the order dated 12.10.2015 passed by the Commissioner (Appeals), Customs, Ahmedabad. The Commissioner (Appeals) recorded findings regarding the culpability of the petitioners and remanded the proceedings to the Commissioner for a fresh decision due to insufficient facts. The order confirmed allegations against the petitioners, including confiscation of goods and imposition of penalties under various sections of the Customs Act, 1962. The Commissioner (Appeals) set aside the lower authority's order and directed penalties, confiscation, and redemption fines, if any, considering the gravity of the offense and modus operandi.

Issue 2: Grounds of Challenge
The petitioners raised two grounds to challenge the order. Firstly, they argued that the Commissioner (Appeals) exceeded jurisdiction by allowing the appeal and reversing the order dropping proceedings against noticees other than Krishna Clearing, as the Departmental appeal was limited to the clearing agency. Secondly, they contended that the Commissioner (Appeals) failed to consider their contentions and authorities cited, rendering the order illegal.

Issue 3: Department's Response
Counsel for the Department argued that statutory appeal lies before the Tribunal against the Commissioner (Appeals) order. She maintained that the order being a speaking one does not warrant interference through writ jurisdiction.

Issue 4: Disposition of Petition
The High Court declined to entertain the petition concerning Krishna Clearing due to the availability of an alternative statutory remedy, directing them to approach the Tribunal. For the other petitioners, the Court found no serious dispute in facts. Since the Department had not appealed against the dropping of proceedings against them, the Commissioner (Appeals) had no authority to disturb the order. The Court quashed the order against petitioners No. 2 to 5, emphasizing the lack of hearing and the appellate Commissioner's decision against non-respondent parties.

In conclusion, the High Court disposed of the petition based on the grounds of non-hearing and the Commissioner (Appeals) passing an order against parties not before him, without delving into the merits of the issues.