2016 (3) TMI 36 - HC - Customs

Validity of order of the Commissioner reversed by Commissioner (Appeals)- Principle of natural justice- Dropping of the show cause notice proceedings qua the noticees other than Krishna Clearing since the Departmental appeal was confined only to the Krishna Clearing- Held that Facts are not serious in dispute with respect to the petitioners other than Krishna Clearing. The Commissioner having dropped the show cause notice proceedings qua other 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. Therefore, order against petitioners other than Krishna Clearing is quashed. Also, merely on the grounds of non-hearing of the concerned petitioners and on the appellate Commissioner having passed an order against the parties who were not respondents before him is not on merit of the issue involved. Decided in favour of petitioner

Issues involved:
Challenging order of Commissioner (Appeals) dated 12.10.2015, Appeal jurisdiction, Legal representation, Penalties under Customs Act, Confiscation of goods, Redemption fine, Confiscation of truck trailers, Penalties for Customs violations, Natural justice principles.

Analysis:

1. Challenging Order of Commissioner (Appeals):
The petitioners challenged the order of the Commissioner (Appeals) dated 12.10.2015 on two grounds. Firstly, they argued that the Commissioner (Appeals) exceeded his jurisdiction by allowing the appeal and reversing the order of the Commissioner dropping the show cause notice proceedings against parties other than Krishna Clearing, as the Departmental appeal was limited to the clearing agency. Secondly, they contended that the Commissioner (Appeals) failed to consider the contentions and authorities presented before him, rendering his order illegal.

2. Appeal Jurisdiction:
The Department's representative argued that a statutory appeal lies before the Tribunal against the order of the Commissioner (Appeals). It was emphasized that the Commissioner (Appeals) issued a speaking order, warranting no interference through writ jurisdiction.

3. Legal Representation:
The Commissioner (Appeals) considered the appeal only against Krishna Clearing, as the Department had appealed against this entity alone. The legal representative of Krishna Clearing duly presented detailed submissions during the appeal proceedings. However, the Commissioner (Appeals) extended his findings to all noticees mentioned in the show cause notice, including penalties and confiscations, despite no appeal being filed against the other noticees.

4. Penalties under Customs Act:
The Commissioner (Appeals) found Krishna Clearing liable for penalties under Section 114(A) of the Customs Act, 1962, along with other penalties and confiscations related to the alleged smuggling of cigarettes and other goods. The order specified penalties for individuals associated with Krishna Clearing as well.

5. Confiscation of Goods and Truck Trailers:
The order highlighted the confiscation of goods, including Heavy Melting Scrap and truck trailers, under relevant sections of the Customs Act. It also mentioned the possibility of redemption fines based on the circumstances of the case.

6. Natural Justice Principles:
The High Court emphasized the importance of natural justice principles in its decision. It ruled that the Commissioner (Appeals) erred in passing an order against parties who were not respondents before him, without any notice or appeal filed by the Department against these parties. The judgment stressed that such actions would violate the principles of natural justice.

In conclusion, the High Court quashed the impugned order dated 12.10.2015 concerning petitioners No.2 to 5, not based on the merits of the issues but due to the lack of hearing for these petitioners and the Commissioner (Appeals) passing an order against parties not represented before him. The petition was disposed of accordingly, with petitioner No.1 directed to pursue the statutory appeal remedy before the Tribunal.

← Previous Next →