2018 (3) TMI 935 - HC - Customs

Maintainability of appeal - Power of tribunal to refuse to entertain an appeal where fine or penalty does not exceed ₹ 2 lakhs - Section 129A of Customs Act, 1952 - Whether the Customs, Excise and Service Tax Appellate Tribunal was right in exercising discretion and in refusing to admit the appeal preferred by the appellant in exercise of discretion vested under proviso (iii) to sub-section (1) of Section 129A of Customs Act, 1952? Held that - Existence of power would not be a good justification and reason for the Tribunal not to exercise discretion in favor of the appellant when on similar and identical facts they have allowed the appeal preferred by another appellant for using the same script - Counsel for the respondent is correct when he asserts that the penalty imposed in the case of M/s. Singh World is more than ₹ 2.0 lakhs, therefore, their appeal could not have been dismissed under the proviso. The argument fails to notice and give due regard to the difference between existence of discretion and wrong and erroneous exercise of power conferred i.e. exercise of discretion. Tribunal has not correctly exercised the discretion under the proviso (iii) to sub-section 1 of Section 129A of the Act - matter is remanded to the Tribunal to hear the appeal on merits - appeal allowed by way of remand.

Issues:
1. Exercise of discretion by the Customs, Excise and Service Tax Appellate Tribunal in refusing to admit the appeal.
2. Interpretation of Section 129A of the Customs Act, 1952 regarding the Tribunal's jurisdiction.
3. Correct application of discretion by the Tribunal in admitting appeals based on penalty amounts.
4. Discrepancies in the treatment of appeals by the Tribunal for different parties in similar situations.

Analysis:
1. The case involved the Customs, Excise and Service Tax Appellate Tribunal's discretion in refusing to admit an appeal challenging a penalty imposed under the Customs Act, 1952. The Tribunal declined to hear the appeal as the penalty amount did not exceed the prescribed limit of two lakh rupees, citing Section 129A proviso (iii) of the Act. The appellant contested this decision, questioning the Tribunal's exercise of discretion in not admitting the appeal.

2. Section 129A of the Act outlines the scope of appeals to the Appellate Tribunal. The provision allows appeals against various orders, including those related to customs decisions. Proviso (iii) of sub-section 1 of Section 129A grants the Tribunal the discretion to refuse to admit appeals where the penalty amount does not exceed two lakh rupees. The Tribunal's exercise of this discretion was a central issue in the case.

3. The Court scrutinized the Tribunal's decision-making process regarding the exercise of discretion. It emphasized that while the Tribunal has the authority to use discretion in admitting appeals, this power must be guided by reasonableness and fairness. The Court highlighted the need for the Tribunal to provide clear reasons for its decisions and ensure consistency in treating similar cases. The judgment underscored the importance of avoiding arbitrary or whimsical exercise of discretion.

4. An important aspect of the judgment was the comparison drawn between the treatment of appeals for different parties facing similar circumstances. The Court noted that another appellant, M/s. Singh World, had its appeal allowed despite using the same script as the appellant in this case. The discrepancy in outcomes for parties facing comparable situations raised concerns about the Tribunal's application of discretion. The Court concluded that the Tribunal had not correctly exercised its discretion and remanded the matter for a fresh hearing.

In summary, the judgment delved into the Tribunal's discretion, the interpretation of relevant legal provisions, and the need for consistent and reasoned decision-making in similar cases. The Court's analysis focused on ensuring fairness and adherence to legal principles in the appellate process.

← Previous Next →