2018 (10) TMI 482 - HC - Customs

Redemption of goods on payment of redemption fine - Smuggling of Gold - whether the appellant can be put in worse position in an appeal filed by him, when admittedly, the Department did not file an appeal against the order of the Commissioner (Appeals) exercising discretion under Section 125 of the Act and directing return of the gold, on payment of redemption fine of ₹ 15,00,000/-? Held that - Section 129A of the Act deals with appeals to Appellate Tribunal. In terms of Clause (b) of Sub-section (1) of Section 129A, an appeal is maintainable to the Tribunal against the order passed by the Commissioner (Appeals) under Section 128A of the Act. The appeal before the Tribunal in the instant case was that of the appellant. Subsection (2) of Section 129A gives power to the Department to prefer an appeal. The said provision states that if the Committee of Commissioners of Customs is of the opinion that the order passed by the Commissioner (Appeals) is not legal a proper, they can direct an appeal to be filed. Admittedly, in the instance case, the Chief Commissioner has not issued any direction nor formed an opinion that an appeal has to be filed against that portion of the order passed by the Commissioner (Appeals), allowing redemption of the seized gold - In the instance case, the Department neither exercised their power of filing an appeal under Sub-section (2), nor filed a cross objection on receipt of notice in the appeal filed by the appellant herein before the Tribunal. In such circumstances, could the Tribunal have exercised its powers and while dismissing the appellant s appeal, restore the order passed by the original authority, which stood modified by the order passed by the Commissioner of Customs (Appeals)? The power of the appellate Tribunal is exercisable under Section 129B(1) only against the decision or order appealed against and in doing so, it may pass such orders as it thinks fit affirming, modifying and annulling the decision or order appealed against - Admittedly, the Department did not file an appeal against the order of the Commissioner (Appeals) permitting the redemption of the seized gold. In such circumstances, the Revenue should not be said to be aggrieved by such a direction granting redemption and the Tribunal clearly erred in dismissing the appellant s appeal and restoring the order passed by the original authority. The matter is remanded to the Tribunal for a fresh decision on the appellant s appeal to test as to whether the Commissioner (Appeals) was right in fixing the market value of the gold on the date when he passed the order, when according to the appellant, the market rate prevailing on the date of seizure should be taken into consideration - appeal allowed by way of remand.

Issues:
1. Tribunal's suo motu resorting to order of Additional Commissioner of Customs without Department's appeal
2. Tribunal's decision on burden of proof regarding Department's case
3. Appellant's appeal against absolute confiscation of gold bars

Issue 1: Tribunal's suo motu resorting to order of Additional Commissioner of Customs without Department's appeal

The appellant raised substantial questions of law regarding the Tribunal's decision to resort to the order of the Additional Commissioner of Customs without any appeal from the Department. The Tribunal had not received any direction or opinion from the Chief Commissioner to file an appeal against the order of the Commissioner (Appeals). The Department did not exercise the option to file an appeal under Section 129A(2) or file a cross objection under Section 129A(4) within the specified time frame. The Tribunal's power under Section 129B(1) allows it to pass orders as it deems fit, but in this case, the Tribunal erred in dismissing the appellant's appeal and restoring the original authority's order without a Departmental appeal.

Issue 2: Tribunal's decision on burden of proof regarding Department's case

The Tribunal's decision on whether the Department had discharged the burden of proof was challenged in the appeal. The issue revolved around whether the appellant could be put in a worse position in an appeal filed by him, especially when the Department did not appeal against the order of the Commissioner (Appeals) allowing redemption of the gold bars. The Tribunal's power to pass orders as it deems fit under Section 129B(1) was discussed, emphasizing that the appeal heard was filed by the appellant and not the Department. The principle of "no reformatio in peius" was highlighted, stating that a person should not be placed in a worse position as a result of filing an appeal. The Tribunal's decision to dismiss the appellant's appeal and restore the original authority's order was deemed erroneous in this context.

Issue 3: Appellant's appeal against absolute confiscation of gold bars

The appellant's appeal was against the absolute confiscation of 22 gold bars and the imposition of a penalty by the Additional Collector of Customs. The appeal process involved modifications by the Commissioner (Appeals) allowing redemption of the gold upon payment of a fine. The Tribunal, in its impugned order, dismissed the appellant's appeal and restored the original order of absolute confiscation. The High Court allowed the appeal, setting aside the Tribunal's order, and remanded the matter for a fresh decision on the appellant's appeal regarding the market value of the gold bars. The remand was limited to this aspect for the Tribunal to decide in accordance with the law.

This detailed analysis of the judgment covers the issues raised in the appeal comprehensively, highlighting the legal arguments and decisions made by the Tribunal and the High Court.

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