2022 (6) TMI 321 - AT - Customs

Review order is barred by time limitation or not - appeal filed by department before Commissioner (Appeals) is also barred by limitation or not - Section 129D of the Customs Act, 1962 - HELD THAT - Sub-section (3) provides that the review order has to be passed within a period of 3 months from the date of communication of decision or order of the adjudicating authority. On perusal of records, it is seen that the date of Order-in-Original is 31.05.2019. The date of dispatch is shown as 03.06.2019. The appellant contends that department would have received it on the same date and therefore the review order passed on 03.09.2019 is beyond 3 months. They have not adduced any evidence to show that the department has received the order passed by the Adjudicating Authority either on 31.05.2019 or on 03.06.2019 - the review order passed on 03.09.2019 is well within time. Consequently, the appeal filed by the department is also within the prescribed time limit. In any case, it is also necessary to state that proviso to sub-section (3) says that on sufficient cause being shown, the period can be extended by another 30 days on filing an application to condone the delay. The delay in the present case is less than 30 days. Conduct of personal hearing - whether hearing was not conducted in a proper manner as both the parties were not present at the same time in the virtual hearing conducted by the Commissioner (Appeals)? - HELD THAT - From the records, it is seen that department has filed a letter on 09.11.2020 informing that the grounds of appeal filed by the department may be taken on record as arguments for the department. In such case, it cannot be said that department has to appear in the online hearing. From the discussions made in the impugned order also, it is not seen that any new grounds were taken up by the department other than what they have stated in their grounds of appeal. The view taken by Commissioner (Appeal) that the matter has to be remanded for reconsideration does not require any interference - Appeal dismissed.

Summary

Issues Involved:

1. Timeliness of the Department's Appeal.
2. Conduct of Personal Hearing.
3. Merits of the Case regarding the imposition of penalty under Section 114(i) of the Customs Act, 1962.

Issue 1: Timeliness of the Department's Appeal

The appellant contended that the appeal filed by the Department before the Commissioner (Appeals) was time-barred. According to Section 129D(2) and (3) of the Customs Act, 1962, the review order must be passed within three months from the date of the adjudicating authority's order. The adjudicating authority's order was dated 31.05.2019, and the appellant argued that the Department received it on the same date or on 03.06.2019, making the review order dated 03.09.2019 beyond the three-month period. However, the Department claimed they received the order on 17.06.2019, making the review order within the prescribed time limit. The Tribunal found no evidence to contradict the Department's claim and upheld that the review order was within the time limit. Furthermore, the Tribunal noted that even if there was a delay, it was less than 30 days, which can be condoned under the proviso to sub-section (3) of Section 129D.

Issue 2: Conduct of Personal Hearing

The appellant argued that the personal hearing was not conducted properly as both parties were not present simultaneously during the virtual hearing. The Department had informed via a letter dated 09.11.2020 that their grounds of appeal should be taken on record and they did not wish to make further submissions. The Tribunal acknowledged that while the conduct of the hearing was irregular, no prejudice was caused to the appellant as the Department had not introduced any new grounds beyond their initial appeal.

Issue 3: Merits of the Case

The appellant argued that there was no evidence proving their involvement in the smuggling of red sanders and that any violations fell under the Customs Brokers' Licensing Regulations (CBLR), 2013, not under Section 114 of the Customs Act, 1962. The adjudicating authority had initially found no evidence of abetment in the smuggling plan and dropped the penalty proposal under Section 114(i). However, the Commissioner (Appeals) found that the appellant had filed shipping bills with serious misdeclarations and misused the IEC of M/s. Polyhose India (Rubber) Private Ltd. without proper KYC verification, thereby attracting penalty under Section 114. The Tribunal upheld the Commissioner (Appeals)'s decision to remand the matter for reconsideration, citing the appellant's failure to verify the exporter's antecedents and the serious nature of the smuggling attempt. The Tribunal referenced the decision in Sri Rama Thenna Thayalan, which held that CHAs involved in misdeclaration and smuggling of prohibited goods could be penalized under Section 114 of the Customs Act, 1962, in addition to any action under CBLR.

Conclusion:

The Tribunal dismissed the appeal, upholding the Commissioner (Appeals)'s order to remand the matter for reconsideration of the imposition of penalty under Section 114(i) of the Customs Act, 1962.