2007 (9) TMI 279 - HC - Customs

Appeal to Appellate Tribunal - Judicial discipline - Held that - It is the duty of Tribunal while hearing appeal both on facts and law to take note of all possible issues arising out of controversy and in particular legal issues and then decide them keeping in view the relevant provisions of law and decided cases on the issue involved. In the first instance, effort must be to find out whether issue involved is decided by any decision of Supreme Court in any case. If so then by virtue of Article 141 of Constitution of India, the issue must be decided strictly in accordance with law laid down by Supreme Court - it being the last word on the subject. If, there is no decision of Supreme Court on the issue then the effort must be to decide the issue either on first principle applicable to case or by any decision of High Court of our country if holding the field. Any departure from these principles renders the decision of Tribunal bad in law. Accordingly and in view of the casual manner in which the Tribunal disposed of the appeal and the fact that there has been no finding at all by any of the authorities on any of the issues urged, we allow the appeal and set aside the impugned order of Tribunal. As directed above, the case is remanded to Tribunal again for deciding the appeal on merits in the light of what is observed

Issues Involved:
1. Jurisdiction of the Commissioner to issue a show cause notice after the exemption notification was rescinded.
2. Validity of the withdrawal of the exemption once granted.
3. Limitation period for issuing the show cause notice under Section 28 of the Customs Act.
4. Compliance with procedural requirements and the applicability of relevant case law.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Commissioner to Issue Show Cause Notice:
The appellant contended that the show cause notice issued on 30-3-2000 was without jurisdiction since the exemption Notification No. 64/88 was rescinded by Notification No. 98/94 on 1-3-94. The appellant argued that in the absence of any saving clause in the rescinding notification, the exemption notification ceased to exist for any purpose, including initiating adverse actions against the assessee. The appellant relied on the Supreme Court decision in Kolhapur Cane Sugar Works Ltd. v. Union of India, which supports the view that no action could be taken based on a rescinded notification. The Tribunal did not address this issue, which was raised for the first time in this appeal.

2. Validity of Withdrawal of Exemption Once Granted:
The appellant argued that once the exemption was granted and availed of, the Commissioner had no jurisdiction to withdraw it, especially in the absence of fraud. The appellant maintained that the exemption, once granted on fulfilling the stipulated conditions, could not be recalled or withdrawn, particularly after the rescinding of the notification. This issue was not adequately addressed by the Tribunal.

3. Limitation Period for Issuing the Show Cause Notice:
The appellant contended that the show cause notice issued on 30-3-2000 was barred by limitation under Section 28 of the Customs Act. According to the appellant, the notice should have been issued within six months or one year from the date of clearance of goods, as stipulated in Section 28. Since the goods were imported in 1990-91 and the notice was issued after ten years, it was argued to be legally unsustainable. This issue was also not properly addressed by the Tribunal.

4. Compliance with Procedural Requirements and Applicability of Relevant Case Law:
The appellant criticized the Tribunal for deciding the appeal in a perfunctory and casual manner without considering relevant case law from the Supreme Court, such as Mediwell Hospital and Health Care Pvt. Ltd. v. Union of India and others. The Tribunal failed to take into account the legal principles established by these cases, which directly applied to the issues at hand. The Tribunal's decision lacked a thorough examination of the legal and factual questions involved.

Conclusion:
The High Court allowed the appeal, set aside the Tribunal's order, and remanded the case for a fresh decision on merits. The Tribunal was directed to consider all four points raised by the appellant and to decide the case in accordance with the law laid down by the Supreme Court and other relevant case law. The Tribunal was instructed to complete this process within four months, ensuring a comprehensive and judicious examination of the issues. The High Court refrained from expressing any opinion on the merits of the case to avoid prejudicing the remand process.

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