Delhi High Court
Commissioner Of Customs vs M/S Lindt Exports on 27 September, 2011
Author: A.K.Sikri
Bench: A.K. Sikri, Siddharth Mridul
* THE HIGH COURT OF DELHI AT NEW DELHI
% Decision Delivered On: 27th September, 2011
+ CUS AA No. 39 of 2011
COMMISSIONER OF CUSTOMS ... APPELLANT
Through: Mr. A.S. Chandhiok, ASG
with Mr.Satish Kumar, Adv.
VERSUS
M/S LINDT EXPORTS ... RESPONDENT
Through: Mr. Pradeep Jain,
Mr. Shubhankar Jha,
Mr.Tarun Chawla, Advs.
+ CUS AA No. 40 of 2011
COMMISSIONER OF CUSTOMS ... APPELLANT
Through: Mr. A.S. Chandhiok, ASG
with Mr.Satish Kumar, Adv.
VERSUS
M/S HIGH TECH ENGINEERS ... RESPONDENT
Through: Mr. Pradeep Jain,
Mr. Shubhankar Jha,
Mr.Tarun Chawla, Advs.
+ CUS AA No. 41 of 2011
COMMISSIONER OF CUSTOMS ... APPELLANT
Through: Mr. A.S. Chandhiok, ASG
with Mr.Satish Kumar, Adv.
VERSUS
RAJESH VERMA ... RESPONDENT
Through: Mr. Pradeep Jain,
Mr. Shubhankar Jha,
CUS AA No. 39-41/2011 Page 1 of 8
Mr.Tarun Chawla, Advs.
CORAM :-
HON'BLE MR. JUSTICE A.K. SIKRI
HON'BLE MR. JUSTICE SIDDHARTH MRIDUL
A.K. SIKRI, J. (ORAL)
1. It is not necessary to discuss the merits of the case as we are concerned with the impugned order passed by the Tribunal restoring the appeal of the respondent herein filed before the Tribunal on deposit of Rs.2.5 Crores which payment was directed to be deposited as condition precedent for hearing the appeal.
2. We may note at the outset that these appeals were dismissed by the Tribunal on the earlier occasion with the order of the pre-deposit not complied with. The revenue/appellant has filed these appeals challenging the common order dated 3rd June, 2011 passed by the CESTAT in Appeal Nos. 609/2006, 610/2006 and 611/2006. On the information received by DRI that the consignees at Russia, to whom various goods were being exported from India under repayment of State Credit Scheme, were either non-existent or had made no import/export operation, searches were carried out at the office of the respondents situated in Janakpuri, New Delhi. According to the CUS AA No. 39-41/2011 Page 2 of 8 Department, various incriminating documents and rubber stamps of various firms/companies were resumed under panchnama.
3. The investigation resulted that M/s Lindt Exports and one M/s High Tech Engineers, both of which were proprietorship concerns of Mr.Rajeev Verma had availed drawback amounting to Rs.20,90,13,652/- which included an amount of Rs.20,62,86,626/- on exports purportedly made by the respondents during 1998-2004. It was the allegation of the Department that there was no such exports made and these were shown to have been made to the parties which were non-existent.
4. Show cause notice was issued to the respondent demanding the fraudulently availed drawback of Rs.22 Crores. The respondent filed reply to the show cause notice. Thereafter, the matter was heard and the adjudicating authority passed order dated 31 st May, 2006 confirming the demand made in the show cause notice.
5. The respondents preferred appeals thereafter. Along with the appeals, respondents also preferred applications for stay of the impugned demand made by the Commissioner of Central Excise (Adjudication).
6. In this application, order was passed by the CESTAT on 29th December, 2006 directing the respondents to deposit Rs.2.5 Crores CUS AA No. 39-41/2011 Page 3 of 8 within eight weeks as against the demand of Rs.22 Crores. For compliance, the matter was fixed for 5th March, 2007. The respondents did not comply with the aforesaid directions which resulted in the dismissal of the appeals.
7. Against the aforesaid order passed by the Tribunal dismissing the appeals, the appellants approached this Court challenging the said orders. The appeals of the appellants were, however, dismissed by a Division Bench of this Court with the following concluded remarks:
"Against the order requiring the Appellants to refund the drawback amount, they preferred an appeal before the Tribunal which as already noticed required them to make a pre-deposit of Rs.2.5 Crores as a condition for hearing the appeal. Since the Appellants did not deposit the amount, the Tribunal by the impugned order dated 26th March, 2007 dismissed the appeals.
Given the facts and circumstances of the case as noticed hereinabove, we do not find any ground to interfere with the impugned order dated 26th March, 2007 or even the order dated 29th December, 2006 passed by the Tribunal concerning the pre-deposit. The Appellants have enriched themselves by Rs.22 Crores and could have surely deposited Rs.2.5 crores as required by the Tribunal.
No substantial question of law arises for determination.
Dismissed."
8. It is clear from the above that order of the Tribunal dismissing the appeals stood merged with the order of this Court which has CUS AA No. 39-41/2011 Page 4 of 8 affirmed the order of the Tribunal. In fact, the respondents had even preferred Special Leave Petition which was dismissed by the Supreme Court on 10.7.2007. Thus, the order of the Tribunal dismissing the appeals had attained finality.
9. Long after the matter rested with the respondents taking up the same up to Supreme Court, these respondents filed applications before the Tribunal for revival of the appeals on the ground that they were ready and in a position to deposit Rs.2.5 Crores as per the interim orders which was passed by the Tribunal during the pendency of the appeals before it. These applications have been allowed by CESTAT vide impugned orders dated 3.6.2011 on the ground that the appeals were dismissed for non-deposit of the said amount and once the appellants are making a pre-deposit of Rs.2.5 Crores as ordered, they should not be denied the opportunity to get the appeals heard on merits. This order is subject matter of challenge in the present appeals which are admitted on the following substantial questions of law:
"a) Whether the learned CESTAT has got jurisdiction under the provisions of the Customs Act, 1962 to restore the appeals dismissed by it four years ago, by reviewing its order particularly when the order passed by the CESTAT has merged with the order passed by the High Court in Appeal No. CUS A No.15/2007 which has attained finality?CUS AA No. 39-41/2011 Page 5 of 8
b) Whether the impugned order is non-est being passed by the learned CESTAT in exercising its powers under Section 129 of the Customs Act, 1962 especially when the CESTAT has not been conferred with the power of review and the order dated 26.3.2007 passed by the CESTAT has merged with order dated 9.10.2007 passed by this Court in Appeal No. CUS A No.15/2007 ignoring that as on the date of passing the impugned order, there was neither any order before the CESTAT for recalling nor any appeal pending for restoration.
c) Whether the impugned order does not amount to interference in the due process of the High Court of Delhi in so much as that the order dated 26.3.2007 passed by the CESTAT has merged with the order dated 9.10.2007 passed by this Court in Appeal No. CUS A No.15/2007 and, therefore, there was no order before the CESTAT for recalling and no appeal pending for restoration?
d) Whether the impugned order of the CESTAT suffers from illegality being contrary to the provisions of Section 129B(2A) of the Customs Act, 1962 which reads thus:
SECTION 129B. ORDERS OF APPELLATE
TRIBUNAL.-
(1) The Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary.
(1A) The Appellate Tribunal may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing:CUS AA No. 39-41/2011 Page 6 of 8
Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.
(2) The Appellate Tribunal may, at any time within six months from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1) and shall make such amendments if the mistake is brought to its notice by the Commissioner of Customs or the other party to the appeal:
Provided that an amendment which has the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the other party shall not be made under this sub-section, unless the Appellate Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard.
(2A) The Appellate Tribunal shall, where it is possible to do so, hear and decide every appeal within a period of three years from the date on which such appeal is filed:
Provided that where an order of stay is made in any proceeding relating to an appeal filed under sub-section (1) of section 129A, the Appellate Tribunal shall dispose of the appeal within a period of one hundred and eighty days from the date of such order:
Provided further that if such appeal is not disposed of within the period specified in the first proviso, the stay order shall, on the expiry of that period, stand vacated.
(3) The Appellate Tribunal shall send a copy of every order passed under this section to the Commissioner of Customs and the other party to the appeal.
(4) Save as otherwise provided in section 130 or section 130E, orders passed by the Appellate Tribunal on appeal shall be final."CUS AA No. 39-41/2011 Page 7 of 8
10. We have also heard the matter finally. It is clear from the narration of facts that CESTAT had dismissed the appeals finally vide orders dated 26.3.2007 and the said order was upheld by this Court as the appeals of the respondents were dismissed on 9.10.2007. Doctrine of merger, therefore, shall clearly apply and once the order of the Tribunal had attained finality and had been merged in the order of this Court, the Tribunal had become functus officio and had no jurisdiction to entertain the applications preferred for restoration of appeals. We, thus, answer the question in favour of the revenue and as a result, set aside the order of the Tribunal on this ground alone.
(A.K. SIKRI)
JUDGE
(SIDDHARTH MRIDUL)
SEPTEMBER 27, 2011 JUDGE
pk
CUS AA No. 39-41/2011 Page 8 of 8