Madras High Court
National Oxygen Limited vs The Customs on 10 July, 2008
Author: K.Raviraja Pandian
Bench: K.Raviraja Pandian
IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 10.07.2008 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJA Writ Appeal No.1354 of 2002 National Oxygen Limited represented by its Managing Director, Mr.G.N.Saraf 80, Greams Road, Chennai 6. ..... Appellant v. 1.The Commissioner of Customs Customs House, Chenai 600 001 2.Customs, Excise and Gold (Control) Appellate tribunal Southern Zonal Bench, represented by its Registrar Sastri Bhavan, Annexe Building (PF) Haddows Road, Chennai 600 006. .... Respondents Writ Appeal filed under clause 15 of the Letters Patent against the order of the learned single Judge dated 26.2.2002 made in Writ Petition No.1582 of 1998. For appellant : Mr.R.Krishnamurthy,Sr.Counsel for M/s.Anand, Abdul and Vshod Associates For Respondents : Mr.V.Bharathidasan,SCCG JUDGMENT
(Judgment of the Court was made by K.RAVIRAJA PANDIAN, J. ) The correctness of the order dated 26.2.2002 made in Writ Petition No.1582 of 1998 non-suiting the appellant to quash the order of the Customs, Excise and Gold (Control) Appellate Tribunal, (hereinafter referred to as "CEGAT") dated 20.1.1998 imposing a pre-condition of payment of fifty percent of the differential duty in a sum of Rs.37,50,000/- for setting aside the order in original dated 24.7.1997 of the first respondent is put in issue in this appeal.
2. The facts of the case are as follows:
The appellant imported two second hand air separation plant of US origin and one Deoxo Argon Purifier of the year 1965 and 1968 respectively vide Bill of Entry Nos.20821 dated 24.5.1994, 22225 dated 1.7.1994 and 20282 dated 23.6.1994 respectively. The appellant sought the assessment of the consignment under Notification Nos.90/94 and 91/94. The bills of entry were assessed provisionally under Section 18 of the Customs Act, 1962 and were cleared out of customs. It appears that on the basis of information supplied by the Directorate of Revenue Intelligence, a show cause notice was issued to the appellant on 31.10.1996 and the Commissioner of Customs, Chennai by his order in original imposed customs duty of Rs.73,23,578/- by enhancing the value of consignment to Rs.3,47,37,377/-. He ordered for the confiscation of the goods under Section 111(m) of the Customs Act, 1962 but allowed to be redeemed on payment of fine of Rs.10 lakhs and also imposed a penalty of Rs.5 lakhs on the appellant under Section 112 of the Customs Act. As against the said order, the appellant filed appeal before the second respondent CEGAT. The second respondent by order dated 20.1.1998 has concluded as follows:
".... In this connection, we are of the view that this is a fit case which requires to be remanded for considering the plea of the appellants with respect to the fact that this original certificate of the Chartered Engineer pertains to a machine which was made in the year 1965 or was made in the year 1994...."
3. Having reached such conclusion, the second respondent ultimately passed the following order:
"...18. Taking into consideration the overall aspects of the case, we hereby order that on the applicant's depositing a sum of Rs.37,50,000/- (Rupees thirty seven lakhs fifty thousand only) on or before 30.3.1998 and report compliance before the adjudicating authority on or before 31.3.1998 in which case the impugned order shall stand set aside and the adjudicating authority should de novo adjudicate the same after granting a personal hearing to the appellants. In de novo adjudicating the same, the adjudicating authority should consider about the certificate of the Chartered Engineer, which is filed in the Paper Book from Pages 37 to 43 and he should deal with this plea of the appellants as to whether it is a Certificate pertaining to the machine, which was made in the year 1965 or whether it is a certificate with respect to a machine made in the year 1994. He is at liberty to make necessary enquiries in this regard with respect to the above said certificates and he should discuss the plea of the appellant in this regard with the appellant has made in para 2.2 of the reply. The appellant is also at liberty to produce such evidence as they deem fit in this regard to justify their stand. After considering this certificate the depreciation method should be worked out. ...."
The appellant put in issue the said order in the writ petition. The learned single Judge non-suited the appellant for the relief prayed for.
4. Before us, it is contended by Mr.R.Krishnamurthy, learned Senior Counsel appearing for the appellant that the imposition of the condition precedent for setting aside the order and remitting back the matter for de novo consideration is impermissible as per the statutory provision Section 129B of the Customs Act. Having reached the conclusion that the order in original requires to be set aside and remanded back to the original authority for de novo consideration, the second respondent can only give direction as stated above how to further proceed with the enquiry and imposing condition precedent for setting aside the order is not in accordance with the statutory provision.
5. On the other hand, the learned counsel appearing for the Department contended that the writ petition itself is not maintainable as during the relevant period, under Section 130 of the Customs Act, if the importer has not accepted the order of the CEGAT, he can request the CEGAT to make a reference to the High Court by raising a question of law. Without following statutory remedy, filing a writ petition under Article 226 of the Constitution of India is nothing but short-circuiting the statutory remedy, which has been deprecated by this Court as well as the Supreme Court in several cases. He relied on a decision of the Division Bench of this Court in the case of M/S.NIVARAM PHARMA PRIVATE LIMTIED REPRESENTED BY ITS DIRECTOR SARDARMAL M.CHORDIA, MADRAS VS. THE CUSTOMS, EXCISE AND GOLD (CONTROL) APPELLATE TRIBUNAL, SOUTH REGIONAL BENCH, MADRAS AND OTHERS, (2005) 2 M.L.J. 246. On merits, he contended that Section 129B of the Customs Act empowers the Tribunal to impose, what ever direction it thinks fit in the interest of justice and hence the imposition of pre-condition directing the appellant to deposit fifty percent of the differential value is strictly in accordance with the power vested on the Tribunal.
6. We heard the argument of the learned counsel on either side and perused the materials on record.
7. From the above contentions, the points that have arisen for consideration in the appeal are as follows:
1. Whether there is any impediment on the part of the appellant to approach this Court seeking a remedy under Article 226 of the Constitution of India when a remedy by way of reference under Section 130 of the Customs Act is available?
2. Whether the order of the second respondent imposing pre-condition of fifty percent differential duty for setting aside the order in original is in accordance with the provisions of Section 129B of the Customs Act?
Point No.1:
8. On a reading of the order impugned in this appeal, it is clear that the point as to the maintainability of the writ petition has never been argued by the Department either at the time of admission of the writ petition in the year 1998 or at the time of final disposal of the writ petition in the year 2002. Even in the counter affidavit filed by the Assistant Commissioner, the availability of alternative remedy has not been projected as an impediment for the appellant to file the writ petition.
9. Having allowed the writ petition to be entertained by this Court in the year 1998, even at the time of final disposal, without taking any objection as to the maintainability of the writ petition on the ground of alternative remedy, it is not open to the respondent Department to project the point of alternative remedy to reject the appeal,.
10. The writ jurisdiction of the High Court under Article 226 is very wide jurisdiction, which cannot be controlled by any other statutory provision. The restriction not to entertain a writ petition when there is an alternative remedy is only a self imposed restriction. It is true there are umpteen number of cases by this Court as well as the Supreme Court directing the petitioner to approach the statutory authorities, where ever there existed disputed question of fact so that the authority empowered to decide the factual issue in performing the duty could decide the same. The High Court while exercising the power under Article 226 perform the functions of the judicial review of the orders passed by the lower authorities. It is true, in the cited case, the Division Bench of this Court has held as follows:
"...4. We are surprised that this writ petition was entertained at all. There was a clear alternative remedy against the order of the CEGAT dated 9.7.1997 by means of filing a Reference Application before the CEGAT under Sec.35-G(1) of the Central Excise Act (hereinafter referred to as the Act) and if that application was rejected by the CEGAT there was a second alternative remedy of approaching this Court under Sec.35-G(3) of the Act seeking a direction to the CEGAT to make a reference to this Court.
5. It is well settled by a series of decisions of the Supreme Court that particularly tax matters there should be no short circuiting of the statutory remedies. ...."
11. There is another line of judgments of Supreme Court to the effect that when there is no factual dispute and only issue to be decided is, a question of law or interpretation of a statute, the availability of the alternative remedy cannot be regarded as a factor impinging upon the jurisdiction of the High Court to deal with the matter itself, if it is in a position to do so on the basis of the averments made in the affidavit. The Supreme Court went on to the extent of saying that even when an alternative remedy has been availed by the party and not pursued and rather withdrawn, the party could prosecute the proceedings under Article 226 of the Constitution of India for the very same relief or for rather a larger relief. The Supreme Court in the case of S.J.S. Business Enterprises (P) Ltd. v. State of Bihar,(2004) 7 SCC 166, held as follows:
"The existence of an adequate or suitable alternative remedy available to a litigant is merely a factor which a court entertaining an application under Article 226 will consider for exercising the discretion to issue a writ under Article 226, A.N.VENKATESWARAN VS. RAMCHAND SOBHRAJ WADHWANI, (AIR 1961SC 1506). But the existence of such remedy does not impinge upon the jurisdiction of the High Court to deal with the matter itself if it is in a position to do so on the basis of the affidavits filed. If, however, a party has already availed of the alternative remedy while invoking the jurisdiction under Article 226, it would not be appropriate for the court to entertain the writ petition. The rule is based on public policy but the motivating factor is the existence of a parallel jurisdiction in another court. But this Court has also held in Chandra Bhan Gosain v. State of Orissa ((1964) 2 SCR 879 = 14 STC 766)) that even when an alternative remedy has been availed of by a party but not pursued that the party could prosecute proceedings under Article 226 for the same relief. This Court has also held that when a party has already moved the High Court under Article 226 and failed to obtain relief and then moved an application under Article 32 before this Court for the same relief, normally the Court will not entertain the application under Article 32. But where in the parallel jurisdiction, the order is not a speaking one or the matter has been disposed of on some other ground, this Court has, in a suitable case, entertained the application under Article 32, TILOKCHAND MOTICHAND VS. H.B.MUNSHI (1969) 1 SCC 110. Instead of dismissing the writ petition on the ground that the alternative remedy had been availed of, the Court may call upon the party to elect whether it will proceed with the alternative remedy or with the application under Article 226, K.S.RASHED AND SEN VS. INCOME TAX INVESTIGATION COMMISSION, (AIR 1954 SC 207). Therefore, the fact that a suit had already been filed by the appellant was not such a fact the suppression of which could have affected the final disposal of the writ petition on merits.
12. Further, the power vested with the High Court under Article 226 of the Constitution to exercise judicial superintendence over the decisions of all Courts and tribunals is part of basic structure of the Constitution. Such an inviolable jurisdiction of the Court cannot be said to be impinged because of availability of alternate remedy. ( vide Seven Judges Judgment of the Supreme Court in L.Chandra Kumar case (1997(3) SCC 261).
13. In view of the above categorical enunciation of law by the Supreme Court and having regard to the issue to be resolved in this case, which is pure and simple interpretation of the scope of the statuary provision, we are of the considered view that the appellant should not be thrown away on the ground of alternative remedy, after passage of one decade. Hence, Point No.1 is answered in the negative and in favoaur of the appellant.
Point No.2:
14. Now, let us deal with the second point. The relevant provision - Section 129B of the Customs Act reads as follows:
"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 direction as the Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary.
(bold supplied)
15. As per the above provision, while considering the appeal, the Tribunal is vested with the power to (1) confirm the order appealed against; (2) modify the order appealed against; or (3) annul the decision or order appealed against; or (4) refer the case back to the authority, which passed such decision or order. While so referring, the Tribunal can issue such direction as it thinks fit for the adjudication or decision, as the case may be.
16. The Tribunal by an elaborate order after discussing the issues raised before it recorded a finding that the appeal before it was a fit case for remitting back to the original authority. The basis for recording such a finding is also stated as that the order appealed against before it was not a speaking order; that it has not answered the plea raised by the appellant; and that it has not discussed the relevant material i.e., the Chartered Engineer's certificate to find out whether the price mentioned therein was the price in respect of machine manufactured in the year 1965 or 1994. After reaching such a conclusion, the only power that could be exercised by the Tribunal is, to refer the case back to the authority, which passed such decision or order with such direction as the appellate Tribunal may think fit for afresh adjudication or decision, as the case may be, after taking additional evidence, if necessary. Rightly, in this case, certain directions were given by the Tribunal to the adjudicating authority how to proceed with the de novo adjudication as extracted in paragraph No.3 above. But the imposition of pre-condition for setting aside the order i.e., directing the appellant to deposit 50 percent of the differential value on or before particular date is, in our view, not in accordance with the statutory provision. The statutory provision does not empower the Tribunal to impose such a condition for setting aside the order appealed and remit back to the adjudicating authority. It is needless to say that the Tribunal is a creation of the statute and it has to perform its function in accordance with the power conferred on it. Giving direction to the original authority while remitting back the matter is one thing to which it is empowered but imposing a pre-condition is a different thing with which no power has been vested with the Tribunal.
17. There is a ocean of difference between the terminology "direction" to the lower authorities to do de novo adjudication proceedings in a particular way and the terminology "pre-condition" imposing for setting aside the order appealed. The direction means giving certain guidance or command. The condition is a thing on whose fulfillment another thing or act is made to depend. "Condition" is a restraint or bridle annexed and joined to a thing so that by the non-performance or not doing of the same, certain contingent event would not happen.
18. As per Section 129B of the Customs Act, the Tribunal is vested with the power either to confirm or modify or annul the decision of order appealed against. In the facts of the case, the Tribunal did not think fit either to confirm or modify or annul the decision appealed against, but thought it fit with supporting reason, to refer the case back to the authority, which passed such decision or order. In the absence of any power vested on the Tribunal to impose condition, rather a pre-condition for setting aside the order appealed against, the pre-condition imposed by the Tribunal can only be regarded as arbitrary, and without any statutory backing. The terminology "as it thinks fit" cannot be interpreted independently without having any regard to the subsequent terminology used in the provision such as confirming, modifying or annulling the decision. The terminology "as it thinks fit" would only mean to empower the Tribunal either to confirm or to modify or to annul the order appealed against. That would not clothe the Tribunal with the power to refer for the purpose of remitting back the case with a direction to conduct de novo enquiry by imposing pre-condition. Our conclusion is also fortified by the fact that of setting aside the order appealed against, the liability of the appellant to pay the differential duty has also merged with the order of setting aside, in the sense, that until a de novo enquiry is conducted and ultimate decision is rendered, the appellant is not liable to pay any differential duty or duty imposable on the goods imported has not been quantified or determined finally. When there is no liability on the part of the importer, the direction to pay fifty percent of the differential value based on order, which has been set aside, is nothing but arbitrary exercise of power.
19. For the fore-going reasons, the order of the learned single Judge dated 26.2.2002 made in W.P.No.1582 of 1998 is set aside and that part of the order of the Tribunal directing the appellant to pay fifty percent of the differential duty in a sum of Rs.37,50,000/- for getting order of set aside the order of the adjudicating authority is hereby set aside by allowing the writ appeal. However, there is no order as to costs.
usk To
1. The Commissioner of Customs Customs House, Chenai 600 001
2. Customs, Excise and Gold (Control) Appellate tribunal Southern Zonal Bench, represented by its Registrar Sastri Bhavan, Annexe Building (PF) Haddows Road, Chennai 600 006