Calcutta High Court
The Commissioner Of Customs (Port) ... vs M/S.Aman Exports on 6 July, 2018
Author: Aniruddha Bose
Bench: Aniruddha Bose, Amitabha Chatterjee
ORDER SHEET
CUSTA NO.25 OF 2018
GA NO.1561 OF 2018
IN THE HIGH COURT AT CALCUTTA
SPECIAL JURISDICTION(CUSTOMS)
ORIGINAL SIDE
.
THE COMMISSIONER OF CUSTOMS (PORT) KOLKATA Versus M/S.AMAN EXPORTS BEFORE:
The Hon'ble JUSTICE ANIRUDDHA BOSE The Hon'ble JUSTICE AMITABHA CHATTERJEE Date : 6th July, 2018.
MR.SOMNATH GANGULI, MRS.SANJUKTA GUPTA, MR.SUDIPTA GHOSH, MS.SABNAM BASU, ADVOCATES FOR APPELLANT MR.MAINAK BOSE, MR.SHAKEEL MOHAMMED AKHTER, ADVOCATES FOR RESPONDENT The Court : The present appeal by the Revenue is against a decision of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) directing in substance dilution of the terms for provisional release of certain electronic goods under section 110A of the Customs Act, 1962. These goods were seized on the allegation of mis-declaration. Mr.Bose, learned counsel appearing on behalf of the assessee has raised the question of maintainability of this appeal. According to him, the appeal relates to dispute on valuation of goods and hence the Hon'ble 2 Supreme Court is the proper forum for adjudicating this appeal under Section 130E of the Customs Act, 1962. The point on which Revenue wants us to admit this appeal, however, is on jurisdiction of the CESTAT to reduce the security amount determined by the Adjudicating Authority. According to him, this question involves substantial question of law.
We have considered the submissions of learned counsel appearing for the parties. The dominant question here is on jurisdiction of the Tribunal to reduce the security terms for provisional release of the goods and the dispute per se is not on valuation of the seized goods. The core issue involved in this appeal is whether the Tribunal has the power or jurisdiction to dilute the terms set by the adjudicating authority for provisional release of goods. As such, we decline to accept the submission of the assessee that the question involves or relates to value of the goods. That dispute is incidental to the main issue. We accordingly admit the appeal on following point, which in our opinion involves substantial question of law:-
"Whether the Appellate Tribunal has jurisdiction to dilute the security terms for provisional release of goods having regard to the provisions of Section 110A of the Customs Act read with Section 2(1) thereof."
In this case, the seized goods were permitted to be released by the adjudicating authority on following terms:- 3
"11.1 For Bill of Entry No.3033470 dated 29.08.2017
(i) Execution of Bond for the value of Rs.2,84,31,400/-
(ii) Execution of Bank Guarantee (with auto-renewal clause)/Security Deposit for estimated differential duty and probable fine and penalty under provisions of the Customs Act'1962 of Rs.1,59,37,000/-(Rs. One Crore Fifty Nine Lakh Thirty Seven Thousand only) 11.2 For Bill of Entry No.3081944 dated 02.09.2017
(i) Execution of Bond for the value of Rs.1,03,02,445/-
(ii) Execution of Bank Guarantee (with auto-renewal clause)/Security Deposit for estimated differential duty and probable fine and penalty under provisions of the Customs Act'1962 of Rs.63,00,000/-(Rs.Sixty Three Lakh only)"
The assessee went up in appeal before the Tribunal with the grievance of enhancement of actual value of the goods by the adjudicating authority without providing any basis thereof. The Tribunal, inter alia, held and directed in the decision under appeal:-
"7. Taking the totality of the facts before us, we are of the view that unless and until the evidence of the estimated price per piece is submitted to the importer or before the Bench by the Revenue, the appeal could not be taken as for final hearing.4
8. The prayer of the appellant is to allow the provisional release of goods and to reduce the bank guarantee bond by the Commissioner. We, therefore, order that bank guarantee shall be reduced to Rs.20.00 Lakhs for Bill of Entry No.3033470 and Rs.15.00 Lakhs for Bill of Entry No.3081944. The Bonds shall be executed for on the full value of the goods. The goods in question shall be released accordingly as per the provisions of the Customs Act."
Referring to provisions of Section 110A of the Act, Mr.Ganguli has argued that it is the sole domain of adjudicating authority to determine the security and conditions for release of goods. He has drawn our attention to Section 2(1) of the Act which defines "adjudicating authority"
and has pointed out that this definition specifically excludes the Board, Commissioner(Appeals) or Appellate Tribunal. His submission is that since the power or authority to set the terms of provisional release of seized goods vests in the adjudicating authority under the statute, the Tribunal in exercise of appellate jurisdiction cannot alter such terms. Basic submission of Mr.Ganguli is that in laying down fresh terms for security, the Tribunal had assumed the jurisdiction of adjudicating authority which is impermissible in law.
Section 129A of the Act stipulates, inter alia, that any person aggrieved by a decision or order passed by the Principal Commissioner of Customs or Commissioner of Customs as an adjudicating authority may appeal to the Appellate Tribunal. The order for provisional release of goods 5 fits the character of an order of an adjudicating authority. Now, the question arises as to whether while hearing an appeal from an order of the adjudicating authority, the appellate Tribunal is altogether barred from entering into the question of testing if the security terms were too stringent or not for provisional release of goods. The decision of the authority of first instance while exercising power under Section 110A of the Act would include power to lay down the terms of security. If the assessee or the Revenue is aggrieved by the security terms specified by the adjudicating authority and approaches the Tribunal, if the Tribunal is denuded of the power to test the legality of the security terms, in our opinion, the appeal provision to a large extent would be rendered otiose. Section 129B of the Act empowers the Appellate Tribunal to confirm, modify or annul the decision appealed against. Alteration of terms of security in the manner it has been done in the case of assessee would constitute modification of the decision of the adjudicating authority.
When provision for appeal is provided under the Act against a decision of the adjudicating authority, there cannot be an interpretation which would result in exclusion of security terms from the purview of the Appellate Authority. To restrict the power or jurisdiction of the Appellate Authority on that count, there has to be specific statutory provision. The provision for appeal under the 1962 Act does not prescribe such restriction. The security terms specified in an order of the adjudicating authority forms part of the decision and if there is provision for appeal 6 against that decision, that part of the decision would also come within the jurisdiction of the Appellate Authority for determination of correctness thereof. As we have already observed, the statute specifically empowers the Appellate Tribunal to modify the decision under appeal.
Power for laying down the security terms and conditions has been vested under the Act in the adjudicating authority and the Board or the first and second Appellate Authorities have been specifically excluded from the ambit of the expression adjudicating authority. On this basis, it was argued by the Revenue that modification of security terms was impermissible. In our view, however, import of the provisions of Section 110A and 2(1) of the Act would remain confined to laying down the terms at the first instance and the exclusivity of the adjudicating authority to determine that question cannot extend to an appeal proceeding, where the decision of the adjudicating authority can be modified under the aforesaid provision of the statute.
Having determined the law on the point raised by Mr. Ganguli, we shall now address the decision of the Tribunal on merit. The reasoning of the Tribunal appears from paragraphs 2, 3 and 4 of the decision. The Tribunal has held:-
"2. In the instant case, the Adjudicating Authority has allowed provisional release of goods in terms of para 11.1 and para 11.2 in 7 respect of Bill of entry No.3033470 dated-29.08.2017 and Bill of entry No.3081944 dated-02.09.2017.
3. Ld Advocate has submitted before us that value has been enhanced without providing them the basis on which such enhancement has been done by the adjudicating authority. In the instant case, the value declared was enhanced on the basis of NIDB data obtained from DGOV and they did not dispute it. In the meanwhile the consignment was inspected by the DRI on the specific information that the imported goods value needs to be further enhanced to the extent of value mentioned in the adjudication order. The Adjudicating Authority allowed provisional release on the basis of valuation made by the DRI, stated to be "estimated price per piece"; as per the examination of the adjudication order. The DRI has not provided the basis on which this estimated price has been arrived.
4. The Ld. D.R. for the Department has stated that there was a specific information about the price with the DRI. However, the same is not available with him and the same shall be produced at the time of final hearing."
Main ground on which this decision is assailed on merit is that it was DRI who had conducted the search and seizure proceeding and without going through their materials on valuation, it was improper on the 8 part of the Tribunal to lay down fresh security terms. We are satisfied that the Tribunal ought to have examined this question in greater detail. Neither the decision of the adjudicating authority nor the Tribunal reflect the manner in which valuation of goods were done, which had its impact in laying security terms.
For this reason we remand the matter to the Tribunal setting aside the decision under appeal and direct the Tribunal to rehear the matter within a period of four weeks from the date of communication of this order.
DRI shall be at liberty to intervene before the Tribunal and it shall be open to the Tribunal to re-examine the security terms upon hearing the parties before it.
The appeal and the stay petition stand allowed to the above extent. No order as to costs.
(ANIRUDDHA BOSE, J.) (AMITABHA CHATTERJEE, J.) sb.