Gujarat High Court
The Principal Commissioner Of Customs vs Shantilal Javerchand Jain on 7 September, 2020
Equivalent citations: AIRONLINE 2020 GUJ 1890
Author: J.B.Pardiwala
Bench: Vikram Nath, J.B.Pardiwala
C/TAXAP/145/2020 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/TAX APPEAL NO. 145 of 2020
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THE PRINCIPAL COMMISSIONER OF CUSTOMS
Versus
SHANTILAL JAVERCHAND JAIN
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Appearance:
MR DHAVAL D VYAS(3225) for the Appellant(s) No. 1
for the Opponent(s) No. 1
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CORAM:HONOURABLE THE CHIEF JUSTICE MR. VIKRAM NATH
and
HONOURABLE MR. JUSTICE J.B.PARDIWALA
Date : 07/09/2020
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)
1. This tax appeal under Section 130 of the Customs Act, 1962 (for short "the Act 1962") is at the instance of the Principal Commissioner of Customs and is directed against the order dated 25.06.2019 passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad, in the Customs Appeal No.12788 of 2018-DB.
2. The appellant has proposed the following questions of law for the consideration of this Court :
"[A] Whether in the facts and circumstances of the present case, an appeal under Section 129A(3) was maintainable before the CESTAT, challenging a Compounding Order passed by the Compounding Authority?
[B] Whether in the facts and circumstances of the present case, the CESTAT was right in interpreting the Order in Original dated 31.03.2005 and coming to a Page 1 of 6 Downloaded on : Tue Sep 08 21:35:57 IST 2020 C/TAXAP/145/2020 ORDER conclusion that there was no demand of redemption fine?
[C] Whether in the facts and circumstances of the present case the respondent was entitled to compounding of offences under Section 137(3) of the Customs Act, 1962 in view of his previous antecedents under the Act?"
3. We need not adjudicate the questions of law as proposed by the Revenue as we take notice of the fact that a common order was passed by the Tribunal in two appeals being the Customs Appeal No.12787 of 2018 and Customs Appeal No.12788 of 2018 respectively from which the present appeal arises before us. Against the order passed by the Tribunal in the Customs Appeal No.12787 of 2018, the Revenue had come before this Court by way of Tax Appeal No.106 of 2020. A coordinate Bench of this Court vide order dated 27.02.2020 dismissed the Tax Appeal No.106 of 2020. The order reads thus :
"1. This tax appeal under Section-130 of the Customs Act, 1962 [for short 'The Act, 1962'] is at the instance of the Revenue and is directed against the order passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad [for short 'The CESTAT'] in the Customs Appeal No.12787 of 2018-DB, dated 25 th June, 2019.
2. The Revenue has proposed the following two questions of law for the consideration of this Court.
"[A] Whether in the facts and circumstances of the present case, an appeal under Section 129A(3) was maintainable before the CESTAT, challenging a Compounding Order passed by the Compounding Page 2 of 6 Downloaded on : Tue Sep 08 21:35:57 IST 2020 C/TAXAP/145/2020 ORDER Authority?
[B] Whether in the facts and circumstances of the present case, the CESTAT was right in interpreting the Order in Original dated 31.03.2005 and coming to a conclusion that there was no demand of redemption fine?"
3. So far as the first question of law as proposed by the Revenue is concerned, the same stands answered vide judgment and order rendered by a Co-ordinate Bench of this Court in the case of Commissioner of Central Excise Vs. Girish B. Mishra; Tax Appeal No.951 of 2012, decided on 13th February, 2013. We may quote the relevant observationas contained in Paragraph-7.
"7. The "Adjudicating Authority" has been defined in Section 2(a) ofthe Central Excise Act, 1944 as under:-
"(a) "Adjudicating authority" means any authority competent to pass any order or decision under this Act, but does not include the Central Board of Excise and Customs constituted under the Central Board of Revenue Act, 1963 (54 0f 1963), (Commissioner of Central (Appeals)) or Appellate Tribunal;
Question for consideration before us is whether the order passed by the Commissioner rejecting the application of the respondent for compounding the offence can be stated to be the one passed by the adjudicating authority, as defined under Section 2(a) of the Act. If we analyse the said provision, it defines the term "Adjudicating Authority"to mean any authority, competent to pass any order or decision under the Act. The question, therefore, arises whether the order rejecting the application for compounding was one passed by the Commissioner under the Central Excise Act, 1944. In this respect, we have noticed statutory scheme pertaining to the procedure for compounding the offence. The power of compounding flows from Section 9A(2) of the Act. The procedure is laid down under the Central Excise (Compounding of Offences) Rules, 2005. Under such rules, the compounding authority has a discretion to grant or not to grant, compounding upon Page 3 of 6 Downloaded on : Tue Sep 08 21:35:57 IST 2020 C/TAXAP/145/2020 ORDER such conditions that may be imposed by him. It is thus, clear that the compounding authority exercises its discretionary power and decides an application filed by the appellant for compounding the offence. By no stretch of imagination, it can be stated that any such order either allowing or rejecting the application for compounding is not an order passed by the Commissioner as adjudicating authority as defined under Section 2(a) of the Act. Any such order would certainly be an order passed under the Act. The words "any order or decision under the Act" used in Section 2(a) of the Central Excise Act, 1944, defining the term, "Adjudicating authority", must take in its fold an order deciding the lis of a party and would not include merely an administrative order. In the present case, however, the Commissioner's order does decide the question of compoundability of an offence of the applicant concerned and would therefore, in our view, satisfy the description of any order or decision passed by him under this Act. In that view of the matter, appeal against any such order would lie before the Tribunal in terms of Clause (a) of sub-section (1) of Section 35B of the Central Excise Act. The Tribunal thus, was justified in entertaining such an appeal. With regard to merits of the issue, the Tribunal has merely remanded the proceedings before the Commissioner for fresh consideration and decision in accordance with law, after giving opportunity of hearing to the respondent."
4. We may clarify that although the decision of the Co- ordinate Bench in the case of Girish B. Mishra is in connection with the provisions of the Central Excise Act, yet the provisions of customs are analogous to the provisions of the Act, 1944. The principle of law as explained in Girish B. Mishra [Supra] is applicable in the present case.
5. So far as the second question as proposed by the Revenue is concerned, we may look into the findings recorded by the tribunal in this regard. We may quote the relevant observation as contained in paragraph-4.
"4. We have heard both sides and perused the records. We find that the compounding applications were rejected only on the ground that the appellant have not deposited the redemption fine. The Hon'ble Gujarat High Court, in a set of Page 4 of 6 Downloaded on : Tue Sep 08 21:35:57 IST 2020 C/TAXAP/145/2020 ORDER cases in the same SCN and Adjudication Order, held that since there is no clear proposal in the SCN on imposition of redemption fine and also in the OIO, there is no crystallized demand of redemption fine against each noticee. It was held that the department could not recover fine from the noticee. In this position, there is no demand of redemption fine against the appellants. In this view, there is no case of demand of redemption fine,Therefore, the rejection of application for non-payment or redemption fine if not correct and legal. Accordingly, the impugned order is set aside and appeals are allowed. The Chief Commissioner (Competent Authority) is directed to reconsider the application for compounding, preferably within a period of 3 months from the date of this order and pass a fresh order."
6. It appears from the above that the tribunal looked into the order passed by a Co-ordinate Bench of this Court in the case of Shivam Development Trust And Another Vs. Union of India; Special Civil Application No.7301 of 2015; decided on 03rd May 2016. The Co-ordinate Bench observed in Paragraph-6 as under:-
"6. In this order as well as in the above-noted directions also, there was no indication that the petitioner trust is liable to pay the fine of Rs.7.25 lacs in lieu of confiscation. In absence of any proposal in the show cause notice for imposition of fine in lieu of confiscation relatable to the petitioner and in absence of any directions contained in the order-in-original that such fine would be borne by the petitioner, it was simply not open for the department to seek recovery thereof from the petitioner."
7. The Tribunal in so-many words has observed that there was no clear proposal in the show cause notice with regard to imposition of the redemption fine and also in the order-in-original. The tribunal has observed that there is no crystallized demand of redemption fine against each of the noticee.
8. In such circumstances referred to above, none of the questions of law as proposed by the Revenue could be termed as substantial questions of law.
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9. In view of the above, this tax appeal fails and is hereby dismissed."
4. In view of the aforesaid, the present appeal arising from the self same order passed by the Tribunal should also fail. In the result, this appeal fails and is hereby dismissed.
(VIKRAM NATH, CJ) (J. B. PARDIWALA, J) DRASHTI K. SHUKLA Page 6 of 6 Downloaded on : Tue Sep 08 21:35:57 IST 2020