Custom, Excise & Service Tax Tribunal
Flemingo Duty Free Shop Pvt. Ltd vs Commissioner Of Customs, Goa on 17 June, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPLICATION Nos. C/S/1439 & 1689/10 in APPEAL Nos. C/536 & 629/10 (Arising out of Orders-in-Appeal No. Goa/Cus/GSK/01/2010 dated 16.6.2010 and No. Goa/Cus/GSK/53/2010 dated 3.8.2010 both passed by Commissioner of Customs (Appeals), Goa) For approval and signature: Honble Mr. P.G. Chacko, Member (Judicial) and Honble Mr. Sahab Singh, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Flemingo Duty Free Shop Pvt. Ltd. Appellant Vs. Commissioner of Customs, Goa Respondent Appearance: Shri Habibullah Badsha, Senior Advocate, for appellant Shri Manish Mohan, Authorised Representative (SDR), for respondent CORAM: Honble Mr. P.G. Chacko, Member (Judicial) and Honble Mr. Sahab Singh, Member (Technical) Date of Hearing: 17.6.2011 Date of Decision: 17.6.2011 ORDER NO Per: P.G. Chacko
These applications seek waiver of pre-deposit and stay of recovery in respect of an amount of duty demanded from the applicant. These arise in two appeals filed by the applicant, one directed against the appellate Commissioners direction for pre-deposit and the other against the appellate Commissioners subsequent order of dismissal of the appeal filed by the party. After examining the records and hearing both sides, we have found this case fit for summary disposal. Accordingly, after dispensing with pre-deposit, we take up the appeals.
2. The appellant is carrying on the business of duty-free shop at Goa International Airport. The brief facts of the case as stated by the appellant are as follows: On 26.5.2008, a theft/burglary took place at the above duty-free shop which is inside a high security area of the airport. A First Information Report was lodged with the local police by the CISF personnel in charge of security of the area on the same day. An officer of CISF and a local policeman were arrested in that connection. In a letter dated 28.5.2008 addressed to the local police, the appellant estimated loss of Rs.60 lakhs due to the theft and furnished a list of stolen goods. In that letter, the appellant stated that the theft was taking place for many days before it was noticed by CISF in the night of 25/26.5.2008. The department issued show-cause notice dated 19.9.2008 demanding duty of Rs.96,66,209/- on the non-duty paid/warehoused goods found short on physical verification. This demand was raised under Section 72(1)(d) of the Customs Act and by invoking one of the conditions of the licence issued under Section 58 of the Act. The show-cause notice also proposed to revoke the bond executed under Section 59(2) of the Act. The demand of duty and other proposals were contested. In adjudication of the dispute, the Assistant Commissioner of Customs confirmed the demand of duty under Section 72(1)(a) on the ground of violation of Section 71 of the Act. Against this order of the adjudicating authority, the party preferred an appeal to the Commissioner (Appeals) and also filed therein an application for waiver of pre-deposit. The application for waiver was disposed of by an order dated 16.6.2010, the operative part of which reads as follows:-
I have examined the impugned order and stay petition. At the stay stage, it will not be feasible to go into the merits of the case. Appellant has also not pleaded any financial hardship. In such circumstances, the stay petition is disposed off by directing the appellant to pre-deposit a sum of Rs.30,00,000/- (Rupees thirty lakhs only) on or before 31st of July, 2010 subject to which there shall be a stay on the balance of duty demanded, during the pendency of this appeal. Failure to comply shall result in dismissal of the appeal without any further reference to the appellant. The party did not make any pre-deposit. They challenged the above order dated 16.6.2010 in appeal No.C/536/10 before this Tribunal. That this appeal was filed along with a stay application was also communicated to the Commissioner (Appeals) through memo dated 23.7.2010, wherein it was also requested that the stay order dated 16.6.2010 be kept in abeyance. Subsequently, however, the learned Commissioner (Appeals), having found no evidence of pre-deposit, rejected the assessees appeal on the ground of non-compliance vide order-in-appeal dated 3.8.2010, wherein he also noted that the appellant had not obtained any order of stay from the Tribunal. The present appeal No. C/629/10 of the assessee is directed against the said order-in-appeal.
3. The learned Senior Advocate, appearing for the appellant, submits that it is not in dispute that the goods in question had been stolen from the appellants premises and that a crime has been registered with the local police. It is, therefore, submitted that the departments plea of non-accountal of the goods, raised against the appellant, is factually untenable. It is submitted that the appellant has strong prima facie case against the demand of duty. It is also submitted that the stolen goods are covered by valid insurance policy and the beneficiary thereof is the Customs department. The grievance of the appellant, according to the learned counsel, is that their case on merits was not considered by the lower appellate authority before directing them to make pre-deposit under Section 129E of the Customs Act. It is further pointed out that, though the appellant had pleaded financial hardships, the lower appellate authority wrongly noted that they had not raised any such plea. Further, it is submitted that the learned Commissioner (Appeals) chose to reject the assessees appeal for non-deposit without heeding their plea that an appeal had already been filed with this Tribunal against his stay order dated 16.6.2010. According to the learned counsel, both the stay order and the final order of the Commissioner (Appeals) are liable to be set aside and the case liable to be remanded to the appellate authority for fresh decision on merits without insisting on pre-deposit.
4. The learned SDR is not opposed to remand of the case, though it is his submission that the stay matter also should be remanded for fresh decision. In this connection, he has claimed support from order No. A/117-118/11/CSTB/C-I dated 4.3.2011 passed by this Bench in the case of GKN Sinter Metals Ltd. vs. CCE, Goa. His focus is on para 4 of the said order, which refers to a judgment of the Honble Supreme Court.
5. In his rejoinder, the learned counsel submits that, where all the facts and circumstances are available on record, it may not be appropriate to remand the stay matter. It is urged that, on the facts of this case, waiver of pre-deposit be granted and thereafter the case be remanded for final decision on merits. In this connection, the learned counsel has relied on the following decisions: Shree Shyam Pulp & Board Mills Ltd. vs. CCE, Meerut 2009 (237) ELT 474 (Tri.-Del.), Arun Enterprises vs. CCE, Ghaziabad 2009 (237) ELT 669 (Tri.-Del.) etc. In the cited cases, a co-ordinate Bench of this Tribunal granted waiver of pre-deposit to the appellant and remanded the cases to the lower appellate authority. In both the cases, the Bench found infirmities in the interim orders passed by the lower appellate authority.
6. We have given careful consideration to the submissions. An excerpt from the appellate Commissioners stay order dated 16.6.2010 has already been included in this order and the same clearly discloses a basic flaw on the part of the lower appellate authority. After discussing the facts of the case, the learned Commissioner (Appeals), in the said stay order, says thus: At the stay stage, it will not be feasible to go into the merits of the case. We are surprised at this observation of the learned Commissioner (Appeals). It is by now established law that, in a stay application filed under Section 129E of the Customs Act or under Section 35F of the Central Excise Act, the appellate authority or the appellate Tribunal, as the case may be, should first examine whether the appellant has prima facie case on merits. Unfortunately, in the present case, the learned Commissioner (Appeals) did not find it feasible to go into the merits of the case. Secondly, where the appellant has pleaded financial hardships, the appellate authority should consider that plea as well. In the present case, the learned Commissioner (Appeals) has noted that the appellant did not plead any financial hardships. On a perusal of the text of the stay application filed by the appellant before the Commissioner (Appeals), we find that it had been stated in clear terms by the appellant in that application that they would be put to undue hardships if directed to make pre-deposit. Obviously, the learned Commissioner (Appeals) did not give the appellant an opportunity to amplify this plea. Thus, both ways, the stay order dated 16.6.2010 passed by the Commissioner (Appeals) is bad in law on account of non-consideration of case on merits and of the plea of hardships apart from negation of natural justice. As rightly pointed out by the learned SDR, the final order passed by the Commissioner (Appeals) is consequential to non-compliance, by the appellant, with the stay order passed earlier. Though it was pointed out to the Commissioner (Appeals) that the stay order was challenged before the Tribunal, the appellate authority proceeded to dismiss the appeal on the ground of non-compliance. There is nothing on record to show that any opportunity of being heard was given to the appellant before dismissing their appeal on the said ground.
7. Both the orders of the Commissioner (Appeals) are liable to be set aside. It is ordered accordingly. The question which immediately arises is whether the case should be remanded for final decision on merits without pre-deposit. The learned counsel has cited a few instances of this Tribunal having ordered such remand to the lower appellate authority. But the facts of the present case are clearly distinguishable. In the cited cases, this Tribunal found that the lower appellate authority had not considered the assessees case on merits while directing them to make pre-deposit. In the instant case, on the other hand, the lower appellate authority consciously refused to consider the assessees case on merits saying that it was not feasible to do so. It must be feasible for the Commissioner (Appeals) to consider a given case on merits before directing pre-deposit under Section 129E of the Customs Act. Thus the factual situation obtaining in the present case is peculiar in contrast with the cases cited by the learned counsel. It goes without saying that a decision in a given case should depend squarely on the peculiar facts of that case coupled with the applicable provisions of law. On the facts of the present case, we are inclined to direct the Commissioner (Appeals) to dispose of the assessees stay application afresh in accordance with law and the principles of natural justice and having regard to the relevant observations contained in this order. It goes without saying that the appellate authority should consider the case on merits so as to ascertain whether there is any prima facie case for the appellant. It should also consider the plea of hardships. It should give the appellant a reasonable opportunity of being heard in the stay application. The appeal of the party will have to be disposed of in accordance with law and the principles of natural justice, depending, of course, on the results of the stay application.
8. Both the appeals are allowed by way of remand in the above terms.
(Pronounced in Court) (Sahab Singh) Member (Technical) (P.G. Chacko) Member (Judicial) tvu 1 7