Telangana High Court
Principal Commissioner Of Customs, vs Khan Sadaf on 4 September, 2023
Author: P.Sam Koshy
Bench: P.Sam Koshy
THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY
C.E.A.No.5 of 2023
ORDER:-(per Hon'ble Sri Justice P.SAM KOSHY) The instant appeal has been filed by the Principal Commissioner of Customs assailing the order dated 05.04.2023, vide Final Order No.A/30039/2023, passed by the Customs, Excise & Service Tax Appellate Tribunal (for short 'the Tribunal') in Customs Appeal No.C/30266/2018.
2. Heard Sri Dominic Fernandes, learned counsel for the appellant.
3. The present appeal has a brief history which would be required for the proper adjudication of the appeal. The dispute arises from an earlier order passed by this High Court in W.P.No.8349 of 2017, decided on 02.11.2017. The respondent herein who was the petitioner in the aforesaid writ petition had claimed for quashment of the order dated 02.02.2017 passed by the Chief Commissioner, whereby, he has declined the compounding of the offence 2 under the Customs Act under Section 137 of the Customs Act, 1962.
4. The said writ petition was dismissed by the Division Bench of this Court holding that the writ petition is not maintainable on the ground that the petitioner has a remedy of appeal available before the Customs, Central Excise and Service Tax Tribunal. And thereafter, there being yet another appeal before the Appellate Tribunal. Later on, the respondent/Union of India themselves filed a review petition before the High Court. The said review petition which was registered as I.A.No.1 of 2018 in the earlier writ petition i.e. W.P.No.8349 of 2017 was dismissed with the following observations:
"By the afore-mentioned order, on the representation of the learned senior Standing counsel for the Union of India that an appeal lies against the order impugned in the Writ Petition to the Customs, Central Excise and Service Tax Tribunal (for short' the CESTART) under Section-129 A of the Customs Act, 1962 (for short; the Act), we have dismissed the said Writ Petition permitting the petitioner to file an appeal.
Now, the Union of India and another have filed this Review appliation on the ground that an adjudication order passed by the Chief Commissioner is not assessable to appeal under Section-129 A of the Act. Though prima facie, we are not impressed by the submissions of the learned senior Standing Counsel, we leave the issue as to the maintainability of the appeal to be decided by the CESTAT while deciding the appeal. 3 Subject to the above observation, the application is dismissed."
5. The petitioner went before the Appellate Tribunal. The Appellate Tribunal after entertaining the case, relying upon the decision of the Gujarat High Court in the case of Commissioner of Central Excise Versus Girish B. Mishra1 allowed the appeal of the appellant and remanded the matter back to the Chief Commissioner to pass a fresh order after giving an opportunity to the appellant to make oral as well as written submissions along with documentary evidence if any. It is this order passed by the Appellate Tribunal on 05.04.2023 which is under challenge in the present appeal.
6. Referring to Section 129 of the Customs Act, 1962, the contention of the learned counsel for the appellant was that the matter was one, which could not had been entertained by the Appellate Tribunal, as the order under Section 137 of the Act is not an appealable order. Moreover, the order passed under Section 137 of the Act is also not the one which could be subjected to test under Section 129 1 2013 SCC OnLine Guj 9021 : (2016) 339 ELT 67 4 of the Act before the Appellate Tribunal. And that the only remedy available to the respondent was that of a writ remedy.
7. According to the learned counsel for the appellant, the Appellate Tribunal has committed an error in law in deriving jurisdiction, when the statute does not provide for the same. Hence, the order is bad in law. It was further contended that the order passed by the Chief Commissioner under Section 137 was not in the capacity of an adjudicatory authority, nor does a decision passed under Section 137 be accepted to be an order passed in an adjudication by an adjudicatory authority. Relying upon the case of the M/s Noble Agency V/s Commissioner of Customs, Mumbai-2002 (142) ELT 84 (Tri-Mum) where it was held that since the Tribunal is a creature of statute, which could not have entertained the matter which otherwise does not fall within its jurisdiction.
8. In short, what the core issue to be adjudicated in the present appeal is, as to "whether the Appellate Tribunal has the jurisdiction/authority/power to entertain an appeal 5 against an order passed under Section 137 of the Customs Act, 1962". In order to understand the aforesaid issue, it would be relevant at this juncture to refer to certain provisions of law under the Customs Act. First, we would like to refer to the provision of law under Section 137 (3), which for ready reference is reproduced hereunder:
"Any offence under this Chapter may, either before or after the institution of prosecution, be compounded by the Chief Commissioner of Customs on payment, by the person accused of the offence to the Central Government, of [such compounding amount and in such manner of compounding] as may be specified by rules.] [Provided that nothing contained in this sub-section shall apply to--
(a) a person who has been allowed to compound once in respect of any offence under sections 135 and 135A;
(b) person who has been accused of committing an offence under this Act which is also an offence under any of the following Acts, namely:
(i) the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985)
(ii) the Chemical Weapons Convention Act, 2000 (34 of 2000)
(iii) the Arms Act, 1959 (54 of 1959)
(iv) the Wild Life (Protection) Act, 1972 (53 of 1972)
(c) a person involved in smuggling of goods falling under any of the following, namely:--
(i) goods specified in the list of Special Chemicals, Organisms, Materials, Equipment and Technology in Appendix 3 to Schedule 2 (Export Policy) of ITC (HS) Classification of Export and Import Items of the Foreign Trade Policy, as amended from time to time, 6 issued under section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992);
(ii) goods which are specified as prohibited items for import and export in the ITC (HS) Classification of Export and Import Items of the Foreign Trade Policy, as amended from time to time, issued under section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992);
(iii) any other goods or documents, which are likely to affect friendly relations with a foreign State or are derogatory to national honour;
(d) a person who has been allowed to compound once in respect of any offence under this Chapter for goods of value exceeding rupees one crore;
(e) a person who has been convicted under this Act on or after the 30th day of December, 2005.]"
Thus, from a plain perusal of the statutory provision under Section 137 of the Customs Act, it would clearly reveal that an application for compounding of any offence under this chapter has to be placed before the Chief Commissioner of Customs.
9. Now we may come to the provision of Section 129-A which deals with the appeals to the Appellate Tribunal. So far as the issue involved in the case, it would be relevant, to refer only to the provision under Section 129-A (1) (a), which for ready reference is reproduced hereunder: 7
"Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order
(a) a decision or order passed by the Principal Commissioner of Customs or Commissioner of Customs as an adjudicating authority;
A plain reading of the aforesaid provision of law, would clearly reflect that an appeal to the Appellate Tribunal would lie at the behest of any aggrieved person being aggrieved by any of the orders as envisaged in sub-clause 'a to d'. Sub-clause 'a' which is relevant for the present matter speaks of the nature of orders. One in the form of a decision and second in the form of an order passed by the Principal Commissioner of Customs or the Commissioner of Customs as an adjudicating authority. So what is relevant to be considered is that an appeal can be filed by any person aggrieved by any decision or an order passed as an adjudicating authority, which could be the Principal Commissioner or the Commissioner.
10. Now what is relevant to be taken note of is the definition of the adjudicating authority as is defined under Section 2(1) which again for ready reference is being reproduced herein:
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"adjudicating authority" means any authority competent to pass any order or decision under this Act, but does not include the Board, Commissioner (Appeals) or Appellate Tribunal;
A plain reading of the definition of adjudicating authority would lay to rest many issues that have been raised, more particularly, as to the authorities who can be brought within the ambit of an adjudicating authority. If we take into consideration, the liberal meaning of the wordings reflected in the said definition of adjudicating authority, it would by itself give a clear indication to the liberal interpretation that it can be given to the said wordings.
11. It would be relevant at this juncture to reflect two three phrases used in the definition. And those are "any authority", "competent to pass an order" and "or any decision under this Act". This in other words means, any authority that has been conferred with the power under the Act to pass an order or to decide upon an application would be an authority competent and thereby would become an adjudicating authority.
12. Keeping the aforesaid definition in mind, if we look at the provisions of Section 129-A (1) (a) which has been 9 reproduced in the preceding paragraphs, would clearly reflect that this also is an inclusive provision which has to be given a wide interpretation. As the section itself begins with any person aggrieved by any of the orders and then clause 'a' of Section 1 says either be it a decision or be it an order passed by the Principal Commissioner of Customs or the Commissioner of Customs as an adjudicating authority. Only because sub-clause 'a' does not reflect the designation of Principal Chief Commissioner, it does not mean an authority would get automatically excluded from the said provision of law.
13. The intention of the law makers while enacting the law or any authorized officer or a competent authority who has been entrusted with a power to decide or adjudicate, automatically becomes an adjudicating authority. Sub- section 1 of Section 129-A in this regard would clearly mean that an adjudicating authority is one who has passed a decision or an order. They would be an authority competent and thereby would become an adjudicating authority.
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14. Now if we look into the provision of Section 137 (3) of the Act, it also would give an clear indication that for the purpose of compounding an offence, an application has to be moved before the Chief Commissioner of Customs alone, and it is who has to take a decision. Thus on an application which stands decided under Section 137 (3), the Chief Commissioner becomes the adjudicating authority or a competent authority under the Act to take a decision on an application bringing him under the purview of an adjudicating authority. No provision under the Act envisages that decision taken under Section 137 (3) or for that matter, a decision taken by the Chief Commissioner would not be an appealable order and that his order would be final, so as to accept the contention of the learned counsel for the appellant that it is only a writ remedy that is available to him.
15. For all the aforesaid reasons, we do not find any infirmity in the order passed by the Tribunal, nor does this Court find sufficient force in the arguments of the learned counsel for the appellant. Moreover, the order of the Tribunal also is not in any manner adverse to the interest 11 of the Department. Where the only direction given is that of remanding the matter back to the competent authority to take a decision afresh.
16. In the factual backdrop, the appeal thus fails and is accordingly, rejected. There shall be no order as to costs.
As a sequel, miscellaneous petitions, if any pending, shall stand closed.
___________________ P. SAM KOSHY, J ___________________________________ LAXMI NARAYANA ALISHETTY, J 04th Sep, 2023 GSD