2025 (3) TMI 70 - AT - Customs

Waiver of interest on the goods which were initially in warehouse and were cleared later - CBIC Circular No. 10/2006 - HELD THAT - This Court has considered the materials placed before it along with CBIC Circular and finds that the order has conveyed of the Chief Commissioner is totally unreasoned and has denied natural justice as even the party was not heard in the matter. The discretion has been exercised in most arbitrary manner without exhibiting any reasons whatsoever. It is a trite law that even the administrative orders which seek to deny party any of it is entitlement need to be reasoned so the courts can exercise a mind as so whether they were correctly arrived at or not. In the instant matter this court finds that it has been completely denied of looking into the reasons of the Chief Commissioner. Further this court finds that while the CBIC Circular is well-reasoned and gives out as to why certain kind of projects which include interalia the power projects deserve to be considered sympathetically for waiver of interest no such application of mind or reasoning is appearing from the order of the Chief Commissioner conveyed to the party vide the aforesaid letters. In view of the foregoing the matter is remitted back to Chief Commissioner with direction to give reasoned order after hearing the party as it affects their interest and also unnecessarily raises project cost of the power project. Appeal allowed by way of remand.

Summary

The case before the Appellate Tribunal involved the appellants seeking a waiver of interest on goods initially held in a warehouse and later cleared for a power project. The claim was supported by CBIC Circular No. 10/2006, which directed consideration of interest waiver for power projects due to their national importance and impact on working capital requirements. The Chief Commissioner initially rejected the waiver request without providing any reasons, leading the appellants to appeal to the Tribunal.The Tribunal found the Chief Commissioner's unreasoned rejection to be a denial of natural justice, emphasizing the need for administrative orders to be reasoned for judicial review. While the CBIC Circular outlined reasons for considering waivers for projects like power projects, the Chief Commissioner's order lacked such reasoning. Therefore, the Tribunal remitted the matter back to the Chief Commissioner with directions to provide a reasoned order after hearing the party to avoid unnecessary project cost escalation.The Tribunal also highlighted the need for reconsideration of orders based on the Chief Commissioner's rejection once a reasoned decision is made. All previous orders were set aside, and the matter was remitted to the respective authorities for fresh consideration after the Chief Commissioner's review. The appeals were allowed by way of remand, emphasizing the importance of reasoned decision-making in administrative matters affecting parties' interests.