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2015 (11) TMI 1492 - CESTAT NEW DELHI (5-Member Bench)

2015 (11) TMI 1492 - CESTAT NEW DELHI (5-Member Bench) - 2015 (326) E.L.T. 561 (Tri. - LB) - Provisional release of goods - Section 110A - Maintainability of appeal - Whether an appeal lies before this Tribunal against the order passed by Commissioner (Customs) under Section 110A of the Customs Act, 1962 for provisional release of the goods or not - Held that:- An order of release or non-release cannot be deemed to be an order in the nature of adjudication. The second reason was that the request .....

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aid order it could be inferred that since an order for provisional release is to be passed 'pending the order of the adjudicating officer' such order is not adjudication order. Incidentally, in Navshakti [2008 (2) TMI 668 - CESTAT, NEW DELHI] the Tribunal was dealing with provisions of Section 110A prior to its amendment with effect from 08/04/2011. The Tribunal, in fact indicated the doubt regarding rank of the final adjudicating officer in that particular case.

Order for provisional .....

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djudicating authority exercises wide ranging discretionary powers, not fretted by any express statutory conditions, pre-listing the types of order that could be issued. When a statute confers powers upon a public official to decide on a person's rights and interests, the principles of natural justice guide the exercise of that power unless specifically excluded by the statute itself. To state that a decision or order in exercise of such powers is of unilateral, administrative nature is not legal .....

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oods or imposing harsher conditions for release will certainly have legal adverse consequences to the owner of the goods. Hence, the owner has to have a remedy which is statutorily provided under Section 129A.

Provisions of Section 129A (1) (a) clearly authorize an appeal against an order or decision by the Adjudicating Authority issued under Section 110A. There is no legal basis to restrict the scope of such appeal in the absence of any restrictive conditions in the provision.
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(Technical), Hon ble Ms. Sulekha Beevi C.S., Member (Judicial) And Hon ble Shri B. Ravichandran, Member (Technical) For the Appellants : Shri M.K. Gupta, Consultant, B.K. Singh, I.C. Joshi and K.K. Jha, Advocates For the Respondent : Shri Govind Dixit and Amresh Jain, Authorized Representative (DRs) ORDER Per B Ravichandran THE REFERENCE Appeal Nos. C/53878/2014-CU (DB) and C/53901/2014 - CU (DB) came up for consideration before a Division Bench of the Tribunal. These appeals were against the or .....

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bunal in Akanksha Syntax Pvt. Ltd. vs. CC (General), Mumbai - 2013 (289) E.L.T. 186 (Tri. - Mumbai), which ruled that an appeal against an order under Section 110A is not maintainable before the Tribunal under Section 129A of the Customs Act, 1962. After examining the issue in detail, the Division Bench vide the interim order dated 25/05/2015, did not agree with the decision of three member Larger Bench in Akanksha Syntax Pvt. Ltd. (supra). Expressing doubt about the correctness of the decision .....

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e Customs Act, 1962 for provisional release of the goods or not". 3. The Special Bench took up the issue for decision. Notices have been issued to all concerned assessees, Revenue and Advocates' Associations at the various regional Benches of the Tribunal as per practice. PRELIMINARY OBJECTION OF REVENUE : 4. During the course of hearing, the Revenue represented by learned ARs Shri Govind Dixit and Shri Amresh Jain raised a preliminary objection regarding validity of constitution of a f .....

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made by Revenue. 5. On the first and second points reliance was placed on Hon'ble Apex Court's decisions in Pradip Chandra Parija vs. Pramod Chandra Patnaik reported in 2002 (144) E.L.T. 7 (S.C.); Central Board of Dawoodi Bohra Community vs. State of Maharashtra reported in 2010 (254) E.L.T. 196 (S.C.); and U.P. Parents Associations in civil appeal No. 418/1985. We have carefully examined the above cited precedents and other decisions having a bearing on the matter. 6. At the outset it .....

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t the Hon'ble Supreme Court Constitution Bench in Central Board of DawoodiBohra Community (supra) had summed up the legal position. The Apex court ruled that "A Bench of lesser quorum cannot doubt the correctness of the view of the law taken by a Bench of larger quorum. In case of doubt all that the Bench of lesser quorum can do is to invite the attention of the Chief Justice and request for the matter being placed for hearing, before a Bench of larger quorum than the Bench whose decisi .....

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bove said rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength. 9. The matter regarding constitution of a Larger Bench by the President was discussed at length in the Tribunal's order in Larsen & Toubro Ltd. vs. Commissioner of Service Tax, New Delhi reported in 2014 (36) S.T.R. 1022 (Tri. - Del.). The Tribunal's observations are .....

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ferred expressly by the statute. Furthermore, being a judicial body, it has all those incidental and ancillary powers which are necessary to make fully effective the express grant of statutory powers. Certain powers are recognized as incidental and ancillary, not because they are inherent in the Tribunal, nor because its jurisdiction is plenary, but because it is the legislative intent that the power which is expressly granted in the assigned field of jurisdiction is efficaciously and meaningful .....

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Statutes, (eleventh edition) "where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution. 9. It is true that a Bench of two members must not lightly disregard the decision of another Bench of the same Tribunal on an identical question. This is particularly true when the earlier decision is rendered by a Larger Bench. The rationale of this rule is the need for continuity, certainty and .....

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r, equally true that it is vital to the administration of justice that those exercising judicial power must have the necessary freedom to doubt the correctness of an earlier decision if and when subsequent proceedings bring to light what is perceived by them as an erroneous decision in the earlier case. In such circumstances, it is but natural and reasonable and indeed efficacious that the case is referred to a Larger Bench. This is what was done by the Bench of two members who in their reasoned .....

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the President for hearing on any such point by one or more of the members of the Tribunal, and such point shall be decided according to the opinion of the majority of the members. 11. It is true that sub-section (5) refers to difference of opinion arising amongst members of a Bench in a particular case, and not specifically where the members of a Bench doubt the correctness of an earlier decision. However, Section 129C confers power of reference upon the President. That power should be construed .....

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ss grant authorizing the President to constitute Benches of the Tribunal for effective and expeditious discharge of its functions. 12. In our view, the Bench of two members acted within their power in stating the points of law which required clarification and the President acted equally within the bounds of his power in constituting a Larger Bench to hear and decide those points". 18. A recent decision of the Supreme Court in West U.P. Sugar Mills Assn. and Others v. State of U.P. - (2012) .....

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mbers) of this Tribunal in CCE, Vadodara v. Asia Brown Boveri Limited - 2000 (120) E.L.T. 228 (Tri.-LB), following the decision in Paras Laminates (supra) entertained a reference arising out of an order passed by single Member Bench recommending to the President, CESTAT for constitution of a Larger Bench for resolution of an extent conflict and the order of the President, CESTAT referring the issue for consideration by a Larger Bench (of five Members). Paras 6 and 7 of this judgment explain the .....

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opinion on any point and to refer such a case to one or more Members of the Tribunal. It has been observed in Paragraph 11 of the said judgment that Section 129C confers the power of reference upon the Hon'ble President and the power should be construed to be wide enough to enable the Hon'ble President to make a reference where Members of a Bench find themselves unable to decide a case according to what they perceive to be the correct law and fact because of the impediment of an earlier .....

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d no infirmity in the Single Member Bench in Chandigarh Bottling case not following the three Member Bench decision in American Auto Service case, though we also at the same time fully reiterate and emphasise the observation of the Apex Court in Para 9 of the Paras Laminates case stating that a two Member Bench must not lightly disregard the decision of another Bench of the Tribunal on an identical question particularly when the earlier decision is rendered by a Larger Bench in the interest of c .....

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n the relevant principles and the scope of the power of the President, ITAT, under Section 255(3) of the Income-tax Act, 1961 : "12. In our view the aforesaid decision of the High Court to the effect that the President of the Income Tax Appellate Tribunal cannot constitute a Special Bench save and except under a judicial order cannot be sustained on the scheme of the Act and the relevant regulations. The reasons are obvious. Section 255 of the Income-tax Act deals with the procedure of Appe .....

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s behalf by the Central Government may, sitting singly, dispose of any case which has been allotted to the Bench of which he is a member and which pertains to an assessee whose total income as computed by the Assessing Officer in the case does not exceed one lakh rupees and the President may, for the disposal of any particular case, constitute a Special Bench consisting of three or more members, one of whom shall necessarily be a judicial member and one an accountant member. (4) If the members o .....

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bers of the Appellate Tribunal who have heard the case, including those who first heard it. (5) Subject to the provisions of this Act, the Appellate Tribunal shall have power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which Benches shall hold their sittings." 13. Now a mere look at sub-section (1) shows that it is the administrative function of the P .....

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ministrative functions. They have nothing to do with exercise of any judicial power. It is of course true that as per sub-section (5) the Appellate Tribunal can regulate its own procedure and the procedure of benches and for that purpose can frame appropriate regulations. In exercise of that power the Income Tax Appellate Tribunal has framed regulations. The relevant regulation for the present purpose is Regulation 98(A). It reads as under : "Regulation 98(A) With a view to bring about unif .....

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SIDENT, ITAT FOR CONSTITUTION OF SPECIAL BENCH. We the members of ………..Bench(es) at ………..(Station) are of the opinion that the appeal(s) No.(s)………….in the matter of ……………… which were posted for hearing before us on …………is/are fit and proper appeal(s) which should be heard by a Special Bench consisting of three/or ……………membe .....

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;" The aforesaid regulation shows that the concerned Bench which is seized of the matter may in exercise of its judicial function in appropriate case make a reference to the President to constitute a Special Bench. The exercise of that function by the Bench of the Tribunal hearing the matter is of course a judicial function but so far as the President's power under sub-section (1) read with sub-section (3) of Section 255 to constitute Benches or for that matter Special Benches is concer .....

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he legislature under Section 255(1) read with Section 255(3) of the Income-tax Act" Powers and functions of the President, CESTAT are in parimateria, under provisions of the Finance Act, 1994 read with the Central Excise Act, 1944". 10. One important point of relevance here is that we are dealing with a reference by the Division Bench to the President. The Division Bench neither directly referred the matter to a Larger Bench nor indicated the size of the Bench by which the matter is to .....

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refore rejected. 12. Another point was raised by Revenue regarding non-consideration of all arguments made by Revenue before the Division Bench before this reference was made. We find that the Division Bench did consider all relevant facts and legal issues before making the reference to the President. The Revenue's main thrust before the Division Bench is on the binding nature of three Member Bench decision in Akanksha. Following judicial discipline, the Division Bench did consider the Large .....

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Section 129A of the Act to deal with appeal against an order of the Commissioner issued under Section 110A. Learned Consultant Shri M.K. Gupta, Shri B.K. Singh, Shri I.C. Joshiand Shri K.K. Jha, Advocates elaborately argued that as held by various High Courts, the appellate remedy lies before the Tribunal. 14. Appellants relied on following decisions of High Courts : (a) Gentleman Suitings Pvt. Ltd. vs. DGRI - 2012 (12) 1001 - TMI - Raj. High Court ; (b) GirirajSpintex Pvt. Ltd. vs. DGRI - 2012 .....

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s viz. Commissioner (Appeals) or the Tribunal for relief. In many such similar cases Revenue has taken the consistent stand that a statutory appeal lies before this Tribunal against an order passed by the Commissioner under Section 110A. 16. Appellants contended that there is no decision of any higher courts to the effect that an appeal is not maintainable before the Tribunal in such circumstance. 17. Shri K.K. Anand, Advocate appearing as an intervener submitted that provisions of Section 129A .....

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way of a writ-petition seeking release of seized goods. There was no appeal against the decision of the Larger Bench in Akanksha by the party to the High Court as stated by the Revenue during arguments. The Hon'ble Bombay High Court decided the writ-petition and passed orders granting certain relief to the party. Hence he submitted that the Larger Bench decision is not the subject matter of the decision by the Hon'ble Bombay High Court. 18. Shri S. Vasudevan, Advocate also appearing as a .....

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be appealed against is provided. He further submitted that even interlocutory orders passed by statutory authorities are appealable. He relied on decision of Hon'ble Madras High Court in Metal Weld Electrodes vs. CESTAT, Chennai reported in 2014 (299) E.L.T. 3 (Mad.). He submitted that courts have held that an appeal lies against an order fixing conditions for provisional assessment. On the same analogy orders issued under Section 110A are also appealable, is the contention. Summary of subm .....

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; (b) a decision/order to release or not to release seized goods provisionally, by the Commissioner as an Adjudicating Authority, is subject to judicial review by courts only but is not subject to a statutory appeal to CESTAT ; (c) simple communication of a decision by an Adjudicating Authority or not granting provisional release on simply intimating the person who has requested for provisional release cannot be a subject matter of an appeal before CESTAT. It is an administrative discretion by t .....

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110A : Provisional release of goods, documents and things seized pending adjudication - Any goods, documents or things seized under Section 110, may, pending the order of the adjudicating authority, be released to the owner on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require. Section 129A : Appeals to the Appellate Tribunal - (1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against s .....

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nder Section 130, as it stood immediately before that day: ANALYSIS OF THE LARGER BENCH DECISION IN AKANKSHASYNTAX : 21. In Akanksha, appellants were before the Tribunal against an order of the Commissioner of Customs (General) under Section 110A of Customs Act, 1962. Revenue raised a preliminary objection on maintainability of the appeal itself on the ground that the same was not within the purview of the provisions of Section 129A of Customs Act, 1962. Learned Member (Judicial), relying on the .....

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d the above decisions and relying on Navshakti Industries Pvt. Ltd. vs. CC, New Delhi - 2008 (225) E.L.T. 522 (Tri. - Del.) held that the statute does not provide for an appellate remedy to the Tribunal and hence Tribunal cannot assume such powers. On reference due to difference of opinion, the learned Vice - President, as the third Member agreed with the Member (Technical) and held that an order in respect of provisional release of the goods is an interim order pending an order of the adjudicat .....

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udication. The second reason was that the request for release of goods and the consequent order by Commissioner was as per directions of the High Court (in that case) and it was open to the appellant to make a grievance to that effect before the High Court. Hence, only one of the reasons provided to arrive at the finding in Navshakti Industries is a relevant ratio - viz. that a provisional release order cannot be deemed to be an order in the nature of adjudication. No detailed discussion precede .....

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24. On a careful consideration of the reasoning and reliance placed on Navshakti by the majority in Akanksha (supra) and of the decision in Navshakti itself, we find that they are neither predicated on sound legal principles nor on correct appreciation of relevant provisions of Customs Act, 1962. Apart from this specific basis, even on general principles of availability of an appellate remedy against orders of statutory authority exercising powers in issuing orders, having legal consequences, w .....

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order of the adjudicating authority ; (b) it is essentially an administrative decision i.e. non-adjudicatory order though issued by an adjudicating authority. 26. The correctness or otherwise of the above contention can be decided on a deeper analysis of the scope of powers vested under Section 110A. 27. Section 110 of the Act empowers that if the proper officer has reasons to believe that any goods are liable to confiscation under this Act, he may seize such goods ; upon seizure the said goods .....

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Order for provisional release restores the seized goods to the owner. The conditions imposed for such restoration is decided by the adjudicating authority. Such decision will certainly have legal consequence to the owner of goods. 29. Revenue's contention is that no statutory appellate remedy is provided against such decision or orders issued under Section 110A. What is relevant to consider is whether such appellate remedy; (i) clearly falls within the ambit of the provisions of Section 129 .....

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by an adjudicating authority. Revenue argues that though the order is by an adjudicating authority, it is not an adjudication order. This will take us to who is an "adjudicating authority". Section 2 (1) states that "adjudicating authority" means any authority competent to pass any order or decision under this Act…". Having arrived at the uncontested conclusion that an order under Section 110A is issued by adjudicating authority it will be illogical to infer that .....

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The issue involved was whether an interim order of pre-deposit is an order which can be appealed against before the Tribunal. After examining exhaustively the various case laws, the Tribunal concluded that an order of pre-deposit passed by the appellate Commissioner, in exercise of discretion under Section 35F of the 1944 Act amounts to an order passed under the generality of appellate jurisdiction under Section 35, an appeal lies to the Tribunal against such order as well, apart from an appeal .....

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egarding the administrative nature of an order under Section 110A. Revenue asserts that there is no lis at the time of issuing order of release of seized goods. Thiscontention is misconceived. Neither Section 110A nor any other provision of the Act prescribes specific preset conditions or guidelines for exercising such powers. Apparently the adjudicating authority exercises wide ranging discretionary powers, not fretted by any express statutory conditions, pre-listing the types of order that cou .....

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goods, as not an adjudicating authority, is artificial and fallacious. Hon'ble Supreme Court in Raj Kumar vs. CIT - (2007) 2 SCC 181 held that when civil consequences ensue, there is hardly any distinction between an administrative order and a quasi-judicial order. The Hon'ble Apex Court observed that there might have been difference of opinions at one point of time, but it is now well settled that the thin line between an administrative and a quasi-judicial order now stands obliterated. .....

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not appealable before CESTAT. Another case relied on by Revenue is of Hon'ble Delhi High Court in Jatin Ahuja (supra). The Hon'ble court was mainly dealing with the time limit for holding seized goods with reference to provisions of Sections 110 (2), 110A and 124 of Customs Act, 1962. This is clear from para 6 of the order. The issue was not regarding apealability of an order under Section 110A. 34. An order for provisional release of seized goods is not to be issued mechanically. The sa .....

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ecision or order passed by Commissioner of Customs as adjudicating authority". There is neither a textual or normative warrant for such interpretation. 35. Another submission by Revenue is that an order under Section 110A is an interim order of the Adjudicating Authority and hence no appeal is available under Section 129A. Such argument apart from being fallacious also presumes that in all cases of seizure of goods, there will be a "final" adjudication order. It may not be so. The .....

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g final outcome. However, an order for provisional release is a stand alone order irrespective of the final outcome of investigation or adjudication. The same is not predicated by possible later outcomes. Refusal to release the goods or imposing harsher conditions for release will certainly have legal adverse consequences to the owner of the goods. Hence, the owner has to have a remedy which is statutorily provided under Section 129A. 37. Revenue further contended that the appealability of an or .....

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expressions or generally worded legislation. However, rule of law demands that legislative text should be given its full and appropriate meaning and force. Possible administrative inconvenience cannot provide valid jurisdiction for not following certain procedures and to eclipse the remedy mandated by legislation. Scope of Section 129A : 38. Any person aggrieved by an order or decision by the Principal Commissioner of Customs or Commissioner of Customs as an adjudicating authority may file appea .....

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l pronouncements covering the above subject. The Hon'ble High Court of Delhi in the case of Gurdeep Kaur [order dated 17/09/2015 in WP (C) 4152/2015] held that the order issued under Section 110A falls within the description of "order or decision passed under the Customs Act"; the court held that the petitioner has approached the court under mistaken view that remedy of appeal is not available under the Customs Act, 1962 and accordingly directed the petitioner to prefer an appeal b .....

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of Delhi in the case of Cantex Chemicals Fibres Pvt. Ltd. - 2014 (310) E.L.T. 50 (Del.) examined the scope of terms "decision or order passed under the Customs Act". The Hon'ble court held that the orders which are having adverse consequences cannot be characterized as merely administrative but made under specific provision of statutory regulations. They fall within the description of "order or decision" even on question of the appropriateness of conditions, with referen .....

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