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Mydream Properties Private Limited. Versus Commissioner of Customs (Imports) , Mumbai.

2018 (1) TMI 500 - BOMBAY HIGH COURT

Whether the Customs, Excise and Service Tax Appellate Tribunal has no more jurisdiction to entertain an Application for stay of the order impugned before it? - Held that: - the Appellate Tribunal dealing with an appeal under the Customs Act has incidental or ancillary powers to grant appropriate interim relief. As appellate jurisdiction has been conferred on the Appellate Tribunal, by necessary implication, in a given case, the Appellate Tribunal has power to grant appropriate interim relief .....

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rs)94791/15 dated 28th August 2015 is restored to the file of the Customs, Excise and Serviced Tax Appellate Tribunal, West Zonal Bench, Mumbai - appeal allowed in part. - CUSTOMS APPEAL NO. 86 OF 2016 - Dated:- 8-12-2017 - A.S. OKA AND A.K. MENON, JJ. Mr.Hormaz Daruwalla with Mr.S.A.K.Najam EsSani i/b. Maneksha and Sethna for the appellant. Mr.Pradeep S. Jetly for the respondent. ORAL JUDGMENT: (Per A.S.Oka, J.) This appeal was admitted by order dated 28th August 2017 by framing following subst .....

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Under the said order, penalty was imposed on the petitioner. In this petition, we are concerned with the direction issued under clause (vii) of paragraph47 of the order-in-original dated 5th June 2015, which reads thus: (vii) I confiscate the goods of ascertained Assessable Value of ₹ 17,89,45,942/( i.e. ₹ 17,74,67,817/for the Yacht + ₹ 14,78,125/for the 'VSAT connection with dish antenna) imported under the Bill of Entry N 911190 dated 11.09.2009 Section 111 (m) & 111( .....

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oner made an application before the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai (for short Appellate Tribunal ) invoking inherent jurisdiction of the Appellate Tribunal seeking stay of the direction regarding deposit of redemption fine and/or praying for dispensing with the requirement of deposit of redemption fine. By the impugned order dated 18th April 2016, the said application made by the petitioner has been rejected by the Appellate Tribunal by holding that .....

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rocedural Rules, sufficient powers are vested in the Appellate Tribunal to stay the recovery of the redemption fine in the interests of justice. He relied upon various decisions to which we have made a reference in the subsequent part of the judgment. 4. The learned counsel appearing for the respondent opposed the petition by pointing out that after section 129E is brought on statute book, once the appellant before the Tribunal complies with the requirement of deposit of 7.5% of the duty and pen .....

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em the goods on payment of redemption fine and, therefore, there is no question of anybody recovering the redemption fine during the pendency of the appeal. He submitted that thus, after making compliance with the requirement of statutory deposit under section 129E of the Customs Act, there is no occasion for the Tribunal to entertain any application for interim relief. It is submitted that in the absence of any express provision either in the Act or the Procedure Rules, there is no inherent pow .....

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is material. Clauses4.1 to 4.3 of the said circular read thus: 4. Recovery of the Amounts during the pendency of Appeal: 4.1 Vide Circular No.967/1/2013 dated 1st January 2013, Board has issued detailed instructions with regard to recovery of the amounts due to the Government during the pendency of stay applications or appeals with the appellate authority. This Circular would not apply to cases where appeal is filed after the enactment of the amended Section 35F of the Central Excise Act, 1944 .....

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e copy of appeal memo filed with the appellate authority; 4.3 Recovery action, if any, can be initiated only after the disposal of the case by the Commissioner (Appeal) / Tribunal in favour of the Department. For example, if the Tribunal decides a case in favour of the Department, recovery action for the amount over the above the amount deposited under the provisions of Section 35F/ 129E may be initiated unless the order of the Tribunal is stayed by the High Court/ Supreme Court. The recovery, i .....

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ment of deposit of redemption fine. Thus, the prayer was for permitting the petitioner to redeem the goods without payment of redemption fine. The question is whether the Appellate Tribunal has jurisdiction to entertain such an application. Our attention was invited to the decision in the case of Mr.Venugopal Engineering Ltd. v. Union of India Customs Appeal No.6/2013 decided on 10th June 2014, and, in particular what is held in paragraph 13, which reads thus: 13. The appellant has also made a g .....

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stay of the order being challenged before the Tribunal. The jurisdiction of the Tribunal to stay the order being appealed against before it is not under Section 129E of the Act but is in the exercise of its inherent power as an Appellate Authority. This power is to be exercised in exceptional circumstances. In this case, nothing has been brought to our notice to show circumstances which would warrant the Tribunal exercising its inherent power to stay the order dated 30 November 2011 of the Comm .....

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as rendered prior to the amendment to section 129E is immaterial as what is held by the Division Bench is that there is an inherent power vested in the Appellate Tribunal to stay the order appealed against before it. The said view taken by the Division Bench is well supported by a leading decision of the Apex Court in the case of Income-Tax Officer, Cannanore v. M.K.Mohammed Kunhi (1969) 71 ITR 815 (SC). In the said decision, the Apex Court had an occasion to consider the powers of the Appellate .....

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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 the Benches shall hold their sittings. The Apex Court observed that there can be no manner of doubt that under the provisions of the Income Tax Act or the Income Tax Appellate Tribunal Rules, 1963, powers have been expressly conferred upon the Appellate Tribunal to st .....

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aling with appeals are of the widest amplitude and have in some cases been held similar to and identical with the powers of an appellate court under the Civil Procedure Code : See Commissioner of Income tax, Bombay City v. Hazarimal Nagji & Co. ([1962] 46 I.T.R. 1168,) and New India Assurance Co. Ltd. v. Commissioner of Income tax, Excess Profits Tax ([1957] 31 I.T.R. 844,). In Polini v. Gray ([1879] 12 Ch.D 438.), this is what Jessel M.R. said about the powers of the Court of Appeal to gran .....

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e the hearing of the final appeal". (underline added) The Apex Court distinguished certain decisions pointed out which held that the Appellate Tribunal does not possess any power to grant stay. Ultimately, the Apex Court proceeded to held thus: Section 255(5) of the Act does empower the Appellate Tribunal to regulate its own procedure, but it is very doubtful if the power of stay can be spelt out from that provision. In our opinion the Appellate Tribunal must be held to have the power to gr .....

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execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceeding as will prevent the appeal if successful from being rendered nugatory. A certain apprehension may legitimately arise in the minds of the authorities administering the Act that, if the Appellate Tribunal proceed to stay recovery of taxes or penalties payable by or imposed on the assessees as a matter of course, the revenue will be put to great loss because of the inordinate d .....

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al is satisfied that the entire purpose of the appeal will be frustrated or rendered nugatory by allowing the recovery proceedings to continue during the pendency of the appeal. (underline added) In so many words, the Apex Court held that the Appellate Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction. It was further held that when section 254 confers appellate jurisdiction on the Appellate Tribunal, it impliedly grants the power of do .....

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hat only when a strong prima facie case is made out that such power can be exercised. 9. The learned counsel for the petitioner has relied upon Rule 41 of the Procedural Rules. Rule 41 reads thus: 41. Orders and directions in certain cases. The Tribunal may make such orders or give such directions as may be necessary or expedient to give effect or in relation to its orders or to prevent abuse of its process or to secure tile ends of justice. In the case of J.K.Syntehtics Ltd. v. Collector of Cen .....

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rt in the case of Commissioner of Income-Tax, Delhi v. Bansi Dhar & Sons (1986) 157 ITR 665 (SC). In the said case, the Apex Court was dealing with the power to grant interim relief pending a reference to this Court or the Apex Court. This decision will have no application as the Apex Court observed that after making a reference, the appeal remains pending and, therefore, the Appellate Tribunal retains its jurisdiction and can grant interim relief pending the reference. 11. We have already r .....

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lause (vii) of paragraph47 of the impugned order which has been quoted earlier. 12. As held earlier, the Appellate Tribunal dealing with an appeal under the Customs Act has incidental or ancillary powers to grant appropriate interim relief. As appellate jurisdiction has been conferred on the Appellate Tribunal, by necessary implication, in a given case, the Appellate Tribunal has power to grant appropriate interim relief. The interim relief can be granted where, in a given case, the order impugn .....

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