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TMI Blog2024 (9) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellate Tribunal is justified?" Issue notice to the respondent. Paper book be filed within three months. List the appeal for final hearing after three months." 4. As per section 130A of the Act, the Principal Commissioner of Custom, Commissioner of Custom or the other party may, within one hundred and eighty days of the date upon which he is served with notice of an order under section 129B of the Act passed before 1st day of July,2003, by application in prescribed form, accompanied with application made by the other party by a fee, apply to the High Court to direct the Appellate Tribunal to refer to the High Court any question of law arising from such order of the Tribunal. 5. As the CESTAT has passed the order on 25.06.2003 i.e. prior to 1st July,2003, applicant-one of the co-noticee has preferred this application under section 130A of the Act. 6. Sub-section (4) of section 130A of the Act provides that if on an application made under sub-section (1), the High Court directs the appellate Tribunal to refer the question of law raised in the application the Appellate Tribunal shall, within one hundred and twenty days of the receipt of such application, draw up a statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause sent by the noticees and after hearing the parties, found that the show cause notice in respect of Bill of Entry Nos. F-4120 and 3058 to be unsustainable. Insofar as the Bill of Entry No. 4316 is concerned, the adjudicating authority held one-Solly Perumal, Customs House Agent, to be responsible and made him liable for payment of penalty of Rs. 25 lakhs. 4. In appeal, the Customs, Excise and Gold (Control) Appellate Tribunal (now Customs, Excise and Service Tax Appellate Tribunal) by its impugned order dated 25.06.2003 maintained the order of the adjudicating authority insofar as the goods imported against Bill of Entry Nos F-4120 and 3058 are concerned. Insofar as the goods imported under Bill of Entry No. 4316 is concerned, the learned Tribunal found another noticee - Om Prakash Punjabi also to be liable for payment of penalty of Rs. 50 lacs. The learned Tribunal, however, reduced the penalty imposed on Solly Perumal from 25 lacs to 5 lacs. Aggrieved, the Revenue has filed this appeal upon grant of special leave under Article 136 of the Constitution. 5. At the very outset, we do not see why instead of filing an appeal before the High Court under Section 130 of the Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, do not find the order of the learned Tribunal to be, in anyway, open to correction. Consequently, we dismiss the appeals of Revenue and affirm the order dated 25.06.2003 passed by the learned Tribunal." 10. In view of the aforesaid order passed by the Hon'ble Supreme Court wherein the facts are narrated in detail, it appears that this application would not survive as the following question of law proposed by the applicant stands answered by the aforesaid Judgement and Order. "Whether imposition of penalty on the appellant by the Appellate Tribunal is justified?" 11. As the Supreme Court has succinctly narrated the facts in brief the same are not repeated for sake of brevity. 12. Learned advocate Mr. Chetan Pandya for the applicant submitted that the impugned order passed by the CESTAT is perverse as the CESTAT has failed to take into consideration the contradictory statements of Solly Perumal who is made approver by the department. 12.1 It was pointed out that there is nothing on record to show that the applicant was proprietor of either M/s. Natraj Metal or M/s. Ram Metal Industries. 12.2 The CESTAT has, after considering the evidence on record, arrived at find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... borate this part of the Soly Perusal's evidence. 62. In a statement given on 6.8.93 on the very day on which goods imported in the name of Kam Metal Industries were seized, Shri Soly Perumal refers to his filing Bill of Entry on 4.6.93 in the name of R.K. International on behalf of Shri Om Prakash Punjabi and to an information which he received later that the consignment contained ball bearings under the guise of lead scrap. He also states that Bill of Entry dated 30.7.93 was filed in the name of M/s. Ram Metal Industries on the instruction of Shri Om Prakash Punjabi. He further states that Shri Om Prakash Punjabi was found to be filing documents in different names. In the two statements which he had given on 8.8.93 he has referred to name of Suresh Dhoka (Shresh Bhai) a close associate of Shri Om Prakash Punjabi who used to bring shipping documents on behalf of Shri Om Prakash Punjabi. Solly Perumal has stated that Om Prakhash Punjabi and sent the amount and all relevant papers such as invoice, packing list, Bill of Lading and IEC Code through his carrier which was received by Shri Kanthibhai who was waiting at Gandhidham Railway Station. In his statement dated 1.1.94 Kanthibhai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that on 21.7.93 they had issued a demand draft No. 62061 in favour of M/s. Triniti Shipping Gandhidham for Rs. 1,53,000/and the purchaser of the aforesaid draft was Ahmedabad Urban Bank Cooperative Bank Lids, Ahmedabad. The demand draft was issued against cheque of the Ahmedabad Urban Cooperative Bank Ltd. In his statement recorded under Section 1098 of the Customs Act, 1962 Shri Nanilal Jayantilal Akhani, former Manager of Ahmedabad Urban Cooperative Bank Ltd. Sarangpur Branch, Ahmedabad stated that on 21.7.93 Om Prakash Punjabi who is the Chairman of Ahmedabad Urban Cooperative Bank Lid. instructed him to issue a draft for Rs. 1,35,000/ in the name of Trinity Shipping Gandhidham. He had also stated that two persons who cane with the cash, namely, Kinhorbhai and Ashish Bhai are associated with Om Prakash Punjabi and they always used to come to thy Rank in connection with the Bank transaction of the Chairman, He had to point to Shri Om Prakash Punjabi that there are instructions from Reserve Bank not to issue drafts for large amounts against cash. There is also evidence of Kamlesh Pp, Thakkar, Apprenctice Clerk in the Ahmedabad Urban Cooperative Bank and Shri Bharat Sumanlal Jani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re appropriately in the area of administration) but generally we find that there is evidence in this case to show that they were associating too closely with CHA which is inappropriate, given the nature of their duties. The then the Commissioner of Customs, Kandla who passed the adjudication order dated $.1.94 has also failed to co-ordinate the investigations of his officers with the investigations of DRI and to give a correct direction to the whole proceedings. On seizure of the consignment in the name of Ram Metal Industries, if immediate steps had been taken to follow up the movement of the goods cleared immediately before it in the name of Natraj Metals Pvt. Ltd., the result could have been different. 72. We have already entered a findings that Shri Om Prakash Punjabi the real importer of the goods imported in the name of M/s. Rae Metal Industries. That was a clear case of smuggling of ball bearing in the guise of cheap lead scrap. As against the declared value of less than Rs. 2 Lakhs the assessed value is Rs. 2.4 crores. He is, therefore, Clearly liable to penal action under Section 112 of the Customs Act. Taking into account the deliberate fraud involved and the value of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appealed against or may refer the case back to the authority with such direction as it may think fit for fresh adjudication or a decision, and hence, the power of determination or imposition of penalty on an importer under Section 112 (a), is not available to the Tribunal. This jurisdictional limitation has not been borne in mind by the Tribunal while passing the impugned order. Accordingly, questions (i) and (ii) stand answered against the Revenue. 12.5 Referring to the above decision, it was submitted hat as the adjudicating authority has chosen not to levy the penalty upon the applicant and the CESTAT not being the adjudicating authority as defined in section 2 (1) of the Act, could not have assumed the jurisdiction to levy the penalty for the first time. It was further submitted that the CESTAT has also not given any reason for levy of penalty of Rs. 50 lakh upon the applicant by giving any opportunity to the applicant. It was also submitted that the CESTAT therefore could not have levied penalty of Rs. 50 Lakh without any basis. 12.6 Learned advocate Mr. Pandya submitted that the applicant has now, after lapse of more than 20 years after filing of this application, become an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aware that the Income-tax Appellate Tribunal is a fact-finding Tribunal and if it arrives at its own conclusions of fact after due consideration of the evidence before it this court will not interfere. It is necessary, however, that every fact for and against the assessee must have been considered with due care and the Tribunal must have given its finding in a manner which would clearly indicate what were the questions which arose for determination, what was the evidence pro and contra in regard to each one of them and what were the findings reached on the evidence on record before it. The conclusions reached by the Tribunal should not be coloured by any irrelevant considerations or matters of prejudice and if there are any circumstances which required to be explained by the assessee, the assessee should be given an opportunity of doing so. On no account whatever should the Tribunal base its findings on suspicions, conjectures or surmises nor should it act on no evidence at all or on improper rejection of material and relevant evidence or partly on evidence and partly on suspicions, conjectures or surmises and if it does anything of the sort, its findings, even though on questions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect that the contradictory statements given by the Solly Perumal are required to be believed as there is no contradiction. 12.14 In support of his submission, reliance was placed on the decision of Shri Tribhovandas Vithaldas vs. Commissioner of Income Tax reported in [1986] 159 ITR 236 wherein it is held as under: "12 After hearing at length the learned advocate for the assessee as well as the learned counsel for the Revenue, we, however, unfortunately find ourselves unable to answer the questions. The reason for our inability is, with respect to the Tribunal, its cryptic order since it is on the finding of fact made by the Tribunal that we have to answer the question of law arising from the order of the Tribunal. It is axiomatic to say that the Income-tax Appellate Tribunal is a fact-finding forum and, therefore, it is necessary for it that every fact for and against must have been considered with due care and the Tribunal is under an obligation to give its finding so as to clearly indicate as to precisely what were the questions arising for its determination, what was the evidence for and against on the record in regard to each one of these questions and what were its findi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court in Civil Appeal filed by the respondents challenging impugned order dated 25.06.20263 passed by the CESTAT, the doctrine of merger would apply and therefore, this application is required to be rejected as no question of law can be said to have arisen from the order of the CESTAT in view of the Judgement and Order passed by the Hon'ble Supreme Court in Civil Application No. 10347-10392 of 2011. 13.1 It was submitted that the CESTAT has arrived at a finding of fact being the last authority on facts, no question of law would arise from such findings of fact arrived at by the CESTAT. It was submitted that the contention raised on behalf of the applicant challenging order of the CESTAT on facts therefore are required to be rejected. Learned advocate Mr. Khanchandani referred to para 28 of the impugned order passed by the CESTAT wherein, the contention of the revenue about the similarities in the consignment of M/s. R.K. International, Natraj Metals and M/s. Ram Metal Industries are recorded as under: "28. The credibility of Shri Solly Perumal's statements therefore creates serious doubts. It is Solly's case that all the three consignments namely M/s. R.K. International, M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground of contradiction. 13.3 It was further submitted that when the CESTAT considered the similarities shown in the transaction of import of lead scrap by the three entities but the import was made of the ball bearing and involvement of the applicant who has chosen not to respond to the show cause notices issued by upon him, no interference is required to be made in the impugned order of the CESTAT for levy of the penalty upon the applicant. 13.4 It was submitted that the CESTAT, in para 72 of the impugned order, has considered the ingredients of section 112 by referring to the value of the declared value and the assessed value and thereafter exercised the discretion of levy of penalty of Rs. 50 lakh which does not require any interference as no question of law can be said to have arisen from the impugned order of the CESTAT. 14. Having heard learned advocates for the respective parties and considering the Judgement and Order dated 02.08.2017 passed by the Hon'ble Apex Court in Civil Appeal No. 10347-10392/2011 which is reproduced here-in-above, the question we are left with to consider is whether the impugned order of the CESTAT dated 25.06.2003 which was Challenged before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reversed or modified at the SLP stage obviously that order cannot also be affirmed at the SLP stage. To sum up our conclusions are :- (i) Where an appeal or revision is provided against an order passed by a court, tribunal or any other authority before superior forum and such superior forum modifies, reverses or affirms the decision put in issue before it, the decision by the subordinate forum merges in the decision by the superior forum and it is the latter which subsists, remains operative and is capable of enforcement in the eye of law. ii) The jurisdiction conferred by Article 136 of the Constitution is divisible into two stages. First stage is upto the disposal of prayer for special leave to file an appeal. The second stage commences if and when the leave to appeal is granted and special leave petition is converted into an appeal. (ii) Doctrine of merger is not a doctrine of universal or unlimited application. It will depend on the nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or capable of being laid shall be determinative of the applicability of merger. The superior jurisdiction should be capable of reversi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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