By TIOL News Service

MUMBAI, FEB 27, 2014: YOU have to hand it to the Revenue to challenge the order of the Tribunal and get a stick in return!

The short facts of this interesting case go thus -

++ TheTribunal had passed an order dated 17.05.2013 wherein stay was granted and pre-deposit of the dues adjudged against the appellant was waived and all further proceedings pursuant to the adjudication order was stayed subject to the appellant keeping the Bond for Rs.96,56,83,838/- and the Bank Guarantee for the duty demand of Rs.9,24,04,082/- alive.

++ The appellant complied with the said directions but the Customs Authorities were not permitting them to take the vessel out of India for executing certain urgent work.

++ So, the appellant filed a Miscellaneous Application praying that the CESTAT give suitable directions to the Customs authorities.

++ The Bench observed that vide the Stay order all proceedings pursuant to adjudication order have been stayed by the Tribunal and, therefore, the Customs authorities cannot refuse to release the vessel or allow the vessel to be used by the appellant as they wish. Moreover, no written order was passed by the Customs Authorities in this regard, the Bench observed.

So, the CESTAT directed the Revenue representative to ascertain the facts and inform the Tribunal and also emphasized that if the Customs did not want the appellant to take vessel out of India, they should pass a written order stating the reason therefor and cannot pass any oral instructions. This order dated 20.01.2014 was reported by us as (2014-TIOL-180-CESTAT-MUM). The Bench had also listed the matter for compliance on 27.01.2014.

It seems that on 24.01.2014 the Customs authorities passed an order rejecting the request of the appellant and refused permission to the appellant to take the vessel out of India.

When the matter came up for compliance on 27.01.2014, the appellant produced before the CESTAT the aforementioned order dated 24.01.2014 and requested for indulgence in the matter.

The Bench observed [See 2014-TIOL-289-CESTAT-MUM]

3. Inasmuch as vide order dated 17/05/2013 all proceedings initiated by the Customs have been stayed, we direct the Customs authorities to release the vessel forthwith and allow the vessel to be taken out of India, to the Sultanate of Oman and bring back the same within a period of six months subject to the appellant executing an undertaking to the Commissioner of Customs (Imports), New Custom House, Mumbai, to bring back the vessel within a period of six months from the date of release of the vessel.

Against this order of the CESTAT,the Customs authorities filed an appeal before the Bombay High Court.

The following question of law has been raised by the revenue -

"Whether the CESTAT is right in law in directing the revenue to release the confiscated vessel while exercising its jurisdiction under Section 129E of the Customs Act, 1962?"

The High Court observed -

"6) The order passed by the Tribunal on 17 May 2013 was not an order passed only in exercise of jurisdiction under Section 129E of the Customs Act, 1962 dispensing with requirement of depositing duty and penalty but also in exercise of its inherent powers as it stayed the order dated 14 February 2013 of the Commissioner of Customs in appeal before it. The order dated 27 January 2014 which is impugned before us is not an order passed under proviso to Section 129 of the Customs Act 1962 but is an order passed by the Tribunal in its inherentjurisdiction in exercise of it powers as an appellate authority in a pending appeal."

Holding that the question of law as proposed by the revenue is not a substantial question of law, the High Court held that therewas no reason to entertain the appeal.

In fine, the Revenue appeal was dismissed.

There was also a parting comment -

"We trust that now the revenue would expeditiously implement the order of the Tribunal."

In passing: Hopefully, the Revenue should not be contemplating more adventurous missions! And, by the way, another application filed by the appellant before the CESTAT praying for an early hearing in this case has been allowed by the Tribunal and the appeal is listed for final hearing on 3rd April, 2014. [See (2014-TIOL-298-CESTAT-MUM)]

(See 2014-TIOL-243-HC-MUM-CUS)