By TIOL News Service

NEW DELHI, AUG 08, 2014: THE following substantial question of law is involved in this appeal -

"Whether the said Tribunal had not erred in law in directing remand of the matter to the Commissioner of Customs (Appeals) even though the said Tribunal had categorically held that the Commissioner of Customs (Appeals) did not have the jurisdiction to hear the appeal?"

The facts are that goods imported by the appellant were seized by the Customs authorities.

The appellant applied for provisional release u/s 110A of the Customs Act, 1962. By an order dated 03.05.2013, the Commissioner of Customs (Preventive) directed the provisional release of the goods subject to the appellant giving a bond for 100% of the value of the imports with a bank guarantee for 25% of the said value and payment of differential duty in cash. This order was passed in the file [ called for by the High Court ] and the same was communicated by the Assistant Commissioner by a letter wherein it is mentioned that the "competent authority" had acceded to the request made by the appellant.

The High Court viewed that the revenue authorities should make it clear as to who the "competent authority" is when it sends out such communications as this would have saved a lot of confusion which had arisen in the present case. [The High Court observed - We, therefore, feel that this order be placed before the Chief Commissioner of Customs (Import & General) as well as the Chief Commissioner of Customs (Preventive) so that future communications made by the customs authorities make it clear as to which particular authority has passed the order and not just mention the words "competent authority" .]

Be that as it may, since the order for provisional release was not to the liking of the appellant they sought certain modifications and the same was modified by the Commissioner of Customs (Preventive) and communicated to the appellant, again in the same manner.

Before this communication was received the appellant filed a WP challenging the conditions imposed but later the same was withdrawn on the ground that the petitioner had an alternative remedy.

After receipt of the order of modification of conditions for provisional release, the appellant filed an appeal before the Commissioner of Customs (Appeals) and the same was disposed of by relaxing some of the conditions.

Incidentally, while passing the order, the Commissioner (A) had noted the following - It has been ascertained from the concerned branch that the competent authority is the Additional Commissioner of Customs under Section 110 A of the Act ibid, who is the Adjudicating Authority in the instant case. Hence, the appeal falls within the jurisdiction of this Office.

The High Court observed -

"10. In our view, the Commissioner of Customs (Appeals) was not at all correct in observing that the Additional Commissioner of Customs was the adjudicating authority in the present case. We have already pointed out above that the provisional release orders dated 03.05.2013 and 17.05.2013 were both passed by the Commissioner of Customs (Preventive). Therefore, the Commissioner of Customs (Appeals) was wrong in concluding that the appeal fell within the jurisdiction of the office of the Commissioner of Customs (Appeals)."

For this and other reasons, being aggrieved by the order passed by the Commissioner of Customs (Appeals), the revenue filed an appeal before the Tribunal.

The Tribunal took the view that the Commissioner of Customs (Appeals) had no jurisdiction to hear the said appeal.

However, this is what the Tribunal ordered -

"4. I find force in the department's contention. The Commissioner (Appeals) has passed order without ascertaining the facts as stated above as well as legal position. Order passed by Commissioner (Appeals) is contrary to the provisions of law.  I, therefore, set aside this impugned order and remand the matter back to the Commissioner (Appeals) who should pass an appealable order after going through the grounds of appeal taken by the Revenue and hearing both appellant and the respondent. Order in remand proceedings should be passed within 3 months from the date of passing this order. Ordered accordingly."

It is this order which is appealed before the High Court.

The High Court observed that the Tribunal was right in coming to the conclusion that the Commissioner of Customs (Appeals) did not have the jurisdiction to hear the appeal and to pass the order dated 10.06.2013 but the Tribunal was wrong in remanding the matter to the very same Commissioner of Customs (Appeals) to hear the case on merits after having held that he did not have the jurisdiction to entertain the appeal arising out of the orders of provisional release passed by the Commissioner of Customs (Preventive).

Inasmuch as since the Tribunal having once concluded, and rightly so, that the Commissioner of Customs (Appeals) did not have the jurisdiction to entertain the appeal filed by the appellant, ought to have set aside the order dated 10.06.2013 and decided the matter itself on merits, the High Court added.

The appellant submitted that that the Tribunal, while considering the question of jurisdiction of the Commissioner of Customs (Appeals), had placed reliance on a Board Circular No. 23/09-Customs dated 01.09.2009 (which Circular has been amended by Circular No. 24/2011 dated 31.05.2011) and in terms of which, since in the present case the duty involved was less than Rs.50 lacs, the adjudication ought to have been done by the Additional Commissioner/Joint Commissioner and, therefore, the appeal would lie to the Commissioner of Customs (Appeals).

To this submission, the High Court observed - The conclusion arrived at by the learned counsel for the appellant is based on a faulty premise and on ignorance of the factual position. The faulty premise is that the Commissioner of Customs cannot adjudicate a matter which involves duty of less than 50 lacs. The extract of the circular dated 31.05.2011 makes it clear that the Commissioner of Customs has authority to adjudicate all cases without limit. Therefore, the Commissioner of Customs (Preventive) acted within his jurisdiction when the orders dated 03.05.2013 and 17.05.2013 were issued by him. The learned counsel for the appellant is factually wrong because the order was passed by the Commissioner of Customs (Preventive) and not by an Additional Commissioner of Customs or by a Joint Commissioner of Customs. Therefore, the submission made by the learned counsel for the appellant that the order-in-appeal dated 10.06.2013 did not suffer from lack of jurisdiction, cannot be accepted.

The High Court concluded -

++ The impugned order passed by the Tribunal to the extent that the matter has been remanded to the Commissioner of Customs (Appeals) is set aside. The logical consequence of this is that the appeal filed by the revenue before the Tribunal stands allowed.

++ However, the appellant herein is not without a remedy. He may file an appeal before the Tribunal challenging the orders dated 03.05.2013 and 17.05.2013.

++ In case such an appeal is filed, the Tribunal shall examine the same on merits and dispose of the same as expeditiously as possible, preferably within two months from the date of filing of the appeal.

And so, the substantial question of law stands answered by holding that the Tribunal was not correct in law in remanding the matter to the Commissioner of Customs (Appeals) after having held that the Commissioner of Customs (Appeals) had no jurisdiction to hear the appeal.

The appeal was allowed.

(See 2014-TIOL-1329-HC-DEL-CUS)