By TIOL News Service

AHMEDABAD, MAY 25, 2017: THE petitioner carried out re-packing of Muriate of Potash (MOP) on behalf of the exporters, who allegedly exported the said MOP to Malaysia.

Pursuant to an investigation in the matter of export of MOP, the DRI issued a SCN to the petitioner.

After seeking adjournments of the hearing date, the petitioner filed a reply on 07.10.2014, inter alia , requesting for personal hearing in the matter.

It is the case of the petitioner that without granting opportunity of personal hearing in the matter and without properly considering or giving his findings on the written submissions made by the petitioner, the third respondent vide order-in-original imposed penalty of Rs.3,00,000/- u/s 114(i) of the Customs Act, 1962.

The petitioner preferred an appeal before the Commissioner (Appeals), along with an application for condonation of delay.

Vide o-in-a dated 14.10.2015, the appeal came to be rejected on the ground of delay in filing the appeal beyond the condonable delay of thirty days provided under the proviso to section 128 of the Act.

Being aggrieved, the petitioner has filed the present petitions challenging, both, the o-in-o and o-in-a primarily on the ground of breach of the principles of natural justice and that no findings have been given on the written submissions made by them and hence is a non-speaking order.

Another ground is that in respect of the same cause of action, that is, for the same period, essentially on the same evidence, a show cause notice dated 24.01.2011 had been issued by the second respondent, which culminated into an order-in-original dated 30.03.2012, whereby penalty of Rs.75,00,000/- came to be imposed on the petitioner, against which an appeal is pending before the Tribunal.

So also, the petitioner could not file the appeal before the Commissioner(A) within the prescribed period of limitation as it took some time for him to arrange for the funds to make the pre-deposit, which, in fact, was made within the condonable period of thirty days.

The Counsel for the Revenue summed up his submission thus - the statute empowers the Commissioner (Appeals) to condone a delay of thirty days beyond the sixty days prescribed for filing the appeal, and no more; it is well settled that beyond the period of thirty days, as provided in the proviso to section 128 of the Act, the Commissioner (Appeals) has got no power to condone the delay and, therefore, under the circumstances, the impugned order dated 14.10.2015 rejecting the application for condonation of delay, is just, legal and proper, and does not warrant interference by the High Court. Moreover, against the o-in-a, a remedy exists by way of appeal u/s 129A before the Appellate Tribunal and hence the petitions are devoid of merits.

After extracting the provisions of section 128 of the Customs Act (Appeals to Commissioner(Appeals)), the High Court adverted to the apex court decision in Singh Enterprises = 2007-TIOL-231-SC-CX , wherein the court in the context of section 35 of the CEA, 1944, held that the Commissioner(A) did not have the power to condone the delay after the expiry of 30 days' period. Inasmuch as in view of the settled legal position, it could not be said that the impugned order passed by the Commissioner (Appeals) suffers from any legal infirmity warranting interference. [Amchong Tea Estate = 2010-TIOL-63-SC-CX and Hongo India Private Limited= 2008-TIOL-233-SC-CX refers]

On the other points made by the petitioner in the matter of making pre-deposit, the High Court observed -

+ From the language employed in section 129E of the Act, it is evident that the same mandates that the appeal shall not be entertained unless the pre-deposit is made. Filing of an appeal and entertaining of an appeal are not synonymous.

+ The condition contained in clause (6) of Form No. CA-1 has no statutory basis and hence, there cannot be any insistence on payment of pre-deposit prior to filing the appeal . In these circumstances, if such a practice is in fact prevailing, namely, that the memorandum of appeal is being returned if the same is not accompanied with the challan evidencing payment of pre-deposit, such conduct on the part of the respondent authorities has no legal basis.

+ The respondent authorities are duty bound to accept the memorandum of appeal if the same is filed in the prescribed form, without insisting upon the challan evidencing payment of pre-deposit accompanying the same. If the appeal comes up for hearing and the pre-deposit is not paid, the Commissioner (Appeals) may refuse to entertain the same and dismiss it on that ground.

+ Insofar as the present case is concerned, it is not even the case of the petitioner that he had presented the appeal and that the second respondent refused to accept the same unless it was accompanied by a challan evidencing payment of pre-deposit.

+ It appears that the petitioner has proceeded on an assumption that the appeal papers would not be accepted without such challan and has let the statutory period lapse, thereby non-suiting himself as the Commissioner (Appeals) has no power or authority to condone the delay beyond a period of thirty days, even if sufficient cause is shown.

In the matter of the petition filed, the High Court held thus -

Whether there has been a breach of principles of natural justice:

++ In the opinion of this court, what the statute (section 122A of the Customs Act, 1962) prescribes is the maximum number of adjournments that can be granted, but does not say that in every case, three adjournments should, as a matter of course, be granted . If the adjudicating authority does not find sufficient cause, he may not adjourn the proceeding. Therefore, merely because, in all, three adjournments have not been granted to the petitioner, would not tantamount to breach of the principles of natural justice as alleged. Having regard to the overall facts that have come on record, and more particularly considering the fact that in the present case there were a large number of other co-noticees, the court is of the view that the contention regarding breach of principles of natural justice on account of non-grant of three adjournments, does not merit acceptance.

Whether non-speaking order:

++ Having regard to the submissions made in the reply and the findings recorded by the adjudicating authority, it is not possible to say that the adjudicating authority has not given findings in respect thereof. The contention that the impugned order is a non-speaking order as it does not record any findings on the submissions made by the petitioner, therefore, cannot be accepted.

Whether a case of repeated SCNs:

++ From the averments made in the affidavit-in-reply, it is evident that the show cause notice dated 24.01.2011 covered certain shipping bills, whereas the present show cause notice pertains to different shipping bills than those covered by the earlier show cause notice . Therefore, it cannot be said that the earlier show cause notice was in respect of the same cause of action. In the light of the above, it is evident that the petitioner has failed to establish any breach of the principles of natural justice warranting exercise of the extraordinary jurisdiction by this court under Article 226 of the Constitution of India.

Availability of Alternate remedy:

++ Petitioner has approached this court only after his application for condonation of delay came to be rejected by the Commissioner (Appeals). It is not as if the petitioner had directly approached this court invoking its writ jurisdiction on the ground that the order-in-original has been passed in breach of the principles of natural justice. The petitioner, therefore, all the while intended to prosecute the remedy of appeal under section 128 of the Act. It is only because the appeal became time barred that the petitioner, after the rejection of his application for condonation of delay, has moved the present petition.

++ If such course of action is permitted, the High Court would be flooded with matters where the parties have not filed appeals within the prescribed period of limitation, converting the High Court into an alternative forum for time barred appeals. Such a practice needs to be discouraged.

++ That is not to say that in a given case the High Court may not interfere. …However, insofar as the present case is concerned, in the absence of any breach of the principles of natural justice or lack of jurisdiction or improper exercise of jurisdiction on the part of the adjudicating authority being made out, when there is an efficacious alternative remedy of appeal before the Appellate Tribunal under section 129A of the Act, the petition deserves to be dismissed as not maintainable.

The petitions were dismissed.

(See 2017-TIOL-990-HC-AHM-CUS)