By TIOL News Service

MUMBAI, OCT 22, 2018: APPEALS have been filed u/s 130 of the Customs Act, 1962 and section 35G of the CEA, 1944 by the assessee-appellants against the orders passed by the CESTAT, Mumbai.

Respondent Revenue raised a preliminary objection about hearing of these appeals at the principal seat of the High Court at Mumbai.

The issue is -

Whether the appeals arising under Section 130 of the Customs Act and Section 35G of the Central Excise Act from the orders of the Tribunal at Mumbai, can be presented and heard before the principal seat of the High Court, even when the impugned order of the Tribunal arises out of places which are allotted to the Benches at Nagpur and Goa?

The High Court observed that there is no issue/dispute with regard to the jurisdiction of the Court to entertain these appeals and decide the grievances of the Appellants to the orders of the Tribunal. And that the only issue was procedural i.e. the place where such appeals are to be filed and heard i.e. at the principal seat at Mumbai or at the benches.

The High Court clarified that the Benches were no less part of the Court and enjoyed the same authority as the Principal seat of the court.

The Respondents objected to the hearing of these appeals by the High Court at Mumbai and prayed for its transfer to the Nagpur and Goa benches of the Bombay High Court.

The grounds are that that the orders in original in all these cases were passed within the districts which have been allotted to the respective benches at Nagpur and Goa of the Bombay High Court in terms of the Bombay High Court Appellate Side Rules, 1960 (Appellate Side Rules).

It is further urged that in these appeals the forum conveniens are the respective benches at Nagpur and Goa as not only the dispute/cause of action arise within the area allocated to the respective benches at Nagpur and Goa as assigned by the Appellate Side Rules but even the Officers of the respondents are stationed there to instruct its advocates.

Relying on Rule 1, 2 and 3 of the Appellate Side Rules Chapter XXXI and the amendment made to the Appellate Side Rules on 27th October, 2014 by insertion of Chapter XXIVA (Tax Appeals), it is submitted by the Respondent-Revenue that it was clear that where a dispute arose within the specified districts relating to particular benches, then, the appeals arising from such districts would have to be filed at the respective benches as allocated/assigned to Principal seat and the Benches.

It is, therefore, submitted that in the present facts, the appeals be returned to be presented before the Benches at Nagpur and Goa to which the districts are allotted in terms of the Appellate Side Rules.

The assessee-appellant submitted that the preliminary issue is concluded in favour of the Appellants by the decision in the case of Vinar Ispat Ltd. 2011-TIOL-572-HC-MUM-CX where an identical objection by the Revenue was rejected.

The High Court observed that the decisions cited by the Appellant were all rendered prior to the insertion of Chapter XXIV-A on 27th October, 2014 and thus had no occasion to consider and deal with it . Inasmuch as the aforesaid amendment clearly restricted the filing of tax appeals before the appellate side of the Principal Bench of this Court to only such appeals from orders of the Tribunal which arise out of the specified districts therein. And, therefore, it was no longer the situs of the Tribunal which decided which of the benches or the principal seat of this Court to which an appeal lies but the place where the dispute arose, the High Court added.

It was further observed -

"…It must, therefore, follow, that appeals arising out of districts other than those mentioned in Chapter XXIV-A of the Appellate Side Rules, would in term of Chapter XXXI of the Appellate Side Rules relate to the dispute arising from districts which require these tax appeals to be presented before the benches at Nagpur, Aurangabad and Goa dependant upon the district from where the dispute arose. Thus, in our view, these appeals as filed in view of Chapter XXIV-A read with Chapter XXXI of the Appellate Side Rules have to be transferred to the benches at Nagpur and Goa dependent entirely upon the place where the dispute arose/originated."

Objection was raised to the above by the appellant by inter alia citing the apex court decision in Sri. Nasiruddin ((1975) 2 SCC 671 ), Manju Varma - 2004-TIOL-127-SC-MISC .

The High Court distinguished the cases cited by noting that the said decisions were concerned with a filing of a writ petition under Article 226 of the Constitution of India and not with the filing of a statutory tax appeal as in the present case.

It was also observed –

"…Secondly the amendment by insertion of Chapter XXIV-A of the Appellate Side Rules with effect from 27th October 2014 specifically provides for the manner to determine before which benches of this court would appeals under Section 130 of the Customs Act and 35G of the Central Excise Act lie. Thus the filing of these appeals i.e. tax appeals would be governed by the newly inserted Chapter XXIV-A read with Chapter XXXI of the Appellate Side Rules. This newly inserted Chapter XXIV-A of the Appellate Side Rule provides the test for the bench before which the statutory appeal would lie as not the situs of the Tribunal but the place where the dispute arose i.e. originated from…"

The High Court also remarked that it is a settled position in law that the practice of the Court is the law of the Court. [Standard Motors Products - 2002-TIOL-258-SC-MISC-LB refers]

In fine, the preliminary question was answered in the negative that is in favour of the respondent Revenue and against the appellants.

The Registry was directed to send the five appeals to the respective benches of the Bombay High Court at Goa and Nagpur.

(See 2018-TIOL-2208-HC-MUM-CUS)