Tribunal cannot dismiss an appeal for want of prosecution due to the non-appearance of the appellant

The Hon'ble CESTAT, Principal Bench, New Delhi, in Shri Hargun Das Nebhani M/s. Rajasthan Watch Manufacturers, Shri Mirchoomal Chandani M/s. Rajasthan Watch Manufacturers, Shri Om Prakash Pareek M/s. Rajasthan Watch Manufacturers, Shri Ishwar Das Moolrajani M/s. Rajasthan Watch Manufacturers, Shri NareshMoolrajani M/s. Rajasthan Watch Manufacturers, Shri Nanak Das Moolrajani M/s. Rajasthan Watch Manufacturers Versus Commissioner of Customs, Jaipur - 2026 (6) TMI 1243 - CESTAT NEW DELHI held that personal penalties imposed on individuals cannot be sustained when the primary order confirming duty demands and confiscations against the importing firm has been remanded and does not legally exist as on date.

Facts:

• M/s Rajasthan Watch Manufacturers ('the appellant') imported watches through three ports, the declared values of which were proposed to be rejected via a Show Cause Notice ('SCN') dated 19.06.2007 issued by the Additional Director General, Directorate of Revenue Intelligence ('DRI'), Delhi.
• The Commissioner of Customs, Jaipur ('the respondent') vide Order-in-Original dated 31.12.2010 ('impugned order'), re-determined the values, confirmed a differential duty demand of Rs. 2,44,58,162 under Section 28(1) of the Customs Act, 1962, ('the Act') confiscated the imported watches, and imposed redemption fines and penalties on the firm.
• Consequent to these findings, the respondent also imposed personal penalties ranging from Rs. 7,00,000/- to Rs. 90,00,000/- on six individuals ('the appellants') under Section 112(a) and/or (b) of the Act. Aggrieved by the same, the appellants filed individual appeals under Section 129A of the Act, choosing to adopt the grounds taken by the appellants rather than filing independent grounds.
• In 2017, the Tribunal via a common Final Order remanded all the related appeals, including the primary appeal of the importing firm (Appeal No. C/201/2011), back to the Commissioner with instructions to decide the matter after the Supreme Court ruled on the competence of DRI officers to issue SCNs (Mangli Impex case).

Issues:

• Whether personal penalties imposed on individuals can be legally sustained when the primary order confirming duty demand and confiscation against the main importing entity has been remanded back?
• Whether the Tribunal can dismiss an appeal for default or want of prosecution due to the non-appearance of the appellant or their proxy counsel?

Held:

The Hon'ble CESTAT, Principal Bench, New Delhi, in [Shri Hargun Das Nebhani M/s. Rajasthan Watch Manufacturers, Shri Mirchoomal Chandani M/s. Rajasthan Watch Manufacturers, Shri Om Prakash Pareek M/s. Rajasthan Watch Manufacturers, Shri Ishwar Das Moolrajani M/s. Rajasthan Watch Manufacturers, Shri NareshMoolrajani M/s. Rajasthan Watch Manufacturers, Shri Nanak Das Moolrajani M/s. Rajasthan Watch Manufacturers Versus Commissioner of Customs, Jaipur - 2026 (6) TMI 1243 - CESTAT NEW DELHI], held as under:

• Relied on the Supreme Court judgment in Balaji Steel Re-Rolling Mills Versus Commissioner of Central Excise and Customs - 2014 (11) TMI 531 - Supreme Court to observe that the Tribunal cannot short-circuit or dismiss an appeal for default or want of prosecution, and is strictly bound to dispose of an appeal on its merits of fact and law even if the appellant or their counsel is absent.
• Observed that the primary appeal filed by the importing firm (C/201/2011) stands remanded to the Commissioner since the Revenue failed to challenge that portion of the Tribunal's 2017 order before the High Court. As a result, the original Order-in-Original qua the importing firm does not exist today.
• Noted that although the Supreme Court subsequently settled the DRI competence issue in favour of the Revenue in the COMMISSIONER OF CUSTOMS Versus M/s CANON INDIA PVT. LTD. - 2024 (11) TMI 391 - Supreme Court (LB) review petition, no fresh confirmation of duty demand or confiscation has been finalised against the importing firm by the adjudicating authority till date.
• Emphasised that all the personal penalties imposed on the six individual appellants are entirely consequential upon and linked to the confirmation of demand and confiscation of goods against the main importing firm. In the absolute absence of an active underlying demand against the firm, the penalties on the individuals cannot be sustained.

Hence, the tribunal allowed all six appeals and set aside the penalties.

Relevant Sections & Regulations:

Section 111 of the Act: Confiscation of improperly imported goods, etc.-The following goods brought from a place outside India shall be liable to confiscation:

Section 112 of the Act: Penalty for improper importation of goods, etc.-Any person,-

(a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or

(b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable