2013 (11) TMI 263 - HC - Customs

Court affirms jurisdiction in Customs Commissioner's appeal, dismisses review application. President's transfer lacked authority.

The Court held that it had jurisdiction to entertain the appeal filed by the Commissioner of Customs challenging the order passed by the South Zonal Bench ... Power of Appellate Tribunal to regulate its procedure including places of sittings - administrative transfer of pending appeals between Benches in different States - Appellate Tribunal as a Civil Court and limits of administrative jurisdiction - territorial jurisdiction of High Court in appeals against orders of CESTAT following transfer - effect of transfer on jurisdiction of transferee Bench and forum for challengeAdministrative transfer of pending appeals between Benches in different States - Appellate Tribunal as a Civil Court and limits of administrative jurisdiction - power of Appellate Tribunal to regulate its procedure including places of sittings - Whether the President of the Appellate Tribunal had jurisdiction to transfer the appeal from the permanent Bench at Mumbai to the Chennai Bench by an administrative order. - HELD THAT: - Section 129C(6) confers a residuary power on the Appellate Tribunal to regulate its procedure, including the places at which Benches shall hold sittings, but that power does not expressly authorise unilateral administrative transfers of a pending matter from a Bench in one State to a Bench in another State without judicial exercise of jurisdiction. The Tribunal is deemed to be a Civil Court for the purpose of discharging its functions and the procedural powers under Section 129C(7) and (8) are directed to judicial adjudication. Transfer of proceedings between permanent Benches located in different States interferes with territorial judicial administration, may take the opposite party by surprise and encourages forum shopping; such transfers cannot be made casually on administrative correspondence from a litigant to the President or by avoiding statutory application/fee formalities. On these grounds the order of transfer effected by the President as an administrative act was without jurisdiction. [Paras 22, 23, 24, 25, 26]The President of the Appellate Tribunal had no jurisdiction to transfer the matter from the permanent Bench at Mumbai to the Chennai Bench by way of an administrative order; such inter-State transfers require judicial exercise of jurisdiction.Territorial jurisdiction of High Court in appeals against orders of CESTAT following transfer - effect of transfer on jurisdiction of transferee Bench and forum for challenge - Whether this High Court (Madras) had jurisdiction to entertain the appeal filed by the Commissioner of Customs against the order passed by the South Zonal (Chennai) Bench of CESTAT in a matter originated at Mumbai after the transfer. - HELD THAT: - The situs doctrine (where the seat of the Tribunal alone gives jurisdiction to a High Court) as explained in Ambica Industries does not apply where a matter has been transferred and the transferee Bench has been clothed with jurisdiction by virtue of that transfer. Once the appeal was transferred and the transferee Bench at Chennai decided the matter, the order of the transferee Bench is to be challenged before the High Court that is jurisdictionally competent in relation to the transferee Bench. The transfer, though found to be administratively improper, was acted upon and culminated in a decision by the Chennai Bench; consequently this Court (Madras) is the appropriate forum to entertain the challenge to the Chennai Bench's order and Madras High Court has jurisdiction to entertain the appeal filed by the Commissioner of Customs against the Chennai Bench decision. [Paras 34, 35, 36, 38, 41]This Court has jurisdiction to entertain the appeal against the order passed by the South Zonal Bench (Chennai) of CESTAT and the jurisdictional issue is answered against the petitioner.Final Conclusion: The review petition is dismissed. The President of CESTAT had no jurisdiction to transfer the Mumbai Bench matter to Chennai by an administrative order; notwithstanding that finding, the order of the Chennai Bench stands challengeable before this High Court and Madras High Court has jurisdiction to entertain the appeal filed by the Commissioner of Customs. Issues Involved:1. Jurisdiction to entertain the appeal.2. Validity of the transfer order by the President of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT).Issue-Wise Detailed Analysis:1. Jurisdiction to Entertain the Appeal:The petitioner argued that the appeal should have been filed before the Mumbai High Court as the adjudicating authority, the Commissioner of Customs (Export Promotion), was situated in Mumbai. The petitioner contended that the jurisdictional issue is a legal matter that goes to the root of the case, and if the court lacks jurisdiction, any order passed would be a nullity. The petitioner sought a review of the judgment on the grounds of jurisdiction, arguing that the appeal against the final order passed by CESTAT, Chennai should lie before the Mumbai High Court under Section 130 of the Customs Act, 1962.The respondent countered that this Court has jurisdiction to entertain the appeal filed against the order passed by CESTAT, Chennai. The respondent argued that the Chennai Bench was given jurisdiction due to the transfer order by the President of the Tribunal, making this Court the jurisdictional High Court competent to consider the challenge to the order.The Court noted that the scope of review jurisdiction is limited but entertained the review petition due to the substantial question regarding jurisdiction. The Court referred to the judgment in Ambica Industries v. Commissioner of Central Excise, which held that the jurisdictional High Court alone has the authority to entertain appeals against CESTAT orders, notwithstanding the Tribunal's seat. However, the Court distinguished this case from Ambica Industries, noting that the transfer in this case was due to an administrative order by the President of the Tribunal, not the Tribunal's seat.The Court concluded that the legality and correctness of the order passed by CESTAT, Chennai cannot be tested with reference to the law laid down by the Bombay High Court. The jurisdiction on account of transfer must be distinguished from jurisdiction based on the Tribunal's situs. The order passed by the transferee Bench must be challenged before the jurisdictional High Court, which in this case is this Court. Therefore, the Court held that it has jurisdiction to entertain the appeal filed by the Commissioner of Customs challenging the order passed by the South Zonal Bench of CESTAT at Chennai.2. Validity of the Transfer Order by the President of CESTAT:The petitioner requested the transfer of their appeal from the Mumbai Bench to the Chennai Bench of CESTAT, citing difficulties in attending hearings in Mumbai. The President of CESTAT transferred the case from Mumbai to Chennai through an administrative order without notice to the Customs Department. The petitioner argued that the President has the jurisdiction under Section 129C(6) of the Customs Act to pass such administrative orders for transferring pending matters.The Court examined whether the President of CESTAT had the power to transfer a case from one Bench in one state to another Bench in a different state under Section 129C(6) of the Customs Act. Section 129C(6) allows the Appellate Tribunal to regulate its own procedure, including the places where the Benches shall hold their sittings. However, the Court found that this provision does not expressly confer power on the Appellate Tribunal to transfer matters on the administrative side. The Tribunal, being deemed a Civil Court, must transfer proceedings through judicial orders, not administrative ones.The Court observed that the transfer order was made unilaterally without the knowledge of the other party, which could lead to forum shopping and surprise the opposite party. The Court also noted that the petitioner circumvented the statutory requirement of paying a fee for transfer applications by sending a direct request to the President. The Court concluded that the President of CESTAT had no jurisdiction to transfer the matter from the Mumbai Bench to the Chennai Bench through an administrative order.Disposition:The Court dismissed the review application, holding that it has jurisdiction to entertain the appeal filed by the Commissioner of Customs against the order passed by the South Zonal Bench of CESTAT at Chennai. The review application was dismissed with no costs.