2014 (12) TMI 269 - HC - Customs

Appealability of Customs Act Orders to High Court for Substantial Questions of Law

NICCO CORPORATION LTD. Versus COMMISSIONER OF SERVICE TAX

The court held that orders under Section 129E of the Customs Act are appealable to the High Court if they involve substantial questions of law. It was ... Power of tribunal to dismiss the appeal for non compliance of order of pre-deposit - Maintainability of appeal before the HC for purposes of assessment allowing or refusing the dispensation of deposit under Section 129E - appeal against the stay order of tribunal - Question having a relation to the rate of duty of customs or to the value of goods - Held that:- It is further held where the alternative remedy by way of an appeal is uncertain and dependent upon certain conditions, the writ jurisdiction can be invoked even in absence of involvement of substantial question of law - power under Article 226 can be exercised even there being an alternative remedy but to be considered as a rule of self-imposed limitation. It is essentially a rule of policy, convenience, a discretion and not a rule of law. Therefore, the writ petition cannot be said to be non-maintainable merely because an alternative remedy is provided under the statute if the case comes within the exceptions as laid down in the above noted reports. The writ jurisdiction can certainly be invoked even if there is an existence of an alternative remedy by way of an appeal if on the face of it, the order appears to have been passed de hors the statute. The power of an appeal before the Appellate Tribunal could be traced from Section 129A of the Customs Act, 1962 which does not contain any provision either to be proceeded by a deposit of the duty and the penalty imposed by the adjudicating authority as a condition precedent or in default of such deposit, the appeal would be liable to be dismissed. In absence of the specific provisions, the authorities cannot innovate the mechanism for dismissal thereof at any stage of the said appeal. The appellate tribunal could very well proceed to decide the appeal and simultaneously therewith, the adjudicating authority can take recourse to the provision of the statute for recovery thereof. The statutory authorities are bound to act within the precincts of the statute and cannot travel beyond it. Power of tribunal to dismiss the appeal for non-deposit of pre-deposit amount as ordered - Held that:- By imposing the condition that if the deposit is not made, the appeal would attract dismissal, such course is neither contemplated under the Customs Act not could confer power upon the statutory authority whose genesis whereof flows therefrom. - the order dated 21-2-2013 by which the appeal is dismissed by the Appellate Tribunal is illegal and beyond the powers conferred under the Customs Act. - appeal restored before the tribunal - decided in favor of assessee. Issues Involved:1. Whether an appeal lies to the High Court from every order passed by the Appellate Tribunal after July 1, 2003, under Section 129E of the Customs Act.2. Whether a writ petition is maintainable if the order passed by the Appellate Tribunal does not involve a substantial question of law.Issue-Wise Analysis:1. Appeal to High Court from Appellate Tribunal Orders:The judgment addresses whether an appeal lies to the High Court from every order passed by the Appellate Tribunal after July 1, 2003, under Section 129E of the Customs Act. The court analyzed Chapter XV of the Customs Act, which includes Sections 128 to 131A, detailing the appeal process. Section 130 provides for an appeal to the High Court if the case involves a substantial question of law, excluding orders related to the rate of duty or value of goods, which are directly appealable to the Supreme Court under Section 130E(b). The court highlighted that orders under Section 129E, which involve the dispensation of deposit, are appealable to the High Court if they involve a substantial question of law. This interpretation is supported by judgments in Ambika Nahar Exports and Polar Industry Ltd., which affirm the maintainability of such appeals provided they involve substantial questions of law.2. Maintainability of Writ Petition:The judgment further examines whether a writ petition is maintainable if the order by the Appellate Tribunal does not involve a substantial question of law. The court emphasized that the High Court's power under Article 226 of the Constitution is plenary and not restricted by the existence of an alternative remedy. This power is exercised to correct orders passed without jurisdiction, in violation of natural justice, or involving substantial questions of law. The court referenced several judgments, including L. Chandra Kumar v. Union of India and Whirlpool Corporation v. Registrar of Trade Marks, which underscore that the High Court can exercise its writ jurisdiction despite the availability of alternative remedies if the case involves fundamental rights, natural justice, or jurisdictional issues.Case-Specific Analysis:In W.P. 25803 (w) of 2013, the petitioner challenged the dismissal of their appeal by the Appellate Tribunal for non-deposit of 10% of the penalty imposed. The court found that the Tribunal's order dismissing the appeal for non-deposit was beyond its powers under the Customs Act, as there is no provision mandating dismissal for non-deposit. The court set aside the dismissal order but upheld the Tribunal's discretionary order regarding the deposit requirement, allowing the petitioner to seek an extension for the deposit.Similarly, in W.P. 15430 (w) of 2013, the court addressed the dismissal of an appeal for non-deposit of duty and penalty under the Central Excise Act, which is in pari materia with the Customs Act. The court reiterated that the Tribunal's dismissal for non-deposit was not supported by statutory provisions and set aside the dismissal order, allowing the petitioner to approach the Tribunal for an extension of time for the deposit.Conclusion:The court concluded that orders under Section 129E of the Customs Act are appealable to the High Court if they involve substantial questions of law. Additionally, the High Court can exercise its writ jurisdiction under Article 226 even if an alternative remedy exists, particularly in cases involving jurisdictional issues, violation of natural justice, or substantial questions of law. The specific orders dismissing appeals for non-deposit were set aside, affirming the discretionary powers of the Tribunal while allowing petitioners to seek extensions for deposits.