2014 (12) TMI 488 - HC - Customs

High Court Reverses Tribunal Decision, Orders Fresh Consideration

The Commissioner of Customs (Export) Versus Goan Hotels And Clubs Pvt. Ltd.

The High Court allowed the Revenue's appeal, setting aside the Tribunal's order and remanding the case for fresh consideration. The Court emphasized the ... Import of Processed Natural Limestone under EPCG scheme - Benefit under Notification No.103/2009-Cus - revenue alleged that the goods were restricted for import in terms of the Foreign Trade Policy in force. - Confiscation of goods u/s 111(d) - Penalty u/s 112(a) - Wrong classification of goods - Held that:- There is no application of mind on the part of the Tribunal. - A very vital and material contention is raised on behalf of the Respondent and which is tried to be supported by producing number of documents including the relevant Notification. If the Tribunal is last fact finding authority and was dealing with a statutory Appeal, we would expect it not to dispose of the same by a cryptic and short order, more particularly, when such vital contentions have been raised as would have a material bearing on the outcome of the Appeal. It would also have some bearing on the pending cases. Customs Tariff Heading No.68022900 under which the goods are classifiable, then, whether there is any restriction in terms of the applicable policies or not ought to have been examined. Whether, the Commissioner was right in making a reference to the Customs Tariff Heading 68022200 should have been then considered. If that was permissible, the Tribunal was obliged to not only make a reference to the relevant findings of the Commissioner to uphold them in their entirety or otherwise. If these findings were not tenable as urged on behalf of the Respondent/original Appellant, then, the Tribunal should have held accordingly. We do not find any discussion much less a conclusive finding on this aspect of the matter. Resultantly, we are constrained to quash and set aside the impugned order on this short ground alone. - Decided in favour of Revenue. Issues:1. Whether the order of the CESTAT granting benefit under Notification No.103/2009-Cus. despite FTP restriction is legally sustainableRs.2. Whether the CESTAT was correct in setting aside duty, confiscation, redemption fine, and penalty under specific sections of the Customs ActRs.Analysis:1. The High Court considered the issue of entitlement to benefit under Notification No.103/2009-Cus. despite Foreign Trade Policy (FTP) restrictions. The Respondent imported goods under the EPCG scheme, seeking classification under Customs Tariff Heading 68022900, but the Appellant argued they should be classified under ITC(HS) Sr.No.68029200. The goods were restricted for import under FTP if their unit value was less than US Dollars 50 per square meter CIF. The Commissioner of Customs held that the goods were restricted for import, leading to confiscation and penal action. The Tribunal allowed the Respondent's appeal, leading to the Revenue's appeal before the High Court.2. The High Court analyzed the correctness of the CESTAT's decision to set aside duty, confiscation, redemption fine, and penalty under specific sections of the Customs Act. The Commissioner had imposed these penalties based on the restricted import status of the goods under FTP. The Tribunal's decision was challenged by the Revenue on the grounds that it did not adequately address the findings of the Commissioner and failed to consider the implications of the restricted import status on the penalties imposed. The Respondent argued that the Tribunal correctly classified the goods under Customs Tariff Heading 68022900 and was entitled to benefits under Notification No.103/2009. The High Court found that the Tribunal's decision lacked proper consideration of crucial contentions and directed the Tribunal to reconsider the appeal in accordance with law.3. The High Court observed that the Tribunal's order lacked a detailed examination of the contentions raised, especially regarding the classification of goods and the implications of FTP restrictions. The Tribunal's failure to address these vital issues led to the quashing of its order. The High Court emphasized the importance of a thorough analysis in statutory appeals, particularly when significant contentions are raised that could impact the outcome. The Court directed the Tribunal to reexamine the appeal, considering all arguments presented by both sides and without being influenced by previous observations. Additionally, the Court waived the pre-deposit requirement for the Respondent in the pending appeal, ensuring an expedited resolution of the case in accordance with the law.4. In conclusion, the High Court allowed the Revenue's appeal, setting aside the Tribunal's order and remanding the case for fresh consideration. The Court highlighted the necessity for a comprehensive evaluation of all relevant issues in statutory appeals and emphasized the importance of addressing key contentions to ensure a just and lawful outcome.