2018 (9) TMI 1914 - HC - Customs

Court overturns license denial for Ammonium Nitrate import, emphasizes fair review process

M/s. Sri Amman Chemicals Versus The Joint Secretary to Government of India & Appellate Authority, The Chief Controller of Explosives Petroleum & Explosives Safety Organization, The Commissioner of Customs, The Additional Commissioner of Customs (SIIB)

The High Court set aside the first respondent's order denying the issuance of a P-5 license for importing Ammonium Nitrate due to lack of independent ... Grant of license - second respondent rejected the application on the reason that the petitioner being an ammonium nitrate trader, import licence cannot be issued to the petitioner under P-5 licence - HELD THAT:- There is no dispute to the fact that the petitioner has raised very many contentions on facts and law while challenging the order of the second respondent. It is also not in dispute that the petitioner was represented through an Advocate before the first respondent and made his submissions. Likewise, it is also seen that the Joint Chief Controller of Explosives made his submissions before the Appellate Authority. The Appellate Authority has, in fact, narrated the facts which has led to filing the appeal, extracted the rival contentions of the parties in detail, which runs to four pages. The first respondent has simply reiterated the order passed by the second respondent without giving any independent reason or finding as to how, in the view of the first respondent, the order of the second respondent is sustainable. Needless to say that the first respondent being the appellate authority is also a fact finding authority and thus, he is bound to consider the facts and circumstances and give his own independent reasonings and findings while disposing the appeal - As this Court does not find any such reasoning and finding, it is inclined to set aside the order of the first respondent without expressing any view on the merits of the matter, for reconsidering the appeal once again on merits and in accordance with law, after giving due opportunity of personal hearing to the petitioner. The matter is remitted back to the first respondent for considering the appeal filed by the petitioner once again on merits and pass orders in accordance with law, after giving due opportunity of personal hearing to the petitioner - Petition allowed by way of remand. Issues:1. Rejection of appeal against the order denying the issuance of a P-5 license for import of Ammonium Nitrate.2. Challenge of the order based on the grounds of national security.3. Analysis of the impugned order as a non-speaking one.4. Lack of independent reasoning and findings in the first respondent's order.5. Setting aside the impugned order and remitting the matter back for reconsideration.Issue 1: Rejection of appeal against the order denying the issuance of a P-5 license for import of Ammonium Nitrate:The petitioner, a trader and importer of ammonium nitrate, applied for a P-5 license post the introduction of Ammonium Nitrate Rules, 2012. The second respondent rejected the application citing that as an ammonium nitrate trader, the import license cannot be issued under a P-5 license. The petitioner challenged this decision through an appeal before the first respondent, which was subsequently rejected. The High Court noted the lack of independent reasoning in the first respondent's order and set it aside for reconsideration on merits.Issue 2: Challenge of the order based on the grounds of national security:The order denying the P-5 license for import of Ammonium Nitrate was based on national security concerns, as per the Ammonium Nitrate Rules, 2012. The first respondent upheld this decision without providing independent reasoning, leading to the High Court's intervention to ensure a proper consideration of the appeal based on merits and in accordance with the law.Issue 3: Analysis of the impugned order as a non-speaking one:The High Court observed that the impugned order of the first respondent was a non-speaking one, lacking detailed reasoning and findings to support the decision to reject the appeal. Despite detailed submissions by both parties and the Joint Chief Controller of Explosives, the order failed to provide a comprehensive analysis of the case, prompting the Court to set it aside for a fresh consideration.Issue 4: Lack of independent reasoning and findings in the first respondent's order:The High Court highlighted the deficiency in the first respondent's order, emphasizing that apart from a brief paragraph addressing the grounds for denial of the license, no independent reasoning or findings were provided to justify the decision. The Court stressed the importance of the appellate authority to conduct a thorough review and provide clear justifications for their conclusions.Issue 5: Setting aside the impugned order and remitting the matter back for reconsideration:In light of the above issues, the High Court allowed the writ petition, set aside the first respondent's order, and remitted the matter back for a fresh consideration. The Court directed the first respondent to review the appeal on merits, provide due opportunity for a personal hearing to the petitioner, and pass orders in accordance with the law within a specified timeframe.This detailed analysis of the judgment from the Madras High Court addresses the key issues involved in the case, highlighting the legal intricacies and the Court's decision to ensure a fair and reasoned consideration of the appeal.