2019 (12) TMI 1378 - AT - Customs

Disagreement over Customs Act interpretation sparks Third Member reference in High Court appeal

The appeal filed by the Commissioner of Customs (Import) against an order passed by the Commissioner of Customs (Appeals) resulted in a difference of ... Validity of reference order dated 22 January, 2019 - it was alleged that specific ‘point or points’ on which the Members differed were required to be recorded while making the reference to a Third Member, in view of the specific provisions contained in Section 129C of the Customs Act, 1962 - miscellaneous application has been submitted before the President with a prayer that the Bench referring the matter should have specifically stated the ‘point or points’ on which they differed to a Third Member or in the alternative the matter may be directed to be heard by another Bench. HELD THAT:- In paragraph 10 of the judgment, it has been noted that the Counsel for the petitioner was orally directed by the Bench to approach the President of the Tribunal to ensure that the provisions of Section 129C of the Act were complied with by the Division Bench of the Tribunal. The President observed that Section 129C(5) mandatorily requires, if the Members were equally divided, to frame the point or points on which they differed, but felt handicapped in making any order. The Division Bench, thereafter, observed that the Members who expressed dissenting opinion, were bound by the statute to state the ‘point or points’ of difference and make reference after making such statement and the entire appeal cannot be referred to a Third Member. In view of the observations made by the Division Bench of the Bombay High Court, as noted in the application filed appeal, M/s. Sun Tex India, and the provisions of Section 129C(5) of the Customs Act as also the four decisions of High Court, it is considered necessary to refer the matter to the Hon’ble Members constituting the Division Bench to specifically formulate the point or points of difference of opinion while placing the matter before the President for nominating a third Member to decide the point or points of difference of opinion. Application disposed off. Issues involved:1. Appeal against order passed by Commissioner of Customs (Appeals)2. Difference of opinion between Members of the Tribunal3. Challenge to reference order in Bombay High Court4. Interpretation of Section 129C of the Customs Act, 1962Comprehensive analysis:1. The appeal was filed by the Commissioner of Customs (Import) against an order passed by the Commissioner of Customs (Appeals). The Tribunal had two Members, one (Judicial) who dismissed the appeal and the other (Technical) who allowed it. The matter was referred to the President to determine whether the appeal should be dismissed or allowed based on the points of difference between the Members.2. M/s. Sun Tex filed a Writ Petition in the Bombay High Court challenging the reference order, arguing that specific points of difference should have been recorded as per Section 129C of the Customs Act, 1962. The High Court opined that the settled law should have been argued before the Third Member instead of approaching the court directly, as it could interfere with the internal workings of the Tribunal.3. The Writ Petition highlighted the necessity of framing specific points of difference between the Members for reference to the Third Member, as observed in various judgments like Jagat Alloys Pvt. Ltd. and Colourtex. The High Court emphasized the importance of adhering to the provisions of the Customs Act and the need for certainty and finality in litigation.4. The Division Bench was required to state the specific points of difference as per Section 129C(5) of the Customs Act. The observations made by the Bombay High Court and the interpretations of various judgments led to the conclusion that the matter should be referred back to the Division Bench to formulate the points of difference for nomination of a Third Member. The application was disposed of with these directions.