2018 (8) TMI 1997 - HC - Customs

Tribunal Confirms Provisional Release Orders Are Quasi-Judicial, Appeal Process Valid Under Customs Act.

COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX Versus GAURAV PHARMA LTD.

The Tribunal dismissed the appeal, affirming that orders for provisional release under Section 110A of the Customs Act are quasi-judicial and appealable ... Provisional Release of goods - Section 110A of the Customs Act, 1962 - Whether an appeal lies before CESTAT against the order passed by the Commissioner (Customs) under Section 110A of the Customs Act, 1962 for provisional release of the goods or not? - HELD THAT:- Two Member Bench of the Tribunal having doubt on the opinion expressed by an earlier decision of Larger Bench in Akanksha Syntax Private Limited’s case [2013 (9) TMI 138 - CESTAT MUMBAI], vide order dated 25-5-2015 referred the matter to the President of the Tribunal for consideration and constitution of a Larger Bench for decision of the issue - A perusal of the decision of the two Member Bench of the Tribunal shows that first contention raised by Learned Counsel for the appellant is totally misconceived as the matter was not referred to be heard by a Bench consisting of five members by the two members as it was merely referred to the President of the Tribunal for constitution of a Larger Bench. Thereafter, it was an administrative action by the President of the Tribunal considering the circumstances of the case as to how much members should constitute the Larger Bench. It cannot be disputed that the powers vested with the adjudicating authority to be exercised for considering the prayer for provisional release of goods is circumscribed with well-settled principles of law governing the same. Such an order is not based on any policy, rather on settled principles of law. These orders cannot be issued mechanically, rather many factors are required to be considered such as the nature of goods, seriousness of offence, whether the goods being imported are prohibited, etc. etc. Any such order passed has civil consequences, hence, it cannot be opined that the same is passed by the adjudicating authority in exercise of its administrative powers rather it has rightly been opined by the Tribunal that the exercise of powers by the Commissioner under Section 110A of the Act is quasi judicial in nature and so the order passed. The language of Section 110A(l)(a) of the Customs Act is quite wide in its application to take within its umbrella such an order passed, against which appeal would lie to the Tribunal. Restrictive meaning as is suggested by the Revenue cannot be given to the provisions. Power of judicial review in exercise of extraordinary jurisdiction under Article 32 and 226 of the Constitution of India is altogether different and cannot be compared with a statutory right of appeal where the scope of interference is larger. The terms used in Section 129(l)(a) of the Customs Act are ‘decision’ or ‘orders’. Meaning thereby it is not limited to any final decision. Appeal dismissed. Issues Involved:1. Whether an appeal lies before CESTAT against the order passed by the Commissioner (Customs) under Section 110A of the Customs Act, 1962 for provisional release of goods or not.2. Whether the reference of CESTAT’s Larger Bench of 5 Members is legally maintainable.3. Whether the Akanksha Larger Bench decision of the CESTAT dated 9-10-2012 requires interference.4. Whether an appeal against a decision or order passed by the Commissioner of Customs for provisional release of seized goods under Section 110A of the Customs Act, 1962 lies before the CESTAT under Section 129(1)(a) of the Customs Act, 1962.Detailed Analysis:1. Appeal Before CESTAT Against Section 110A Orders:The Tribunal considered whether an appeal against an order for provisional release of goods under Section 110A of the Customs Act, 1962, is maintainable before CESTAT. The Tribunal noted that Section 110A allows for provisional release of seized goods pending adjudication by the adjudicating authority. The Tribunal concluded that such orders have legal consequences for the owner of the goods and thus can be appealed under Section 129A of the Customs Act, which permits appeals against decisions made by the Principal Commissioner or Commissioner of Customs as an adjudicating authority. The Tribunal emphasized that the nature of the order, whether administrative or quasi-judicial, does not preclude the right to appeal if it affects the rights of the parties involved.2. Legality of Reference to a Five-Member Bench:The Tribunal addressed the issue of whether the reference to a Larger Bench of five members was legally maintainable. It was argued that a two-member bench could only refer matters to a three-member bench. However, the Tribunal clarified that the referral was made to the President of the Tribunal, who then constituted a five-member bench based on the circumstances. The Tribunal referenced the Supreme Court's decision in Union of India and Another v. Paras Laminates (P) Limited, which affirmed the President's authority to constitute larger benches under Section 129C(5) of the Customs Act. The Tribunal found no merit in the contention that the referral to a five-member bench was improper.3. Akanksha Larger Bench Decision:The Tribunal considered whether the decision in Akanksha Syntax Private Limited v. CC (General), Mumbai, which held that appeals against orders under Section 110A were not maintainable, required interference. The Tribunal disagreed with the Akanksha decision, noting that the provisional release of goods involves adjudicatory functions that affect the rights of the parties, thus qualifying as quasi-judicial actions subject to appeal. The Tribunal emphasized that the exercise of discretionary powers by the adjudicating authority under Section 110A necessitates adherence to principles of natural justice, further supporting the maintainability of appeals.4. Quasi-Judicial Nature of Section 110A Orders:The Tribunal analyzed whether orders under Section 110A are quasi-judicial and thus appealable under Section 129(1)(a). The Tribunal concluded that the adjudicating authority's decisions under Section 110A, which involve assessing factors such as the nature of goods and the seriousness of the offense, are quasi-judicial. The Tribunal referenced several Supreme Court decisions, including Indian National Congress (I) v. Institute of Social Welfare, to support the view that statutory authorities acting judicially are quasi-judicial, even in the absence of a lis between two contending parties. The Tribunal also cited relevant High Court judgments that supported the appealability of such orders.Conclusion:The Tribunal dismissed the appeal, finding no substantial question of law. It affirmed that orders for provisional release under Section 110A are quasi-judicial and appealable under Section 129A, and that the President of the Tribunal had the authority to constitute a five-member bench for adjudication.