2019 (5) TMI 1108 - HC - Customs

High Court grants appeal, sets aside CESTAT orders for fresh consideration

The High Court allowed the exemption application subject to all just exceptions. The delay in filing the appeal was condoned based on reasons provided. ... Extending the order of Settlement Commission to the co-notice - Concessional rate of customs duty - Import of Crude Palm Oil - diversion of import conditions - imposition of penalty - Was the CESTAT justified in declining to extend the benefit of the order passed by the Settlement Commission to the present Appellant? - HELD THAT:- The Court is of the view that the mere fact that the Settlement Commission permitted the Department to proceed against the co-noticees in accordance with law did not mean that the co-noticees could not rely on the said order to argue, on the basis of the judgment of this Court in M/s Lesag HBB (I) Ltd. and Others vs. CCE, [2016 (11) TMI 681 - DELHI HIGH COURT] and that of the Supreme Court in Union of India vs Omkar S Kanwar [2002 (9) TMI 101 - SUPREME COURT] that the proceedings against them ought to have been dropped under the KVS Scheme. The Court finds that the CESTAT has not discussed the import of the two judgments in the impugned orders. Was the CESTAT obliged to deal with the appeal on merits notwithstanding the preliminary objection raised by the Department on issue (i) above? - HELD THAT:- Once the CESTAT accepted the plea of the Department that the benefit of the order of the Settlement Commission should not be extended to the Appellant, the logical sequitur was that the appeal had to then be considered on merits. The Court fails to understand how the CESTAT could observe that nothing further remained to be decided in the appeals in view of the order of the Settlement Commission. Appeal restored to the file of the CESTAT for being considered afresh uninfluenced by the earlier orders dated 5th June, 2018 and 21st February, 2019 - appeal disposed off. Issues:1. Exemption application2. Delay in filing appeal3. Stay application4. Challenge to CESTAT orders5. Settlement Commission's order6. Imposition of penalty7. Appeal before CESTAT8. Recall application before CESTAT9. Benefit of Settlement Commission's order10. Consideration of appeal on meritsExemption Application:The High Court allowed the exemption application subject to all just exceptions.Delay in Filing Appeal:The delay of 82 days in filing the appeal and 26 days in re-filing the appeal was condoned by the High Court based on the reasons stated in the applications.Stay Application:The appeal was admitted by the High Court with the consent of counsel for the parties and taken up for final hearing.Challenge to CESTAT Orders:The appeal was against the final order of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) dismissing the appeal Customs Appeal Nos. C/361-363/2010 (SM) and the subsequent order seeking recall of the earlier decision.Settlement Commission's Order:The Settlement Commission passed a final order settling customs duty, interest, and penalty amounts for M/s Pioneer Soap & Chemicals and co-noticees, giving Revenue liberty to take action against other co-noticees, including the present Appellant.Imposition of Penalty:The Commissioner of Central Excise imposed a penalty of Rs. 20 lakhs on the present Appellant in an order dated 30th April, 2010, after negating the contentions based on the Settlement Commission's order.Appeal Before CESTAT:The appeal filed by the present Appellant was dismissed by CESTAT on the grounds that the benefit of the Settlement Commission's order could not be extended to the co-noticees, including the Appellant.Recall Application Before CESTAT:The Appellants, including the present one, filed applications for the recall of the CESTAT's order, arguing that the appeals should be considered on merits and relying on relevant legal precedents.Benefit of Settlement Commission's Order:The High Court found that the CESTAT failed to discuss the import of relevant judgments in its orders and should have considered the benefit of the Settlement Commission's order for the present Appellant.Consideration of Appeal on Merits:The High Court held that the CESTAT should have considered the appeal on merits after rejecting the plea regarding the Settlement Commission's order, and both issues required reconsideration by the CESTAT. The impugned orders were set aside, and the appeal was restored for fresh consideration.This detailed analysis of the judgment covers all the issues involved comprehensively, providing a clear understanding of the legal proceedings and decisions made by the High Court.