2019 (12) TMI 1073 - HC - Customs

High Court clarifies appeal rights under Customs Act over Regulations

Commissioner Of Customs Bengaluru Versus Koushik Cargo Pvt. Ltd.

The High Court held that the order passed by the Commissioner under the Customs House Agents Licensing Regulations (CHALR), 2004 was appealable by the ... Suspension of CHA License - Right to appeal - right of Department to file an appeal against the order passed by the Commissioner under the provisions of the Customs House Agents Licensing Regulations, 2004 - Regulation 22(8) of the CHALR, 2004 - Section 129A and 129D of the Customs Act, 1962 - HELD THAT:- As could be seen Section-129A of the Customs Act, provides for a substantial right of appeal. The right of appeal cannot be taken away or curtailed, since the Regulations have been framed under the Act. The Regulations cannot stipulate conditions or procedures contrary to those stated in the Act. The Regulations are intended only to instruct on the applicability of the Act. It cannot grant or reduce what has been granted or otherwise by the Act. Even otherwise, the Regulations for the Customs Act, does not speak about the applicability or otherwise of Section-129A of the Customs Act. Therefore, the provisions contained under Section-129A of the Customs Act must prevail over the Regulations. Even otherwise, the Regulations do not prohibit the Revenue from challenging the order. When this court has already taken a view that the order passed under Regulation 23 of the Regulations of 2013 is an appealable order under Section 129A of the Act read with Regulation 21 of the Regulations of 2013, the Appellate Authority, without considering the law laid down by this court in the aforesaid judgments, has committed an error in rejecting the appeal on the ground that no appeal can be filed by the Revenue against the order passed by the Commissioner of Customs. The findings of the Appellate Authority is contrary to the law. The appeal filed by the Revenue is maintainable under Section 129A of the Act read with Regulation 21 of the Regulations of 2013. Accordingly, the substantial questions of law are answered in favour of the Revenue. Issues Involved:1. Appealability of the order passed by the Commissioner under the Customs House Agents Licensing Regulations (CHALR), 2004.2. Whether Regulation 22(8) of CHALR, 2004 restricts the right of appeal by the Department, overriding sections 129A and 129D of the Customs Act, 1962.3. Whether the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) should have heard and decided the appeal on merits.Issue-wise Detailed Analysis:1. Appealability of the Order Passed by the Commissioner under CHALR, 2004:The primary issue was whether the order passed by the Commissioner under CHALR, 2004 could be appealed by the Revenue. The CESTAT had rejected the appeal on the ground that no appeal could be filed against such an order. The High Court examined Section 129A of the Customs Act, which provides a substantial right of appeal. The Court held that the right of appeal cannot be taken away or curtailed by the Regulations, as they are framed under the Act and cannot override the Act itself. The Court cited previous judgments (M/S. CAPRICORN LOGISTICS PVT. LTD. and M/S. CARGOMAR) that established orders under Regulation 23 of the 2013 Regulations as appealable under Section 129A of the Act, read with Regulation 21. Therefore, the Court concluded that the appeal filed by the Revenue was maintainable.2. Regulation 22(8) of CHALR, 2004 and its Interaction with Sections 129A and 129D of the Customs Act, 1962:The second issue was whether Regulation 22(8) of CHALR, 2004 restricted the Department's right to appeal, overriding sections 129A and 129D of the Customs Act. The Court reiterated that the Regulations cannot stipulate conditions or procedures contrary to those stated in the Act. Since the Act provides a right of appeal under Section 129A, this right cannot be curtailed by the Regulations. The Court emphasized that the provisions of the Act must prevail over the Regulations. Therefore, Regulation 22(8) does not restrict the Department's right to appeal.3. CESTAT's Obligation to Hear and Decide the Appeal on Merits:The third issue was whether the CESTAT should have heard and decided the appeal on merits. The High Court noted that the CESTAT had erred in rejecting the appeal without considering the law laid down in previous judgments that orders under Regulation 23 are appealable. The Court held that the CESTAT should have considered the appeal on merits in accordance with the law. Consequently, the High Court set aside the CESTAT's order and directed it to hear and decide the matter on merits.Conclusion:In conclusion, the High Court allowed the appeal filed by the Revenue, set aside the CESTAT's order, and restored the appeal on the file of CESTAT. The CESTAT was directed to consider the appeal and decide the matter on merits in accordance with the law. The substantial questions of law were answered in favor of the Revenue.