2021 (12) TMI 1119 - HC - Customs

High Court overturns tribunal ruling for lack of thorough assessment, remands case for fresh consideration.

The High Court set aside the Customs, Excise and Service Tax Appellate Tribunal's order due to insufficient consideration of the Commissioner's reasons ... Smuggling - Betel Nuts - proper investigation of matter not carried out - mens rea involved or not - Section 123 of the Customs Act, 1962 - HELD THAT:- Ideally, the Tribunal ought to have assessed the reasons furnished by the Commissioner in the order-in-original and the challenge thrown by the respondent herein to such findings. Instead, the Tribunal gave much credence to the observations of this Court in the order of May 6, 2019 to the effect that when the four suppliers had affirmed affidavits to confirm that they had supplied the goods to the respondent herein, there was little reason to question the same - It is true that the observation is found in the order of May 6, 2019 of this Court. However, such observation of this Court had to be read in the context of the failure of the Tribunal in course of its original order dated March 23, 2018 to indicate that the mind of the Tribunal had been applied to the matters in issue as the limited discussion in the relevant order of the Tribunal did not refer to the challenges on divers counts that the respondent herein carried against the findings on facts rendered by the Commissioner in the order-in-original. In the order impugned, the Tribunal has also observed that no mens rea was involved since the goods would attract 5% duty. That appears to be a matter of conjecture and merely because the goods would have attracted a nominal duty cannot be a brush to sweep aside the cogent findings contained in the order-in-original of the Commissioner without referring to and dealing with the same in the light of the challenge thereto thrown by the respondent herein - The Tribunal is tasked with the duty of assessing the grounds made out in support of an order. In this case the Tribunal appears to have abdicated its authority to decide and dealt with the matter at a superficial level without referring to either the grounds indicated in the order-in-original or the grounds of challenge fashioned by the respondent herein. The order impugned dated December 23, 2019 is found to be exceptionable and same is set aside with a request to the Tribunal to consider the matter afresh uninfluenced by any observations contained in the previous order of this Court or in the present order - matter remanded to the Tribunal for the respondent's appeal before it to be considered afresh in accordance with law - appeal allowed by way of remand. Issues:- Questioning the propriety of an order passed by the Customs, Excise and Service Tax Appellate Tribunal- Allegations of improper consideration of facts and findings by the Tribunal- Assessment of reasons furnished by the Commissioner in the order-in-original- Failure of the Tribunal to address challenges raised by the respondent- Lack of detailed consideration by the Tribunal in its orders- Observations regarding mens rea and duty implications- Setting aside the impugned order and remanding the matter for fresh considerationAnalysis:The High Court judgment pertains to the questioning of an order passed by the Customs, Excise and Service Tax Appellate Tribunal. The department raised concerns regarding the Tribunal's failure to properly consider the matter after it was remanded for fresh consideration. The Tribunal's order was criticized for not adequately addressing the detailed reasons provided by the Commissioner in the original order. The Court highlighted the importance of assessing the grounds put forth by both parties and criticized the Tribunal for giving more weight to previous court observations rather than thoroughly examining the factual and legal aspects of the case.The case involved a large haul of betel-nuts seized from the respondent's possession, suspected to be smuggled goods. The Commissioner had detailed reasons for disbelieving the respondent's claims about the origin of the goods, citing discrepancies in credit memos and lack of supporting documentation. The Tribunal's orders were deemed lacking in depth, with the Court emphasizing the need for a comprehensive assessment of the grounds presented by both parties.The judgment underscored the Tribunal's duty to delve into the specifics of the case and not rely solely on superficial observations or assumptions. The Court set aside the impugned order and directed the Tribunal to reconsider the matter without being influenced by previous court remarks, emphasizing the importance of a thorough evaluation of the facts and challenges raised by the respondent. The case was remanded for fresh consideration, urging prompt resolution due to the prolonged nature of the dispute.