2024 (12) TMI 625 - HC - Customs

Appeals under Section 15 maintainable against MEIS scrip rejection letters despite authority classification issues

The Bombay HC held that appeals under Section 15 of the Foreign Trade (Development and Regulation) Act, 1992 are maintainable against rejection letters ... Maintainability of appeal - refusal to entertain the appeal filed by the petitioner on the ground that the rejection letter issued by the Joint Director General of Foreign Trade (JDGFT) is not a decision or order passed by the adjudicating authority and since Section 15 of Foreign Trade (Development Regulation) Act 1992. Whether an appeal is provided under Section 15 against a letter rejecting the petitioner's application for grant of MEIS scrip? HELD THAT:- Section 9 of Foreign Trade (Development and Regulation) Act, 1992 provides for issuance/ suspension/cancellation of licence. Section 9(1) provides that the Central Government may levy fees in respect of application for a licence, certificate, scrip etc to be granted or renewed. Section 9(2) provides for processing of such application after making necessary inquiries for grant or renewal as the case may be of the licence, certificate, scrip etc and for recording reasons for refusal. Section 9(5) provides that an appeal against an order refusing to grant or renew or suspending or cancelling a licence, certificate, scrip etc shall lie in like manner as an appeal against an order would lie under Section 15. Section 15(1) begins with appeals from orders passed by the adjudicating authority. When Section 9 deals with issuance of MEIS scrip and the application made for the same and processing of the same, the authority who would be processing the application under Section 9 would not be an adjudicating authority. However, when Section 9(5) provides for appeal in like manner as an appeal against an order would lie under Section 15, it would contemplate an order passed by the authority who need not be an adjudicating authority as defined in Section 2 (a) read with Section 13 of the Foreign Trade (Development and Regulation) Act 1992 but has trappings of the adjudicating authority. Therefore, when there is a reference to Section 15 in Section 9(5), it would mean that an appeal filed under Section 15 refusing to grant or renew or suspend or cancel a licence, certificate, scrip, etc would mean an order passed not by the adjudicating authority as defined by Section2(a) of the 1992 Act. Therefore, it would not be correct for the respondents to contend that since the rejection order is not passed by the adjudicating authority as defined under the Act, no appeal would lie. In the instant case, while processing the application for issuance of MEIS scrip under Section 9, the authority who would be processing the application and after making inquiry as he may think fit before granting or renewing or refusing of grant or renew the licence etc. would have to be treated as an adjudicating authority for the limited purpose of Section 15 read with Section 9 because, he is the authority who is deciding the claim of grant of scrip to the applicant and if so construed, then, the letter rejecting the application for issuance of MEIS scrip will have to be treated as a decision or order by an adjudicating authority which would be appealable under Section 15 of the Foreign Trade (Development and Regulation) Act, 1992. Therefore, even on this count, the appeal would be maintainable - the ADGFT/Appellate Authority rejecting the appeal because the rejection letter is not a decision or the order passed by the adjudicating authority would not be the correct reading of the appeal provision. From any angle, the appeal was filed with the correct authority, but the correct authority rejected it on the erroneous ground that the rejection order is not the decision/order passed by the adjudicating authority, which we have already opined is incorrect. Therefore, the impugned order rejecting the petitioner's appeal as non-admissible is required to be quashed and set aside. It is a settled position that the quasi-judicial authority speaks his mind through his order, and, therefore, the order dealing with the application should have been a speaking order showing clearly the reason for coming to the conclusion. In our view, this is absent in the impugned rejection letter. Therefore, in the interest of justice, the rejection letter dated 9 December 2022 set aside and the application dated 27 January 2022 remanded back to the file of respondent no.4 for fresh consideration after giving an opportunity of hearing to the petitioner and direct the respondent no.4 to pass a speaking order deciding the application of the petitioner dated 27 January 2022. The impugned order dated 10 November 2023 rejecting the petitioner's appeal as non-admissible is quashed and set aside - the rejection letter dated 9 December 2022 passed by the JDGFT and the Order-in-Appeal dated 10 November 2023 passed by the ADGFT is quashed and set aside - petition allowed by way of remand. Issues Involved:1. Whether an appeal is maintainable under Section 15 of the Foreign Trade (Development and Regulation) Act, 1992 against a rejection letter issued by the Joint Director General of Foreign Trade (JDGFT).2. Whether the rejection letter dated 9 December 2022 by JDGFT was a non-speaking order and lacked consideration of the petitioner's submissions and documentary evidence.Issue-wise Detailed Analysis:1. Maintainability of Appeal under Section 15:The primary issue was whether the rejection letter issued by JDGFT could be appealed under Section 15 of the Foreign Trade (Development and Regulation) Act, 1992. The petitioner contended that the appeal was maintainable under Section 9 read with Section 15, as Section 9(5) provides for an appeal against an order refusing to grant or renew a licence, certificate, or scrip in a manner similar to appeals under Section 15. The court analyzed the definition of 'adjudicating authority' under Section 2(a) and Section 13, noting that these sections typically apply to penalty impositions or confiscations. However, the court concluded that the authority processing the application under Section 9, although not an 'adjudicating authority' in the traditional sense, has the trappings of such authority. Therefore, the rejection of the appeal by ADGFT on the grounds that the rejection letter was not a decision or order by an adjudicating authority was incorrect. The court emphasized that the appeal should be maintainable as the ADGFT is a superior authority authorized to hear appeals against JDGFT's orders, as per Notification 101 (RE-2013)/2009-2014.2. Nature of the Rejection Letter:The second issue was whether the rejection letter dated 9 December 2022 was a non-speaking order. The court noted that the rejection letter failed to provide a detailed analysis or reasoning for the rejection, merely stating that the supplies were made against ineligible categories without addressing the petitioner's contention regarding the warehousing of goods in the Free Trade and Warehousing Zone. The court reiterated the principle that a quasi-judicial authority must articulate its reasoning in a speaking order. The lack of specific reasons or correlation details in the rejection letter rendered it deficient. Consequently, the court quashed the rejection letter and remanded the application back to JDGFT for fresh consideration, directing JDGFT to issue a speaking order after providing an opportunity for a hearing to the petitioner.Conclusion:The court quashed the impugned orders dated 10 November 2023 and 9 December 2022, directing JDGFT to reconsider the petitioner's application dated 27 January 2022 with a speaking order by 31 March 2025. The appeal was deemed maintainable, and the rejection letter was found to be lacking in necessary detail and analysis. The rule was made absolute with no order as to costs.