AI Drafter 
TaxTMI 
TaxTMI 
2020 (9) TMI 180
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....ve Marg, Marine Lines, Mumbai. Petitioner is a leading liquid infrastructure storage company and is also a manufacturer, exporter and importer of chemicals. It also acts as agent on behalf of suppliers. It has been in the business of manufacturing and export of different chemicals since the year 1988. 4. Central Government through the Ministry of Chemicals and Fertilizers, Department of Chemicals and Petrochemicals on 03.04.2018 issued an order called the Bureau of Indian Standard (Caustic Soda) Order, 2018. The aforesaid order was issued in exercise of the powers conferred by sub-sections (1) and (2) of section 16 of the Bureau of Indian Standards Act, 2016 and after consulting the Bureau of Indian Standards. As per the said order, it was made mandatory that caustic soda should conform to Indian Standard IS 252:2013. In other words, the good specified i.e., caustic soda should conform to the Indian standard mark IS 252:2013 under a licence from the Bureau of Indian Standards (BIS) whether it is manufactured in India or imported. It was clarified that the aforesaid order would come into force on the date of its publication in the official gazette. Be it stated that the said orde....
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.... When it was realised that the testing ought to have been conducted on the present standard IS 252:2013, petitioner made a further application dated 02.05.2019 before the customs authority for testing the goods as per the applicable BIS standard i.e., IS 252:2013. However, no action was taken on the said application. 6.4. As the petitioner was incurring heavy loss for not being able to put the imported goods into commercial use, it entered into an agreement with M/s. SKS Glocem Limited on 29.01.2019 for sale of 600 MTs of the goods on bond to bond basis. In this connection necessary application was made to the Assistant Commissioner of Customs. M/s. SKS Glocem (P) Ltd. in turn transferred the title of the goods to M/s. Camlin Fine Science Limited. M/s. Camlin Fine Science Limited filed bill of entry No.2015161 dated 11.02.2019 for clearance of the said goods. Accordingly, the goods were assessed and out of charge was granted by the Customs Department. 6.5. Similar transfer of goods was made by the petitioner, though for a lesser quantity, with M/s. Aqua Pharma Limited on 28.02.2019. 6.6. On instructions of M/s. Camlin Fine Science Limited and M/s. Aqua Pharma Limited, M/s.....
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....nzoplast Limited under section 112(a) of the Customs Act; and 3. Penalty on M/s. Narendra Forwarders (customs broker) under section 112(b) of the Customs Act. 7.2. In so far the present lis is concerned, the third question is not relevant. Regarding confiscability of the seized goods, respondent No.3 held that the imported goods are without standard mark; the supplier manufacturer is without valid BIS registration / licence; and the goods do not conform to the relevant standard. As such, it was held that the importation miscin question is in contravention of BIS requirements. After considering the rival contentions, respondent No.3 held that arguments put forward by the noticee i.e., petitioner were devoid of merit and hence liable to be rejected. Accordingly, respondent No.3 held that the seized goods were liable to confiscation under section 111(d) of the Customs Act. 7.3. Moving on to the next question i.e., imposition of penalty on the importer, respondent No.3 held that penal action under section 112(a) was invocable in the facts and circumstances of the case against the petitioner. However, respondent No.3 noted that it was on record that the importer had appli....
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....remanded back to the original authority for passing a fresh order after carrying out the necessary testing. It was clarified that principles of natural justice should be followed before passing a fresh order. Consequently, the appellate authority set aside the order-in-original dated 22.11.2019 and remanded the matter back to the original authority for compliance as per directions issued. It was directed that since the matter pertained to a live consignment, the original authority should complete the entire process on remand and pass a fresh order within a period of six weeks from the date of receipt of the said order. 9. On receipt of the appellate order, petitioner requested respondent No.3 vide letters dated 24.12.2019 and 03.01.2020 to comply with the order-in-appeal. Respondent No.3 was requested to draw samples from the goods and get those tested at the earliest. It appears that the samples were drawn in the first week of January, 2020 but there was inordinate delay in forwarding the same for testing to an accredited laboratory. This compelled the petitioner to write further letters dated 17.02.2020 and 19.02.2020 to respondent No.3. Petitioner continued to make correspond....
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....tution of India. 14. Respondents have filed affidavit in reply. It is stated that the importer had committed offence under order dated 03.04.2018 and rendered the subject goods liable for confiscation under section 111(d) of the Customs Act. Having reasonable belief that the said goods were liable for confiscation, the same were seize13-14d under section 110 of the Customs Act vide seizure panchanama dated 15.03.2019. Reference has been made to the show cause notice dated 25.07.2019 and thereafter to the order-in-original dated 22.11.2019. In so far appeal filed by the petitioner is concerned, it is stated that the same was disposed off by the Commissioner of Customs (Appeals), Zone-II vide order dated 20.12.2019 remanding the matter back to the original authority for drawing up fresh samples of the seized goods and getting those tested in an accredited laboratory. While setting aside the order-in-original dated 22.11.2019, appellate authority granted the original authority a period of six weeks for passing fresh order. 14.1. It is stated that the order-in-appeal dated 20.12.2019 was submitted before the Committee of Commissioners for review. Committee reviewed the same vide ....
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.... matter that the imported consignment reached the port of destination before such registration was done. However, the BIS registration was made available to the foreign manufacturer before the order-in-original was passed. Subsequently, as per test reports of accredited laboratory, the imported goods were found to conform to BIS standard mark IS 252:2013. Therefore, there can be no justification for withholding of such goods. He submits that BIS registration of the foreign importer would be counted from the date of making of application and not from the date of issue of registration. In this connection, he has placed reliance on a decision of the Supreme Court in State of UP Vs. Haji Ismail Noor Mohammad, (1988) 3 SCC 398 and a decision of CESTAT, West Zone, Mumbai Bench in Balmer Lawrie Van Leer Limited Vs. Chief Commissioner, 150 ELT 1298. 16. Per contra, Mr. Jetly, learned senior counsel for the respondents submits that the imported consignment of caustic soda was in violation of order dated 03.04.2018 as the manufacturer did not have the required BIS standard mark. The goods were rightly seized and thereafter confiscated. He submits that Commissioner of Appeals does not have....
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....tioner vide bill of entry dated 01.11.2018. Certain quantity of the imported goods were sold by the petitioner; the balance quantity remained discharged into petitioner's tank terminal under the overall custody of the Customs Department. The goods so imported did not have the BIS standard marking of IS 252:2013. Taking the view that non-compliance with the Central Government order dated 03.04.2018 making BIS standard marking IS 252:2013 mandatory placed the imported goods under the category of prohibited goods, the same was seized by the departmental authority on 15.03.2019. Following show cause notice and hearing, order-in-original was passed on 22.11.2019 ordering confiscation of the seized goods and imposition of penalty. 18.1. It may not be out of place to mention herein about two significant developments. Firstly, the foreign manufacturer was granted BIS registration of IS 252:2013 standard marking for the good caustic soda vide licence dated 30.09.2019. Secondly, the test report of fresh testing of the sample of the goods carried out by a BIS accredited laboratory post the order-in-appeal disclosed that the said goods in fact conformed to the BIS standard marking of IS 252....
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....tion of the seized goods and for imposition of penalty. '25.07.2019 '7. BIS issued licence to foreign manufacture. '30.09.2019 '8. Order-in-original passed. '22.11.2019 '9. Order-in-appeal passed. '20.12.2019 '10. Appellate order received by the Department. '08.01.2020 '11. Appellate order sent to Committee of Commissioners for examination. January,2020 '12. Decision of Committee of Commissioners to file appeal before CESTAT. '20.03.2020 '13. Department filed appeal along with stay application before CESTAT. '24.06.2020 20. Now, reverting to the order-in-original, we find that the original authority took the view that importation of caustic soda by the petitioner was without compliance to BIS standard IS 252:2013 made mandatory vide Government of India order dated 03.04.2018. Therefore, the said importation being in contravention of BIS requirements, was liable to confiscation under section 111(d) of the Customs Act. While further holding that penal action under section 112(a) of the Customs Act was invocable in the case of the petitioner, it was however observed that petit....
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.... the registration compliance cannot be held to have not been fulfilled. In fact the same was held to be sufficient compliance so far registration / licence is concerned. In this connection appellate authority referred to and relied upon a decision of the CESTAT in M/s. Balmer Lawrie Van Leer Limited (supra) as well as Government of India notification dated 15.12.2017. 21.4. Though the appellate authority referred to the test report of accredited laboratory dated 18.12.2018 which mentioned that the imported goods were in conformity with the specification of IS 252:1991, it was however stated that post 03.04.2018 import of caustic soda is subject to conformity with IS 252:2013 specification. Test report dated 18.12.2018 did not specify that the sample of imported caustic soda did not conform to IS 252:2013 specification. On this aspect the test report was inconclusive. Appellate authority also mentioned about petitioner's letter dated 02.05.2019 requesting drawal of fresh sample and further testing of the same in any BIS accredited laboratory to ascertain as to whether the goods conformed to IS 252:2013 standard specification. Referring to the Board's Circular No.30/2017 a....
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....titioner in the following terms:- "11. In view of the above, I set aside the order-in-original No.603/2019-20/JC/NS-1/CAC/JNCH dated 22.11.2019 passed by Joint Commissioner of Customs, NS I, JNCH, Nhava Sheva and remand the matter back to the original authority for compliance as per directions recorded hereinabove. Since the case is pertaining to a live consignment, the OA shall complete the entire process as directed hereinabove and pass a fresh order within a period of 6 weeks from the date of receipt of this order." 21.7. Thus the appellate authority set aside the order-in-original and remanded the matter back to the original authority for compliance of the directions issued making it clear that the entire exercise should be completed within a period of six weeks from the date of receipt of the appellate order. 22. From the above it is evident that the foreign manufacturer obtained licence on 30.09.2019 from BIS for the standard specification IS 252:2013 for its manufactured goods i.e., caustic soda which was imported into India by the petitioner on 01.11.2018. Post the order-inappeal, test report of the sample of the goods of BIS accredited laboratory showed that....
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....to the relevant provisions dealing with appeals to Commissioner (Appeals). As per section 128(1) of the Customs Act, any person aggrieved by a decision or order passed under the said Act by an officer of customs lower in rank than a Principal Commissioner of Customs or Commissioner of Customs may appeal to the Commissioner (Appeals) within 60 days from the date of communication of such decision or order which period is extendable on sufficient cause being shown. Sub-section (1A) provides that the appellate authority may grant adjournment of the hearing to either parties, subject to a maximum of three adjournments per party. 24.1. Section 128-A lays down the procedure in appeal. While subsections (1) and (2) may not be relevant for the purpose of the present deliberation, sub-section (3) is relevant. Prior to the amendment carried out by the Finance Act, 2001, sub-section (3) of section 128-A read as under:- "(3) The Commissioner (Appeals) shall, after making such further inquiry as may be necessary, pass such order, as he thinks just, - (a) confirming, modifying or annulling the decision or order appealed against; or (b) referring the matter back to th....
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....or decision only in three situations, viz., (i) where an order or decision was passed without following the principles of natural justice; or (ii) where no order or decision was passed after re-assessment under section 17; or (iii) where an order of refund under section 27 was passed without recording any finding on the evidence produced by the applicant. By the 2001 amendment, clause (b) conferring the power of remand has been omitted, thus limiting the power of Commissioner (Appeals) to confirming, modifying or annulling the decision or order appealed against. Does it mean, as Mr. Jetly would like to contend, that after the 2001 amendment Commissioner (Appeals) has been divested of the power of remand? 24.3. Sub-section (3) of section 128-A as it stands today says that Commissioner (Appeals) after hearing the appeal shall pass such order as he thinks just and proper confirming, modifying or annulling the decision or order appealed against. While it may not be difficult to comprehend the meaning of the expressions 'confirming', 'modifying' and 'annulling', suffice it to say that the expressions 'modifying' and 'annulling' would have to be given the wi....
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....pra) and in Swapan Dey (supra). Such a view is logical and reasonable considering the exercise of appellate jurisdiction by Commissioner (Appeals). Any other view would be restrictive to the exercise of appellate jurisdiction and would be unsound. We therefore find this contention of the respondents to be unsustainable and accordingly reject the same. 27. This brings us to the other contention of the respondents i.e., pendency of appeal before CESTAT for which reason the relief sought for by the petitioner i.e., release of goods, should not be granted. To appreciate this contention it would be apposite to examine the relevant provisions dealing with appeals to CESTAT. 27.1. Section 129 of the Customs Act deals with Appellate Tribunal, already referred to as CESTAT. Section 129A provides for appeals to Appellate Tribunal. As per sub-section (1), any person aggrieved by any of the orders mentioned therein may appeal to the Appellate Tribunal against such order. Clause (b) mentions about an order passed by the Commissioner (Appeals) under section 128-A. 27.2. Sub-section (2) provides for a Committee of Commissioners of Customs to examine amongst others an order passed by the ....
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....wn on account of coronavirus pandemic, it is inexplicable that Committee of Commissioners took more than two months from first week of January, 2020 to 20.03.2020 to decide whether appeal should be filed before CESTAT or not. This coupled with the fact that respondents did not contest the appeal of the petitioner before the Commissioner (Appeals) renders the objection raised by the respondents suspect. It may also be mentioned that though the appeal along with stay application was filed before the CESTAT on 24.06.2020, neither the appeal has been admitted nor has any stay been granted to the order-in-appeal. Not even a notice has been issued though urgent matters including stay applications are being heard by CESTAT through video conferencing. 30. The factual position is that the order-in-original dated 22.11.2019 has been set aside by the order-in-appeal dated 20.12.2019 with further direction to the original authority to conduct test afresh of the goods in BIS accredited laboratory and if the goods conform to IS 252:2013 standard specification then to release the same. Whatever be the outcome of testing, fresh order-in-original was directed to be passed by the original authori....
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....ble to confiscation. Thus seizure may be said to be the first step to confiscation. So when the order of confiscation is set aside, the order of seizure cannot survive. The legal implication of this is that without any order of seizure or confiscation, respondents are holding on to the goods of the petitioner. Such holding on is clearly without any authority of law and per se illegal. In fact such an action may amount to deprivation of the petitioner of his property without any authority of law and thus violative of Article 300A of the Constitution of India. 32. Coming to the second issue, it is also evident that the original authority has not passed the fresh order-in-original on remand as directed by the Commissioner (Appeals), not to speak of within the stipulated period of six weeks but even till date though fresh testing of goods has been carried out which incidentally has turned out in favour of the petitioner. What is striking to note is that the original authority who is a subordinate authority in comparison to the appellate authority i.e., Commissioner (Appeals) has chosen not to comply with the direction of the higher appellate authority exercising quasi-judicial power....