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Judgment
The department is in appeal against the order passed by Commissioner (Appeals) who dismissed the appeal on the ground of being time barred.
Brief facts of the case are that M/s.Ever Green Shipping Agency (India) Pvt. Ltd., the respondents herein had failed to file the EGM in respect of shipping bill dt. 05.12.2018 within the time as stipulated in Section 41 of Customs Act, 1962. The vessel sailed on 14.02.2018 and the shipping bill was filed much later. Show cause notice dt. 31.07.2018 was issued to the respondent alleging contravention of Section 41 of Customs Act, 1962 and proposing to impose penalty under Section 117 of the Act ibid. After due process of law, the original authority held that as per the Export Manifest (Vessel) Regulations, 1976 the EGM has to be filed within 7 days from the date of sailing of the vessel. The respondent filed the EGM on 20.02.2018 which is within time and therefore dropped the charges. Against this, the department filed appeal before the Commissioner (Appeals) raising the ground that the EGM has been filed only on 15.03.2018 and that adjudicating authority has wrongly mentioned the date of filing of EGM as 20.02.2018. However, after noting the facts with regard to merits of the case, the Commissioner (Appeals) vide impugned order dismissed the appeal filed by the department observing that the review order for filing the appeal before Commissioner (Appeals) was not issued within 3 months as stipulated in Section 129D (3) of the Customs Act, 1962. He thus dismissed the appeal on the technical ground of limitation. Hence Revenue is in appeal before this Tribunal.
Ld. A.R Shri L. Nandakumar appeared and argued on behalf of the department. He submitted that Commissioner (Appeals) has erred in dismissing the Revenue appeal as time barred. He adverted to para-6 of the impugned order and stated that the period of limitation has been computed from the date of dispatch of the OIO which is 30.11.2018. As per Section 129D (3) of the Customs Act, 1962, the review order has to be issued within 3 months from the date of the communication of the decision or the order of the adjudicating authority. The review order has been issued on 08.04.2019. This is well within the 3 months when computed from the date of communication of the order which is 09.01.2019. The Commissioner (Appeals) has erroneously computed the limitation of three months from the date of dispatch of the OIO instead of date of communication. He submitted that the OIO was communicated to the department only on 09.01.2019. If computed from this date, the review order issued on 08.04.2019 is well within time. The Commissioner (Appeals) ought not to have dismissed the appeal on the ground of being time barred. He relied upon the decision of the Tribunal in the case of Final Order NO.40855/2016 dt. 18.04.2016 in the case of CC (Exports), Chennai Vs Kapoor Imaging Pvt. Ltd.
None appeared on behalf of the respondent even though notice was issued to them. It is seen from the impugned order that the respondent has not appeared before the Commissioner (Appeals) also. The matter was therefore taken up for disposal after hearing the Ld. A.R and perusal of records.
At the outset, it has to be stated the Commissioner (Appeals) has not considered merits of the case but has dismissed the appeal on the ground of being time barred. It is held by Commissioner (Appeals) that the review order issued on 08.04.2019 is beyond the time limit stipulated under Section 129D (3) of the Customs Act, 1962. For easy reference, the said provision is reproduced as under :
"129D. Powers of Board or Principal Commissioner of Customs or Commissioner of Customs to pass certain orders.-(1) The Committee of Principal Chief Commissioner of Customs or Chief Commissioner of Customs may, of its own motion, call for and examine the record of any proceeding in which a Principal Commissioner of Customs or Commissioner of Customs as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order, direct such Commissioner or any other Commissioner to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Committee of Principal Chief Commissioner of Customs or Chief Commissioner of Customs in its order :
Provided that where the Committee of Principal Chief Commissioner of Customs or Chief Commissioners of Customs differs in its opinion as to the legality or propriety of the decision or order of the Principal Commissioner of Customs or Commissioner of Customs, it shall state the point or points on which it differs and make a reference to the Board which, after considering the facts of the decision or order passed by the Principal Commissioner of Customs or Commissioner of Customs, if is of the opinion that the decision or order passed by the Principal Commissioner of Customs or Commissioner of Customs is not legal or proper, may, by order, direct such Commissioner or any other Commissioner to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order, as may be specified in its order.
(2) The Principal Commissioner of Customs or Commissioner of Customs may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority or any officer of Customs subordinate to him to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Principal Commissioner of Customs or Commissioner of Customs in his order.
(3) Every order under sub-section (1) or sub-section (2), as the case may be, shall be made within a period of three months from the date of communication of the decision or order of the adjudicating authority :
Provided that the Board may, on sufficient cause being shown, extend the said period by another thirty days."
As seen from the above, the review order has to be issued within 3 months from the date of communication of the decision or order of the adjudicating authority. In the present case, the order is passed by the adjudicating authority on 31.10.2018 and the date of dispatch of the order is 30.11.2018. The Commissioner (Appeals) has computed the period of 3 months from the date of dispatch i.e. 30.11.2018. As correctly argued by the Ld. A.R, the limitation prescribed in this Section has to be computed from the date of communication of the order. The last page of the OIO furnished along with the appeal paper book shows that the order was communicated to the department only on 09.01.2019. If calculated from this date, the review order issued on 08.04.2019 is well within 3 months.
Section 129D uses the word 'three months' and not "ninety days". The period has to be calculated on the basis of actual calendar months. Section 3 (35) of General Clauses Act, 1897 provides that the word "month" would mean a calendar month and by extension of the term 'three months' would only mean a period of three calendar months. Thus, the period would expire in the third month on the date corresponding to the date upon which the period starts. As a result, depending upon the months, it may be 90 days or 91 days or 92 days or 89 days, as the case may be. For example, the months of January, February, April would have different number of days. In the case of Bibi Salma Khatoon Vs State of Bihar - AIR 2001 SC 3596, it was held that when the period prescribed is a calendar month running from any arbitrary date, the period of one month would expire upon the date in the succeeding month corresponding to the date upon which the period starts irrespective of some months being longer than the rest. Only after proper receipt of the order, the time period would start to run. The Hon'ble Supreme Court in the case of UOI Vs Techno Trichy - (2005) 4 SCC 239 has held that communication of a order is not a matter of formality but of substance as it confers certain rights to a party. In the present case, the date of communication of the review order is 09.01.2019. The Commissioner (Appeals) has erred in computing the period of limitation from the date of dispatch. Therefore, I hold that the review order issued on 08.04.2019 is well within time and the impugned order passed by Commissioner (Appeals) dismissing the Revenue appeal as time-barred is not legal and proper.
Before parting with the case, it is to be stated that the amount involved in the present case is only Rs.50,000/- (Rupees Fifty thousand only). It is a penalty imposed under Section 117 of the Customs Act, 1962. In terms of Board's circular issued in F.No.390/Misc./163/2010-JC dated 17.08.2011 regarding the Government's litigation policy, it is stated that monetary limit for filing appeal by the department before CESTAT is Rs.5 lakhs. Thereafter, the said monetary limit has been enhanced to Rs.50 lakhs. Still, the department has sought to file the present appeal overlooking the circulars issued prescribing the monetary limit for filing the appeals by the department before Tribunal. When the Bench raised this point, Ld. A.R submitted that the matter involves question of law. In para-17 of the written submissions, the department has raised this contention as under :
"17. Hence it is very clear from the above Board instructions that the department had to contest before higher forum for the three exception clauses given below : Adverse judgments relating to the following should be contested irrespective of the amount involved :
a. Where the constitutional validity of the provisions of an Act or Rule is under challenge.
b. Where notification/instruction/order or Circular has been held illegal or ultra vires.
c. Classification and refunds issues with are of legal and / or recurring nature."
I do not find that the present case would fall within any of the criteria above. The constitutional validity of the provisions in the Customs Act or the Rule is not under challenge in the present case. If the appeals are to be filed overlooking the circulars prescribing the monetary limit by hanging on to such a vague grounds, the said circular would itself become meaningless and redundant. Such act of disobliging the Board's circular is not appreciable. The present issue as to whether the time limit of three months has to be calculated from the date of dispatch or from the date of communication is a settled issue and there are umpteen numbers of judgments on this point. It is not an issue involving any question of law to be decided by a forum or authority by filing an appeal overlooking the binding circulars. The contention of the department that this is an issue involving question of law having far reaching consequences is highly chimerical.
This apart, the penalty is imposed under Section 117 for late filing of EGM. In Circular No.01/2019-Customs in F.No.450/119/2017-Cus-IV dated 02.01.2019, the Board after taking note of the difficulty in processing IGST Export Refunds has instructed in para 2 (iii) and (iv) as follows :
"(iii) Non-filing of EGM clearly hints at non-compliance by the custodian / person in charge of the conveyance carrying export goods. Section 41 of the Customs Act authorizes the customs officer to take action against such non-filers. However, more than invoking the penal sections, jurisdictional Commissioners need to constantly monitor the activity of timely filing of the EGM and take necessary steps to ensure the same.
(iv) Board expects its jurisdictional officers to take all necessary steps to ensure that all EGMs of cargo related to past cases are filed before 31st January, 2019. As a measure of facilitation, penal provisions may not be invoked for EGMs filed till 31st January, 2019. However, continued non-compliance beyond 1st February, 2019 may be dealt strictly by taking recourse to penal provisions in accordance with the law."
In the present case, the cause of action is prior to 31.01.2019. Further, there is no allegation of continued non-compliance to take recourse to penal provisions.
From the discussions made, I set aside the order of the Commissioner (Appeals) rejecting the appeal on the ground of being time barred. The matter is remanded to the Commissioner (appeals) who shall decide the case on merits. The appeal is disposed of in the above terms.
(Pronounced in open Court on 06.08.2021)