Commissioner of Customs vs Sir Md. Yaseen

K.L. Manjunath, J.—The revenue has come up in this appeal being aggrieved by the order of the Customs, Excise & service Tax Appellate Tribunal/south Zonal bench, Bangalore, in Final Order No. 965 dt.21.6.2005.

The facts leading to this case are as hereunder:

It is the case off the revenue that an attempt was made by the respondent to clear an imported car vide Bill of Entry No. 02438 dt. 8.9.99 by manipulating certain documents to avail certain benefits. The revenue issued a show cause notice on 15.11.99. The car was also confiscated and imposed a penalty of Rs. one lakh vide order in original No. 6/2000 dt 4.2.2000. Being aggrieved by the order of confiscation and levy of penalty, the respondent-assessee filed an appeal before the commissioner of Appeals, who directed the respondent to deposit a sum of Rs. 50,000/- as a condition to hear the appeal as required u/s 129A of the Customs Act and he also passed an order to release the car on payment of Rs. one lakh and he reduced the penalty to Rs. 50,000/-. Thereafter, the assessee addressed letters dt.7.2.2002, 20.3.2002 and 27.6.2002 to release the car on the ground that he is willing to pay the duty payable on the vehicle. Later on, he came to know that his car was sold by the revenue during the pendency of this appeal before the commissioner of appeals. In the circumstances, he approached this Court by filing a writ Petition on the ground that his requests to release the car has not been considered by the revenue. This Hon''ble Court in W.P. No. 44082/2002 dt.22.6.2004 directed the revenue to consider the representation of the petitioner within a period of three months from the date of receipt of the order. On the ground that his grievance has not been considered, the assessee filed an appeal before the Tribunal stating that the case of the assessee has not been considered. The Tribunal considering the various decision of the court held that the assessee is entitled for refund of the value as valued in the Mahazar at the time of seizure along with the interest at 12% p.a. As the Department is not in a position to deliver the vehicle and on the ground that the vehicle sold illegally without bringing it to the notice of the appellate Commissioner wheat the appeal was pending. This order is challenged in this appeal by raising the following substantial questions of law:

i. whether the Tribunal could have directed payment of mahazar value of the imported car contrary to the order dated 25.1.2002 pasted by the Commissioner of Customs (Appeals), which has attained finality.

ii) Whether the Tribunal is Justified in directing payment of mahazar value of the imported car without reference to the customs duty payable thereon?

iii) Whether the Tribunal has committed an error in entertaining the appeal u/s 129A of the Customs Act notwithstanding the fact that the order of the Commissioner was not an adjudication order?

iv) Whether the Tribunal has committed an error in observing that the vehicle could not have been disposed of during the pendency of the appeal before the commissioner customs (Appeals)?

v) Whether the order passed by the Tribunal is perverse and arbitrary?

We have heard the learned Counsel for the parties.

The main contention of the revenue before us is that the filing of Writ Petition itself is had in law and that the assessee had not challenged the auction of the car by the Department by filing an appeal before the Tribunal. Therefore, the relief granted to the assessee by this Court in the Writ Petition was had in law and similarly the order of the CESTAT also has to be set aside as without jurisdiction.

Per contra, the learned Counsel for the assessee contends that the department, behind the back of the assessee and the appellate commissioner before whom the appeal was pending, has sold his car and as a result of which the order of the Commissioner (Appeals) cannot be given affect to by the revenue, in the circumstances, he approached this Court in a Writ Petition. He further submits that this Court has rightly granted an order in favour of the assessee directing the respondent to consider the grievance of the assessee. In the background, the car being sold during the pendency of the appeal. He further submits that it the Revenue had no grievance in regard to the disposal of the writ Petition by this Court, it was for the revenue to take tip the matter in appeal. Without taking the matter in appeal, it is not open for the revenue to contend that the order passed by the learned Single Judge in the Writ Petition as bad in law. He further contends that when the assessee was willing to pay the duty as ordered by the commissioner (Appeals), it is for the Department to receive the payment and deliver the vehicle. Since the revenue is not in a position to deliver the vehicle on account of his selling the vehicle, has rightly granted relief to the assessee directing the revenue to pay the value of the car as per the Mahazar value along with Interest at 12% p.a. since the appellant has deprived the respondent-assessee to use his own car. In the circumstances, he requests this Court to dismiss the appeal.

Having heard the parties, we are of the opinion that there was no dispute with regard to the following extent:

That the appellant had taken up the matter before the Appellate Commissioner being aggrieved by the levy of penalty and duty and he was willing to pay the duty as ordered by the Appellate Commissioner. Though he was billing to pay the amount in terms of the directions of the Appellate Commissioner''s order the revenue is not in a position to deliver the car to the asses see on account of sale of the car during the pendency of the appeal. It is also not in dispute that the revenue has sold the car during the pendency of the appeal without issuing any notice to the assessee and without replying to the notice of the appellate Commissioner and that the revenue has not obtained any permission from the appellate Commissioner to sell the vehicle during the pendency of the appeal. Therefore, it is clear that even though the assessee was willing to pay the duty and penalty as ordered by the Commissioner, on account of sale of the car by the revenue, the revenue is not in a position to receive payment and deliver the car. In the circumstances, we are of the opinion the Tribunal was justified in directing the appellant to pay the Mahazar value of the car Along with interest at 12% p.a. considering the interest payable to a customer by the Bank on the fixed deposits and it is to be observed by this Court 12% ordered by the Tribunal is not considering the lending rate of interest but it is on the interest payable during relevant assessment year on the investment to pay a customer in a Bank on the fixed deposit. Therefore, we cannot find any error in the order pas sad by the Tribunal. IK the circumstances, we are of the opinion, that question No. 1 has to be answered against the appellant-revenue since the appellant is unable to deliver the vehicle to the assessee and what is ordered is only to return the Mahazar value of the car as on 25.1.2002 since the Manager is conducted by the appellant-revenue only, Accordingly, question No. 1 answered against the revenue.

Similarly, question No. 2 has to be answered against the revenue since the appellant cannot collect customs duty on account of sale of the vehicle by the revenue. Similarly, question Nos. 3 and 4 are also to be answered against the revenue on account of our finding on question Nos. 1 and 2. It is to be noted so far as question No. 3 is concerned, the order of the Appellate Commissioner has become final since the revenue has taken up the said order in appeal. Therefore, it is not open for the revenue to contend in collateral proceedings stating that the order of the Appellate Commissioner is bad in law.

In the circumstances, the Appeal is dismissed.