Commissioner of Customs (General) vs M.K. Shipping Services

This appeal is directed against the order passed by the Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench, Mumbai ( 2013 (195) ECR 334 ). The Tribunal was seized off the appeal which was preferred by the original appellant M.K. Shipping Services-Respondent before us. That was directed against the order passed by the Commissioner of Customs (General), Mumbai dated 18-8-2011.

It is submitted by Mr. Pradeep S. Jetly, learned Counsel appearing on behalf of the Revenue before us that the Tribunal was considering the application for stay of the order passed by the Commissioner of Customs (General), Mumbai and impugned in the appeal. However, the Tribunal took up the appeal itself for final hearing and disposed it of by a cryptic order. The Tribunal has rendered contradictory and inconsistent findings. If the Tribunal was of the opinion that the respondent was denied a fair and reasonable opportunity to defend itself, then, the Tribunal should have restricted its finding and conclusion to this aspect and left the matter to be decided again and in accordance with law by the Competent Authority. However, the Tribunal has gone ahead and accepted the version of the respondent by omitting from consideration certain documents. The proceedings are of cancellation of licence as Customs House Agent. That was because the role played by the said agent in mis-declaration of goods under export in respect of a shipping bill. The goods were declared as "Basmati Rice" however, the test report and finding of the Competent Authority/Laboratory was that the product/goods were non-basmati rice. It is in these circumstances that the Customs House Regulations were stated to be violated. It is in that regard an inquiry was commenced. In the inquiry, several arguments were noted. The Tribunal has taken note of grievance of the respondent that the principles of natural justice have not been complied with. The Tribunal has, in referring to that argument, also expressed an opinion on the merits of the charges. The Tribunal should not have done that and if it was inclined to do so, it should have called for the entire record and proceedings before the adjudicating authority. Thereafter, it should have given opportunity to both sides to rely on the material produced. Thus, if the Tribunal was inclined to set aside the order on merits, then the course that should have been adopted by the Tribunal was to give complete opportunity to the appellant before us to substantiate the charge and equally to the respondent to deny the same. Instead, the Tribunal has rendered perfunctory findings and conclusions. It is in one breath held that the Investigating officers whose cross-examination was sought for by the Customs House Agent, never presented themselves for cross-examination during the inquiry proceedings thereby denying the respondent before us reasonable opportunity to prove his version or to substantiate his defence. The documents have been referred to and in Mr. Jetly''s complaint neither of them have been considered extensively leave alone their contents, before recording their opinion that none of the charges imputed have any basis. Therefore, he submits that the appeal deserves admission and on the substantial questions of law formulated in the Memo of Appeal.

On the other hand, it is submitted that in pursuance of the order passed by the Tribunal, the licensing authority has restored the licence by order dated 22-5-2013 and pending this appeal. Now that the licence has been restored, the respondent does not wish to press the writ petition seeking a direction to the Authority to restore the licence. Once the licence is restored then nothing survives in this appeal and it is rendered infructuous by passage of time. Alternatively, it is submitted that each of the findings of the Tribunal are based on the material produced and therefore, they cannot be termed as perverse or vitiated by any error of law. The respondent is ready and willing to have a complete hearing on the merits of the charges as well.

The request is, therefore the appeal should not be entertained and rather be dismissed.

Having heard the learned Counsel at some length and perusing with thief assistance the order of the Tribunal in the backdrop of some of the documents, we are of the opinion that the matter was decided by the Tribunal in most unsatisfactory and hasty manner. The respondent approached the Tribunal re-questing that the order impugned in the appeal preferred by it should be stayed. It is that limited request which has to be considered by the Tribunal. In considering that request the Tribunal thought that the matter involves very short point and can be conveniently disposed of at the stage of admission. It proceeded to dispose of the same finally. It is clear that when the appeal was being decided finally, the Tribunal relied only on the record produced by the respondent and not by the adjudicating authority. Thus, the complete record and proceedings were never called for. Secondly, the Tribunal if satisfied that principles of natural justice have been violated, then should have restricted its finding and conclusion only to that issue. The Tribunal then was not competent to express any final opinion on the merits of the charges. The Tribunal in doing that has clearly exceeded its jurisdiction. It has made observation which can be said to be conclusive and causing serious prejudice to the Revenue. The Revenue has produced several documents including a Laboratory Report. There is absolutely no reference made to that. All that has been recorded is that the report was not considered by the Inquiry Officer or the adjudicating Authority in the proceedings. If that was not considered and yet the Tribunal was inclined to go into the merits of the charges, then what impact/effect such report would have on the inquiry, should have been considered by the Tribunal. We do not find any reference to the certificates issued by the Laboratory and copies of which have been annexed to this Memo of Appeal. If the entire charge was baseless as held, there was no falsehood or alleged mis-declaration of the goods, then, it was incumbent upon the Tribunal to have considered this aspect in greater details. It should have had a complete version of both the sides. It should not have recorded such cryptic and brief reasons when the matter has been disposed off finally. For all these reasons, we are of the opinion that the order of the Tribunal is required to be quashed and set aside.

We are, therefore, admit this appeal on the following substantial questions of law:

(a) Whether the CESTAT was justified in deciding the appeal finally at the stage of consideration of stay application?

(b) If it was so justified, whether it was incumbent upon it in law to give complete opportunity to both sides and thereafter render a final conclusion and opinion?

(c) Whether in not assigning cogent and satisfactory reasons and omitting to refer to entire material, the Tribunal has misdirected itself in law and exceeded its jurisdiction as the Appellate Court?

With the consent of the Advocates, we have heard this appeal finally. After we have recorded the fact that the Tribunal was not justified in law in adopting the course that it adopted, that both sides are agreed that the order passed by the Tribunal, should be quashed and set aside and the appeal should be restored to file of the Tribunal for being decided afresh and in accordance with law. We, therefore, quash and set aside the impugned order dated 22-5-2012 and restore Appeal No. C/760/2011 to the file of the Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench at Mumbai, for decision afresh and on merits and in accordance with law.

The Tribunal shall decide this appeal uninfluenced by any observations and the findings recorded earlier. The Tribunal also should not be influenced by our observations in the present order. It is only to impress upon the Tribunal the fact that it is an Appellate Court and should not adopt a shortcut or short-circuit the proceedings in this manner that we have made the above observations. Beyond that we have not expressed any opinion on the rival contentions. We have not held that the inquiry was fair, just and proper or that the findings of the Inquiry Officer are not vitiated by perversity or by any error of law apparent on the face of record. All the contentions in that regard of both sides are kept open. The appeal shall be disposed of expeditiously, since it involves the question of livelihood of Customs House Agent.

At this stage, it is agreed that because the Deputy Commissioner of Customs CHA Policy Section, Mumbai-I has informed the respondent by communication dated 22-5-2013 that the Customs House Agent Licence No. 11/958 held by the respondent is restored, we expect the authorities not to cancel the same on the ground that the adjudicating authority has upheld the cancellation earlier. Since the appeal of the respondent is pending before the Tribunal, let the licence and restoration thereof be continued but without prejudice to the rights and contentions of both sides and subject to final order in the appeal.

Hence, the stay application on the file of the Tribunal need not be revived nor shall it be heard, but we expect the Tribunal to dispose of the appeal finally expeditiously. In relation to Writ Petition No. 1453 of 2013, in view of the Communication dated 22-5-2013, the writ petition is rendered infructuous. It is disposed of.