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IN THE HIGH COURT OF BOMBAY
Ujjal Bhuyan, Anuja Prabhudessai, JJ.
Ganesh Benzoplast Limited - Appellant
Versus
Union Of India And Others - Respondent
Writ Petition (St) No. 5703 of 2020
Decided On : 02-09-2020
CUSTOMS ACT - SEIZURE OF GOODS - CONFISCATION - APPEAL - REMAND - RELEASE OF GOODS - POWER OF COMMISSIONER (APPEALS) TO REMAND - LIMITATION FOR FILING APPEAL BEFORE CESTAT - NON-COMPLIANCE WITH APPELLATE ORDER - JUDICIAL DISCIPLINE - ARTICLE 300A OF THE CONSTITUTION OF INDIA.
Fact of the Case:
Petitioner, a public limited company, imported caustic soda from Iran. The Central Government had issued an order making BIS standard marking of IS 252:2013 mandatory on the specified good "caustic soda". The foreign manufacturer had applied for a license in terms of the above order but before such license was granted, the goods were imported by the petitioner. The goods were seized by the departmental authority on the ground that non-compliance with the Central Government order placed the imported goods under the category of prohibited goods. Following show cause notice and hearing, order-in-original was passed confiscating the seized goods and imposing penalty. The order-in-original was set aside in appeal by the Commissioner of Customs (Appeals) vide the order-in-appeal dated 20.12.2019. After setting aside the order-in-original, appellate authority remanded the matter back to the original authority directing the latter to draw fresh samples of the goods in question and get the same tested through a BIS accredited laboratory to ascertain whether the goods conformed to IS 252:2013 specification or not, with the further direction that if the goods conformed to the above specification then the goods should be cleared. Since the consignment was a live one, original authority was directed to complete the exercise within six weeks from the date of receipt of the appellate order. Following the order-in-appeal, fresh samples of the goods were drawn and tested in a BIS accredited laboratory. Test report indicates that the goods conform to IS 252:2013 standard specification. Notwithstanding the same, original authority has not passed the fresh order-in-original as directed by the appellate authority. The goods have also not been released to the petitioner. Non-release of goods has been justified and defended by the respondents on the ground that the Department has filed appeal against the order-in-appeal before the CESTAT.
Finding of the Court:
1. The Commissioner (Appeals) has the power to remand a matter to the lower authority even after the amendment in section 128A(3) of the Customs Act. 2. The limitation period for filing an appeal before CESTAT commences from the date on which the order sought to be appealed against is communicated and not from the date of decision or opinion rendered by the Committee of Commissioners under sub-section (2) of section 129A of the Customs Act. 3. After the order-in-original has been set aside there is no order of confiscation of the goods. When an order is set aside by a superior authority, the consequence thereof is that it becomes inoperative; it is rendered null and void; it is erased from the record book as if it was never passed. 4. The mere fact that the order of the appellate authority is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court.
Issues: 1. Whether the Commissioner (Appeals) has the power to remand a matter to the lower authority even after the amendment in section 128A(3) of the Customs Act? 2. Whether the limitation period for filing an appeal before CESTAT commences from the date on which the order sought to be appealed against is communicated or from the date of decision or opinion rendered by the Committee of Commissioners under sub-section (2) of section 129A of the Customs Act? 3. What is the legal effect of setting aside of the order-in-original by the appellate authority? 4. Whether the mere fact that the order of the appellate authority is the subject matter of an appeal can furnish a ground for not following it?
Ratio Decidendi: 1. The power of remand which was available prior to the amendment was very limited; exercise of which was restricted to only three situations; by omitting this provision the limitation or restriction on remand has now been removed. Therefore, when we say 'modifying' or 'annulling' the decision or order appealed against, it would indicate setting aside of the impugned order and in an appropriate case remanding of the matter back to the original authority for fresh decision by removing the lacuna and by following the due procedure. In our opinion, this power of remand is inherent in an appellate authority exercising quasi-judicial powers. 2. Section 129A(3) of the Customs Act provides that every appeal under section 129-A shall be filed within three months from the date on which the order sought to be appealed against is communicated. Therefore what is of relevance is that the limitation of three months commences from the date on which the order sought to be appealed against is communicated and not from the date of decision or opinion rendered by the Committee of Commissioners under sub-section (2). 3. After the order-in-original is set aside by the appellate authority, the order of confiscation no longer survives. When an order is set aside by a superior authority or appellate authority, the consequence thereof is that such an order loses its effectiveness and becomes inoperative. 4. The mere fact that the order of the appellate authority is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court.
Final Decision: Writ petition allowed. The goods imported by the petitioner were ordered to be released forthwith.
JUDGMENT
Ujjal Bhuyan, J. - By filing this petition under Article 226 of the Constitution of India, petitioner seeks a direction to respondent No.3 to comply with the appellate order dated 20.12.2019 and further seeks a direction to respondent No.3 to release the seized goods which were imported vide the bill of entry dated 01.11.2018.
2. We have heard Mr. Nankani, learned senior counsel along with Mr. Prithviraj Choudhary, learned counsel for the petitioner and Mr. Jetly, learned senior counsel along with Mr. J. B. Mishra for the respondents.
3. Petitioner is a public limited company registered under the Companies Act, 1956 having its registered office at Maharshi Karve 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 order was published in the Gazette of India, Extraordinary on 03.04.2018 itself.
5. According to the petitioner, the manufacturer in Iran who intended to supply caustic soda to India, viz., M/s. Aravand Petrochemical Company, Tehran, applied to the BIS on 09.10.2018 for a licence indicating that the product manufactured by them and which would be imported into India conform to IS 252:2013 standard specification.
6. A consignment of 9679.68 MTs i.e., 19515.489 LMTs of caustic soda was imported by the petitioner from M/s. Mena Energy, Dubai, United Arab Emirates vide bill of entry No.8697133 dated 01.11.2018. M/s. Mena Energy (referred to hereinafter as 'the supplier') had procured the aforesaid quantity of caustic soda from the manufacturer in Iran i.e., M/s. Aravand Petrochemical Company (referred to hereinafter as the 'foreign manufacturer') vide IGM No.2208452 dated 26.10.2018. The declared value of the goods is Rs.30,70,90,590.00.
6.1. Petitioner has stated that the application made by the foreign manufacturer with BIS was not processed in time. In the meanwhile the consignment was shipped by the supplier. Therefore when the goods arrived in India it was not accompanied by the required BIS certificate in terms of the order dated 03.04.2018. As the goods reached the destination port i.e., Nhava Sheva, Raigad, petitioner filed bill of entry for warehousing under section 46(1) of the Customs Act, 1962 (briefly the 'Customs Act' hereinafter) till such time the required licence was granted to the foreign manufacturer. Being liquid cargo, discharge permission was procured and the cargo was discharged in petitioner's tank terminal in tank Nos.139 and 140 on 08.11.2018.
6.2. According to the petitioner, during that period consignments of similar nature without BIS certificate were cleared at various ports, including at Nhava Sheva, by conducting a test at approved laboratories. Accordingly, when the goods arrived at the port of destination petitioner made an application dated 19.11.2018 to the Deputy Commissioner of Customs, Group-II, Nhava Sheva for drawing a sample to examine the quality of the go
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