The Delhi High Court has slammed the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) for contradictory orders citing lack of pecuniary jurisdiction.
The bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta has observed that Instruction dated 2nd November, 2023, issued by the CBIC wherein monetary limits have been fixed for filing of appeals by the Department. In terms thereof, for CESTAT appeals, the monetary limit would be to the tune of Rs.50 lakhs.
The petitioner/assessee had imported certain semi-finished Coaxial Cables in the year 2011 and an allegation of under- valuation was raised against the Petitioner. The goods were, consequently, detained on 2nd December, 2011.
The Petitioner sought provisional release of the goods and the same was permitted subject to certain conditions including furnishing of a bank guarantee.
After completion of investigation, a Show Cause Notice was issued and customs duty to the tune of Rs.29,66,805 was demanded. The Bank Guarantee was also proposed to be encashed. In response to the Show Cause Notice, a reply was filed and finally the Order- in-Original was passed on 30th September, 2013.
In terms of the order, the demand of custom duty was confirmed and the goods were confiscated. However, the Authority gave the Petitioner an opportunity to redeem the goods subject to payment of a redemption fine to the tune of Rs.20 lakhs.
The Department challenged this order before CESTAT. The Tribunal vide order dated 9th December, 2016 dismissed the second appeal preferred by the Department on account of non-appearance by the Petitioner/Company. Strangely, the Revenue’s Appeal was dismissed due to non-appearance of the Petitioner herein.
Thereafter, upon an application by the Department, the previously dismissed appeal, being Customs Appeal No.53499/2014 (DB) was restored to be heard on merits.
The CESTAT was of the opinion that the Commissioner (Appeals) had accepted the value based on the NIDB data. However, the Engineer who had certified that the Petitioner had imported semi-furnished goods was not cross-examined. Thus, the CESTAT was of the opinion that the Commissioner (Appeals)’s order was not sustainable. However, strangely once again, the department’s appeal was dismissed when the logical consequence of the said conclusion was to either remand the matter or to fully allow the appeal of the department.
The petitioner contended that the petitioner is aggrieved by the fact that the Revenue’s Appeal which was initially dismissed and fixed for final hearing, has now been allowed. Thus, three different orders have been passed by the CESTAT in the same appeal.
The court held that the contradictory order could not have been passed in the same appeal. The final order again shows that CESTAT has not considered that the matter was to be finally heard in terms of order. The proper course of action would have been for CESTAT to completely re-hear the matter on merits which it has not done.
The court noted that the present dispute would be clearly covered by the circular dated 2nd November, 2013, as the amount involved is less than Rs. 50 lakhs. Upon hearing both the parties in detail, this Court is of the opinion that in view of the instructions, the appeal of the Department before CESTAT deserves to be dismissed. Accordingly, in exercise of powers conferred under Article 227 of the Constitution of India, the appeal filed by the Department before CESTAT stands dismissed, in view of the monetary limits. The bank guarantee shall be released within a period of 8 weeks.
Case Details
Case Title: Jai Durga Rubberised Fabrics India Pvt. Ltd. Versus Commissioner Of Customs
Case No.: W.P.(C) 530/2025
Date: 19th March, 2025
Counsel For Petitioner: Mr. Pradeep Jain, Mr. Sbhubhankar Jha, Mr. Sambhav Jain & Mr.Pranav Raj Singh, Advs.
Counsel For Respondent: Mr. Aditya Singla, SSC (CBIC) with Mr. Siddharth Saxena, Mr. Ritwik Saha and Mr. Umang Misra, Advs.
Read More: Mandatory GST E-Invoice Integration for Deemed Export Benefits Under FTP 2023: DGFT Seeks Comment
