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Musthafa Ahamed Umar Dossa v/s Customs, Excise and Gold (Control) Appellate Tribunal, Chennai & Another

    C.M.A. No. 1908 of 2007

    Decided On, 04 December 2014

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE R. SUDHAKAR & THE HONOURABLE MR. JUSTICE R. KARUPPIAH

    For the Appellant: Krishna Anand, M/s. S.Ramachandran, Advocates. For the Respondents: R2, T.M. Venkata Reddy, Advocate.



Judgment Text

(Prayer: Appeal against the order dated 30.12.1996 made in Appeal No.C/195/96 by the Customs, Excise and Gold (Control) Appellate Tribunal, Southern Regional Bench at Chennai.)

1. This appeal is filed challenging the order dated 30.12.1996 made in Appeal No.C/195/96 by the Customs, Excise and Gold (Control) Appellate Tribunal, Southern Regional Bench at Chennai, by raising the following questions of law:

(a) Is the order of the Tribunal liable to be set aside as the notice of the appeal had not been served on the appellant?

(b) Does the Tribunal have the power to enhance the penalty and whether the power under Section 129B would include the power to entertain an appeal only for the purpose of enhancement of penalty imposed?

(c) Is the Commissioner of Customs who holds the same rank as Collector of Customs who was the Adjudicating Authority entitled to file an appeal against the order of the Collector of Customs and whether he could be considered as an aggrieved party within the meaning of the Act?

2.1. The facts in a nutshell are as under: A truck bearing registration No.KA-25-1254 was intercepted by the officials of the Directorate of Revenue Intelligence and 75 Silver Ingots valued at Rs.21,14,11,152/- were recovered. The driver and cleaner of the vehicle did not show any documents regarding the lawful possession of silver. Statements were recorded from them under Section 108 of the Customs Act. They have stated that Abdul Kadar and Mohamad have arranged the transportation of the silver bars. Based on the said statements Abdul Kadar was apprehended. In his statement recorded under Section 108 of the Customs Act, Abdul Kadar implicated the appellant herein.

2.2. It is the case of the appellant that no statement was recorded from him and no summons were served on him. However, by the order of adjudication dated 10.12.1993, the Collector of Customs had directed seizure of all the silver bricks and also imposed a penalty of Rs.50,000/- on the appellant.

2.3. Challenging the said order, the department filed 21 appeals before the Tribunal against various persons, including the appellant herein, who were involved in the said transaction. The Tribunal allowed the appeals filed by the Department and enhanced the penalty imposed on the appellant herein from Rs.50,000/- to Rs.5,00,000/-.

2.4. Aggrieved by the said order, the present appeal is filed.

3. We have heard Mr.Krishna Anand, learned counsel for the appellant and Mr.T.M.Venkata Reddy, learned Standing Counsel appearing for the second respondent and perused the orders passed by the Tribunal and the authorities below.

4. The learned counsel for the appellant restricted his argument only to questions of law (a) and (b).

5.1. With regard to the first question of law raised in this appeal, the main plank of the argument of the learned counsel for the appellant is that the proviso to Section 129B(2) of the Customs Act mandates that notice should be issued before an order of enhancement is passed by the Tribunal and since such a notice has not been issued in the case on hand, the order passed by the Tribunal is bad in law.

5.2. Before adverting to the merits of the first question of law raised in this appeal, it would be apposite to refer to paragraph (12) of the order passed by the Tribunal, which reads as under:

'12. We have considered the submissions of the learned DR., appeared for the respondents, except the learned counsel Sh.La Narayanan who represented the respondent Sh.Abdul Khader and the learned counsel, Shri Ravindran, who represented Syndicate Bank. Other respondents were also issued notices, but none of them appeared before the Tribunal.'

5.3. The Tribunal has recorded that though notice was issued to the respondent, he has not chosen to appear before the Tribunal. Therefore, it would not lie in the mouth of the appellant to state that no notice was issued by the Tribunal before an order of enhancement is passed.

5.4. Accordingly, the first question of law raised is answered against the appellant and in favour of the department.

6.1. On the second question of law raised in this appeal, the main thrust of the argument of the learned counsel for the appellant is that the Tribunal is not empowered to enhance the penalty under Section 129B(2) of the Act without issuing a notice in this regard.

6.2. For better appreciation of this issue, it would be relevant to reproduce Section 129B(2) of the Act, which reads as under:

'Section 129B. Orders of Appellate Tribunal.-

(1) ***

(2) The Appellate Tribunal may, at any time within six months from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1) and shall make such amendments if the mistake is brought to its notice by the Commissioner of Customs or the other party to appeal:

Provided that an amendment which has the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the other party shall not be made under this sub-section, unless the Appellate Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard.' (emphasis supplied)

6.3. In our considered opinion, the learned counsel for the appellant has misconstrued the said provision. All that Section 129B(2) of the Act contemplates is that after passing an order under Section 129B(1) of the Act, if the Tribunal, at any time within six months from the date of such order passed under Section 129B(1) of the Act, decides to rectify any mistake apparent from the record, it shall make amendment to any order passed under Section 129B(1) of the Act and shall make such amendments if the mistake is brought to its notice b

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y the Commissioner of Customs or the other party to the appeal. In such event, the proviso to Section 129B(2) of the Act mandates issuance of notice. In the case on hand, it is not rectification of mistake by the Tribunal. Therefore, proviso to Section 129-B of the Act does not apply to the facts of the present case. 6.4. In such view of the matter, the second question of law is also answered against the appellant and in favour of the department. For the foregoing reasons, we dismiss this appeal answering the questions of law against the appellant and in favour of the department. No costs. Consequently, M.P.No.2 of 2007 is closed.
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