Bombay High Court
Ingram Micro India Pvt.Ltd vs The Union Of India And Anr on 17 November, 2022
Bench: K.R. Sriram, Shri Arif Doctor
Digitally signed
by GAURI
GAURI AMIT
GAEKWAD
AMIT Date:
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GAEKWAD 2022.11.21
11:21:43
+0530 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.3616 OF 2021
WITH
WRIT PETITION NO.790 OF 2022
Ingram Micro India Private Limited .....Petitioner
Vs.
The Union of India and Anr. .....Respondents
----
Mr. Sriram Sridharan for petitioner in both petitions.
Mr. J.B. Mishra a/w. Mr. Satyaprakash Sharma for respondents.
----
CORAM : K. R. SHRIRAM &
A. S. DOCTOR, JJ.
DATED : 17th NOVEMBER 2022
P.C. :
1 Since both petitions involve the same issue, they are being
disposed by this common order.
WRIT PETITION NO.3616 of 2021
2 Via three refund applications dated 22 nd May 2020, petitioner
had applied to respondents seeking refund of the following :
Sr. Details of Bill of Entry Details of Challan discharging Customs
No. Customs Duty Duty (in
INR)
1 7153254 dated 07.03.2020 2030573712 dated 16.03.2020 17,42,830
2 7249973 dated 16.03.2020 2030659662 dated 28.03.2020 15,15,711
3 7306536 dated 19.03.2020 2030713167 dated 28.03.2020 35,06,384
Total 67,64,925
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3 Vide three impugned orders, all dated 17 th February 2021,
respondents have allowed the refunds of petitioner on merits. However,
instead of disbursing the same to petitioner, respondents have suo-moto
adjusted the said refunds against a demand confirmed against petitioner
vide Order-in-Original dated 28th November 2014.
WRIT PETITION NO.790 OF 2022
4 Via two refund applications dated 25th August 2021, petitioner
had applied to respondents seeking refund of the following :
Sr. Details of Bill of Entry Details of Challan discharging Customs
No. Customs Duty Duty (in
INR)
1 4681007 dated 14.07.2021 2035642398 dated 15.07.2021 54,79,692
2 4679815 dated 14.07.2021 2035642195 dated 15.07.2021 5,79,274
Total 60,58,966
5 Vide two impugned orders, both dated 31st December 2021,
respondents have allowed the refunds of petitioner on merits. However,
instead of disbursing the same to petitioner, respondents here again have
suo-moto adjusted the said refunds against the demand confirmed against
petitioner vide Order-in-Original dated 28th November 2014.
6 Vide the Order-in-Original dated 28th November 2014,
respondents had confirmed a duty demand of Rs.5,23,16,494/- with
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interest, and imposed penalty of Rs.5,23,16,494/-. The Order-in-Original
dated 28th November 2014 was passed confirming the demand proposed by
a Show Cause Notice dated 5th June 2013. Even prior to the issuance of the
said Show Cause Notice, during the investigation proceedings being carried
out by respondents, petitioner had paid towards duty under protest an
amount of Rs.4,78,67,608/- of which the details are as below :
Sr. No. Port Details of Challan Amount Paid (in INR)
1 Delhi 440014 dated 19.12.12 1,52,61,152
2 Chennai 0052 dated 01.12.12 1,71,51,833
3 Mumbai M-252 dated 22.11.12 1,54,54,623
Total 4,78,67,608
7 Thereafter, petitioner filed Appeal No.C/85678/15 before the
CESTAT challenging the Order-in-Original dated 28th November 2014. This
appeal was filed after the enactment of the Finance Act, 2014 which
substituted Section 129E of the Customs Act, 1962. Vide the substituted
Section 129E, an appeal to the CESTAT could only be entertained if the
appellant deposited 7.5% of the duty under dispute. Vide paragraph 4.2 of
Circular No.984/8/2014-CX dated 16th September 2014, the CBEC provided
that there would be no recovery of the balance amount, i.e., the amount in
excess of the 7.5% of the duty deposited in terms of Section 129E till the
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disposal of the appeal by the Tribunal. Further, vide paragraph 3.1 of the
same Circular, it was stated that any payments made during investigation
proceedings can be considered towards the pre-deposit mandate imposed
by Section 129E of the Customs Act. Since appellant (petitioner) had
already paid Rs.4,78,67,608/- (well in excess of 7.5% of the total demand
of Rs.5,23,16,494/- imposed vide Order-in-Original dated 28 th November
2014) during the investigation proceedings, no separate stay application
was filed by petitioner. The balance demand of duty, penalty, and interest
stood automatically stayed in terms of Section 129E and the circular dated
16th September 2014.
8 The proceedings in the said Appeal No.C/85678/15 were the
subject matter in dispute in Writ Petition No.475 of 2020 which was
decided on 9th November 2022. The order dated 9 th November 2022 reads
as under :
1. By consent, petition is taken up for final hearing at the
admission stage itself.
2. Petitioner has impugned an order dated 26 th August 2019
passed by the Customs, Excise and Service Tax Appellate
Tribunal, Mumbai (WZB) (CESTAT) rejecting petitioner's
application to recall its order dated 4 th October 2016. This order
dated 4th October 2016 (the said order) came to be passed in
Appeal No.C/85678 of 2015 filed by petitioner against an order
dated 28th November 2014 passed by Commissioner of Customs
(Import), ACC Mumbai. This order dated 4 th October 2016 of
CESTAT was a common order passed in appeals filed by four
parties including petitioner herein. The challenge in the appeal
was to the classification and consequent rate of duty adopted by
the Assessing Officer.
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3. Against the said order dated 4th October 2016, petitioner had
preferred an appeal under Section 130E of the Customs Act,
1962 before the Apex Court. After the appeal was filed in the
Apex Court, the other three parties whose appeals were listed
alongwith petitioner's appeal, viz., M/s. Fortune Marketing
Private Limited and other appellants filed a rectification of
mistake application before CESTAT for rectifying the common
order dated 4th October 2016. The rectification application was
filed on the ground that CESTAT had not considered in the said
order dated 4th October 2016, clarification that was issued by the
Department of Electronics and Information Technology,
Government of India though produced before CESTAT as also
other materials like orders of first Appellate Authority on the
same issue for subsequent periods. This rectification application
of the other three parties was allowed by CESTAT on
13th December 2016 and the final order dated 4 th October 2016
with respect to the said three applicants came to be recalled and
the appeals were directed to be relisted for fresh hearing.
Petitioner naturally was not a beneficiary of this order.
4. Subsequent to this development, petitioner filed an
application before the Apex Court for bringing on record the
rectification of mistake order dated 13th December 2016 passed
by CESTAT. Subsequently, the registry of the Apex Court also
prepared an office report confirming the filing of this
application. Petitioner had decided to file a rectification
application to CESTAT. Hence, on 3 rd March 2017 petitioner
sought leave of the Apex Court to withdraw the appeal that it
had preferred under Section 130E of the Customs Act, 1962. The
Apex Court granted leave and civil appeal was dismissed as
withdrawn.
5. Subsequent to this, petitioner filed an application before
CESTAT for rectification of mistake. The said application came to
be dismissed by an order dated 26 th August 2019 which is
impugned in this petition. According to CESTAT, by filing the
appeal before the Apex Court petitioner has exhausted its
remedy and withdrawal of the appeal subsequent to invoking the
jurisdiction of the Apex Court to avail of a provision in law
encoded for rectification of a mistake without express leave of
the Court to do so was not permissible and, therefore, the
application came to be dismissed.
6. Heard the counsels.
The order dated 4th October 2016 is a common order and if the
application of three other applicants/appellants is allowed on the
ground that certain documents placed on record have not been
considered and those are not party specific documents, certainly
that benefit, in our view, should also be extended to petitioner in
this case.
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7. Another point is CESTAT, after hearing those appeals and
considering the Government of India notification, has allowed
those appeals in favour of other three parties. CESTAT took up
the appeal filed by Fortune Marketing Pvt. Ltd. for final hearing
(post the recall of the order dated 4 th October 2016) and passed
final order dated 4th April 2017 allowing the appeals and
deciding the issue in favour of Fortune Marketing Pvt. Ltd. The
appeal filed by respondent no.2 before this Court against the
final order dated 4th April 2017 in Fortune Marketing Pvt. Ltd.
was dismissed on maintainability vide order dated
19th September 2018.
Before seeking leave of the Apex Court to withdraw the appeal,
petitioner had filed in the Apex Court an application to bring on
record the order passed by CESTAT on the rectification
application filed by Fortune Marketing Pvt. Ltd. and others
allowing the same. This is evident from the Apex Court's office
report dated 2nd March 2017 in respect of petitioner's case.
8. We have considered the order of the Apex Court where
ofcourse there is no specific express leave being granted. Mr.
Mishra submitted that there are plethora of judgments discussing
the doctrine of merger because having filed the appeal under
Section 130E of the Customs Act, 1962, the order allowing
withdrawal of the appeal would mean that the said order has
merged with the order passed by CESTAT. Therefore, CESTAT
was correct in rejecting the application. Mr. Sridharan submitted
otherwise and relied upon various judgments including a
judgment of the Apex Court in State of Kerala and Anr. V/s.
Kondottyparambanmoosa and Ors.
9. Per contra, Mr. Mishra relied upon a judgment of the Apex
Court in Omprakash Verma and Ors. V/s. State of Andhra
Pradesh and Ors. to submit that doctrine of merger was
applicable and he bought to the attention of the Court paragraph
73 and 74 of the said judgment. In our view, this judgment is not
applicable in as much as in Omprakash Verma (supra), the Apex
Court has observed that once the appeal of the State has been
allowed, the net result would be that the High Court's judgment
which held that the proceedings under the ULC Act were
vitiated, stood merged in the decision of the Apex Court in State
of A.P. V/s. N. Audikesava Reddy.
In the case at hand (a) it is a statutory appeal and (b) no leave
was granted or any order of admission was passed.
10. Mr. Mishra also relied upon judgment of the Apex Court in
Pernod Ricard India Pvt. Ltd. V/s. Commissioner of Customs. In
the said judgment, the Apex Court has held that once a statutory
right of appeal is invoked, dismissal of appeal by the Supreme
Court, whether by a speaking order or non speaking order, the
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doctrine of merger does apply.
Again this judgment is not applicable in as much as in the case at
hand, there was no order of dismissal of the statutory appeal.
Petitioner wanted to withdraw the appeal and permission to
withdraw the appeal was simplicitor granted.
11. Mr. Mishra also relied upon a judgment of the Apex Court in
Sarguja Transport Service V/s. State Transport Appellate
Tribunal, M.P. Gwalior and Ors. Mr. Mishra submitted that in that
case petitioner had withdrawn the petition from the High Court
simplicitor and the Apex Court held that a fresh petition was not
maintainable.
Again this judgment is not applicable to the facts of the case at
hand because (a) that was a writ petition and not a statutory
appeal and (b) there the Court held that it was not maintainable
on the grounds of res judicata. Court held, Res judicata would
affect petitioner's remedy under Article 226 of the Constitution
of India and may not bar other remedies.
12. Having heard the counsels, in the interest of justice, we are
inclined to allow the petition and direct CESTAT to consider
petitioner's rectification application. Reasons for us to arrive at
this conclusion are as under :
(a) the order dated 4th October 2016 has been a common order
in which four appellants were heard including petitioner;
(b) rectification application of the remaining three appellants
has been allowed;
(c) the reason for allowing the rectification application to those
appellants is because CESTAT accepted that it had not considered
the clarification issued by the Department of Electronics and
Information Technology, Government of India though it was
produced before CESTAT. Paragraph 3.1 of the said order dated
13th December 2016 allowing rectification application reads as
under :
3.1. On careful consideration of the submissions made by
both sides and perusal of our final order dated
04.10.2016, it is noticed that the clarification issued by
Department of Electronics and Information Technology,
GOI though produced before us escaped our attention
while recording the order as also other materials like
orders of first appellate authority on the same issue for for
subsequent periods. The said clarification of the
Department of Electronics and Information Technology,
GOI and other materials may throw some light as to the
classification of the products in question. We have also
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noticed that both sides have not argued on these points
elaborately during the proceedings hence it may have
escaped our attention. As to the power of Tribunal to
recall order once passed, Full Bench of Hon'ble High Court
of Delhi in the case of Lachmandas Bhatia Hingwala vs.
Asst. Commissioner of Income Tax - 2011 (121) DRJ 451,
ruled that Tribunal has power to recall its order if some
facts are not considered.
(d) subsequently the appeals by Fortune Marketing Pvt. Ltd. and
two others (three appeals) have been allowed by CESTAT. Only
petitioner is left out.
(e) the orders passed in the rectification applications by CESTAT
were also filed by petitioner in the Apex Court.
(f) the doctrine of merger, in our opinion, would not apply in
this case. This is because the Apex Court while permitting leave
to withdraw the appeal has not passed any order on merits. The
appeal had not even been admitted. The order of the Apex Court
is also not an order rejecting the appeal and, therefore, the said
order cannot be said to be an order of affirmance of the order of
CESTAT. That being the position, in our view, the doctrine of
merger cannot be applied to the facts and circumstances of this
case.
(g) gross injustice would be caused to petitioner if this petition is
not allowed.
13. In the circumstances, we set aside the impugned order dated
26th August 2019 and direct CESTAT to consider petitioner's
appeal on merits once again. The Appeal No.C/85678 of 2015 be
heard and disposed preferably within twelve weeks.
14. Petition disposed.
9 Since the Appeal No.C/85678/15 of petitioner has been
restored to the CESTAT, no recovery in excess of 7.5% of the duty in dispute
can be made by respondents.
10 Hence, we quash and set aside the three impugned orders
dated 17th February 2021 and the two orders dated 31st December 2021
insofar as they appropriate the refunds of petitioner against the demand
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imposed by Order-in-Original dated 28th November 2014. Consequentially,
respondents are directed to refund Rs.67,64,925/- and Rs.60,58,966/-,
together with applicable interest, within eight weeks from the date of
uploading of the order.
11 Both petitions disposed. No order as to costs.
(A. S. DOCTOR, J.) (K. R. SHRIRAM, J.)
Gauri Gaekwad
