Madras High Court
The Principal Commissioner Of ... vs Shri Mohammed Ali Jinnah on 9 September, 2021
C.M.A.No.1911 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Date : 09.09.2021
CORAM:
THE HON'BLE MR. JUSTICE T.S. SIVAGNANAM
AND
THE HON'BLE MR.JUSTICE SATHI KUMAR SUKUMARA KURUP
C.M.A.No.1911 of 2021
and
C.M.P.No.10351 of 2021
The Principal Commissioner of Customs,
Chennai-III Commissionerate,
Custom House, No.60, Rajaji Salai,
Chennai - 600 001. ... Appellant
Vs.
Shri Mohammed Ali Jinnah ... Respondent
PRAYER: Appeal filed under Section 130 of Customs Act, 1962 praying to
set aside the Miscellaneous Order No.40028 of 2021 dated 03.03.2021
passed by the Customs, Excise & Service Tax Appellate Tribunal, South
Zonal Bench, Chennai.
For Appellant : Mr.V.Sundareswaran
Senior Standing Counsel
For Respondent : Mr.B.Kumar, Senior Counsel
For Mr.B.Shruthan
1/8
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C.M.A.No.1911 of 2021
JUDGMENT
This appeal has been filed by the Revenue under Section 130 of the
Customs Act, 1962 (hereinafter 'the Act' for brevity) challenging the order
dated 03.03.2021 in Miscellaneous Order No.40028 of 2021 on the file of the
Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench,
Chennai (hereinafter referred to as 'the Tribunal').
2.The Revenue has raised the following substantial questions of law for
consideration.
"(a) The order of the tribunal is perverse and contrary to the
factual finding and of admitted facts by the adjudicating
authority
(b) Whether the tribunal erred in dismissing the stay
application pending appeal on the erroneous assumption that
granting prayer in Miscellaneous Application pending Appeal,
would amount to allowing the appeal itself.
(c) Whether the Tribunal was correct in not considering the
"twin test" laid down by the Apex Court and this Hon'ble Court
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C.M.A.No.1911 of 2021
in catena of cases while disposing of the Miscellaneous
Application for stay pending appeal before it.
(d) Whether the Tribunal ignored the law that unless the order
of the First Appellate Authority in Order-in-Appeal
No.550/2019 dated 14/11/2019 is stayed, pending the appeal
before it, the "smuggled absolutely confiscated gold" had to be
released which would be prejudicial to the interest of revenue.
(e) The Tribunal being an quasi-judicial authority under the
Customs Act, 1962 is also duty bound to protect the interest of
the revenue while passing orders in the applications pending
before it.
(f) Whether the Tribunal commenced an grievous error in not
appreciating the difference between the appeal and
miscellaneous application filed pending the appeal."
3. We have heard Mr.V.Sundareswaran, learned Senior Standing
Counsel for the appellant Revenue and Mr.B.Kumar, learned Senior Counsel
appearing for Mr.B.Shruthan, learned counsel for the respondent.
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C.M.A.No.1911 of 2021
4. The appellant Revenue filed the appeal before the Tribunal
challenging the order passed by the Commissioner of Customs (Appeals-II),
Chennai dated 14.11.2019. In an appeal filed by the respondent challenging
the Order-in-Original dated 10.09.2018, by the said Order-in-Original, the
Additional Commissioner of Customs, Chennai-III directed confiscation of
the foreign origin gold bars weighing 3.097 kg valued at Rs.91,98,090/- under
Sections 111(a), 111(d) and 111(i) of the Act, apart from confiscation of the
packing materials, imposition of penalty, the first Appellate Authority allowed
the appeal by order dated 14.11.2019 and set aside the order of confiscation
and imposition of penalty. The Revenue being aggrieved by such order,
preferred appeal before the Tribunal and since the appeal filed by the
respondent was allowed by the first Appellate Authority, the first Appellate
Authority order has been challenged by the appellant Revenue. In the stay
petition, the Revenue contended that the first Appellate Authority has ignored
the evidences, available on record which would clearly go to sustain the order
of confiscation and the first Appellate Authority committed a serious error
with regard to the legal issue relating to the burden of proof in respect of the
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C.M.A.No.1911 of 2021
seized gold bar under Section 123 of the Act and in spite of detailed
memorandum having been presented on all these issues, the first Appellate
Authority has ignored the same. The Tribunal by impugned order has
dismissed the stay petition stating that the arguments of the Revenue are
touching upon the merits of the case and the Tribunal finds that no prima
faice case has been made out by the Revenue.
5. When this appeal was entertained, the Division Bench by order
dated 16.07.2021 had granted an order of interim stay. Admittedly, the
Revenue is entitled to question the correctness of the First Appellate
Authority by filing an appeal before the Tribunal. The Tribunal, while
considering the prayer for interim stay, has to consider as to whether the
balance of convenience is in favour of the Revenue, whether the Revenue has
made out a prima faice case for grant of stay and whether irreparable
hardship would be caused to the Revenue if the stay is not granted. To
consider as to whether prima faice case has been made out by the Revenue, it
may be necessary to have a consideration of the facts of the case and the
merits of the appeal though not to the extent of deciding the appeal itself.
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C.M.A.No.1911 of 2021
With regard to the balance of convenience, the Tribunal has to examine the
aspect that if stay is not granted what would be the consequence that will
follow and with regard to hardship, that would be caused by the Revenue has
also to be considered.
6. In our considered view, if the stay is not granted, then, the
respondent would seek return of the seized gold and that has to be ordered,
then the appeal filed before the Tribunal itself would become infructuous.
Therefore, we are of the definite view that the undue hardship would also be
viewed from the point of view of the Revenue and to protect the interest of
the Revenue. Therefore, we are of the view that the order passed by the first
Appellate Authority dated 14.11.2019 shall remain stayed till the disposal of
the appeal filed by the Revenue before the Tribunal. We are informed that the
appeal is listed for hearing on 22.09.2021 and the Tribunal may consider to
dispose of the appeal at the earliest.
7. For the above reasons, the appeal is allowed and the order passed by
the Tribunal dated 03.03.2021 is set aside and there will be an order of stay
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C.M.A.No.1911 of 2021
of the order passed by the first Appellate Authority dated 14.11.2019 till the
disposal of the appeal by the Tribunal. The Tribunal is requested to consider
whether the appeal could be disposed of at the earliest. As we have allowed
the appeal and set aside the order passed by the Tribunal dated 03.03.2021, it
goes without saying the observations contained therein have also been set
aside and the main appeal shall be decided by the Tribunal on merits and in
accordance with law.
(T.S.S., J.) (S.S.K., J.)
09.09.2021
Index : Yes / No
Internet : Yes
Speaking Order : Yes/No
Sgl
To
The Customs, Excise & Service Tax
Appellate Tribunal,
South Zonal Bench, Chennai.
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C.M.A.No.1911 of 2021
T.S. SIVAGNANAM, J.
and
SATHI KUMAR SUKUMARA KURUP, J.
Sgl
C.M.A.No.1911 of 2021
09.09.2021
https://www.mhc.tn.gov.in/judis/
