Madras High Court
M/S. Doosan Bobcat India Pvt.Ltd vs The Commissioner Of Customs on 2 March, 2022
CMA.No. 222 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 02.03.2022
CORAM :
THE HONOURABLE MR. JUSTICE R. MAHADEVAN
and
THE HONOURABLE MR. JUSTICE J.SATHYA NARAYANA PRASAD
Civil Miscellaneous Appeal No. 222 of 2022
----
M/s. Doosan Bobcat India Pvt.Ltd.,
3rd Floor, TNPL Building
67 Mount Road, Guindy
Chennai 600 032. .. Appellant
Versus
The Commissioner of Customs
Chennai III Commissionerate
Custom House, No.60, Rajai Salai,
Chennai - 600 001 .. Respondent
Civil Miscellaneous Appeal filed under Section 130 of Customs Act,
1962 to set aside the Miscellaneous Order No.40002/ 2022 dated 24.01.2022
passed by the Customs, Excise & Service Tax Appellate Tribunal at Chennai.
For Appellant : Mr. Hari Radhakrishnan
For Respondent : Mr. M. Santhanaraman
Standing Counsel
JUDGMENT
(Judgment of the court was delivered by R.MAHADEVAN, J.)
This appeal is filed by the appellant to set aside the Order dated
24.01.2022 made in Miscellaneous Order No.40002/ 2022, in Customs Appeal
https://www.mhc.tn.gov.in/judis
CMA.No. 222 of 2022
No. 41133 of 2019-DB, passed by the Customs, Excise & Service Tax
Appellate Tribunal, Chennai.
2. According to the appellant, their company had imported excavator
machine tools, spare parts and accessories from M/s.Doosan Infracore Co.
Ltd., South Korea. The supplier being related company, the correctness of the
declared value was examined by the Special Valuation Branch. After
considering the documentary evidence, the Assistant Commissioner passed an
order-in-original No.7731/2008 dated 4.6.2008 holding that the price declared
was on par with contemporaneous imports made by unrelated buyers and
therefore concluded that the declared price was the transaction value in terms
of Rule 3(3)(a) of Customs Valuation Rules, 2007. The appellant company
also imported similar goods, which were also subjected to scrutiny and
ultimately, order-in-original dated 05.03.2010 was passed holding that the
profit margin was normal and reasonable and there was no flow back towards
royalty, licence fee or technical know-how/fee. According to the appellant,
the said order dated 05.03.2010 was valid upto 03.06.2014. However, the
Deputy Commissioner (SVB) had subjected the order dated 05.03.2010 for a
review and ultimately, an order dated 04.06.2014 in Review Order
No.26120/2014 was passed observing that the price declared was comparable
https://www.mhc.tn.gov.in/judis
CMA.No. 222 of 2022
to the value derived from NIDB. It was also observed that (i) royalty amount
of Rs.28.14 lakhs shown in the balance sheet for the year 2012-2013 was net
of taxes and therefore, not included in the declared value (ii) the amount of
Rs.98.16 lakhs and Rs.136 lakhs paid to the foreign supplier as seen from the
balance sheet for 2011-2012 and 2012-2013, but the payment did not relate to
the imported goods and payment was not a condition of sale, therefore, not
included in the declared value and (iii) an amount of Rs.26 lakhs paid to the
group company for the insurance of expat employees was not included as it did
not relate to imported goods. In effect, the Deputy Commissioner of Customs
(SVB) ordered for inclusion of Rs.8 lakhs found to have been paid towards
freight forwarding and directed to accept the declared value.
3. Aggrieved by the order passed by the Deputy Commissioner of
Customs (SVB) on 04.06.2014, the Commissioner of Customs preferred an
appeal before the Commissioner of Customs (Appeals), who, vide order dated
30.01.2015 passed an Order in Appeal C.Cus.II No.124 of 2015, setting aside
the order dated 04.06.2014 and directed the adjudicating authority to revisit
the issue and also ordered to collect extra duty deposit @ 5% equivalent of the
value of the goods.
https://www.mhc.tn.gov.in/judis
CMA.No. 222 of 2022
4. As against the order dated 30.01.2015 of the Commissioner of
Customs (Appeals), the appellant herein preferred an appeal before the
Tribunal. The Tribunal vide order No. 42209 of 2017 dated 20.09.2017,
directed the adjudicating authority to collect extra duty deposit at the rate of
1% of the value. Inspite of the order dated 20.09.2017 of the Tribunal, the
Deputy Commissioner of Customs (SVB) passed an order-in-original (de
novo) No.64397 of 2018 dated 11.07.2018 holding that the royalty amount
shown to have been paid during the financial year 2012-13, as per balance
sheet, should be added to the invoice value. Feeling aggrieved, the appellant
herein went on appeal before the Commissioner of Customs (Appeals-II), who
vide his order dated 25.04.2019 passed in Order in Appeal SEA.C.Cus II
No.338/2019, rejected the same upholding the order passed by the Deputy
Commissioner of Customs. Therefore, the appellant filed further appeal before
the Tribunal along with an application seeking stay of recovery of the demand,
besides filing an application for fixing an early date for final hearing of the
appeal. The application for early hearing was allowed on 30.01.2020 and
thereby the appeal itself was directed to be taken up for final disposal on
11.03.2020. In view of the fixing of date for final hearing of the appeal, the
appellant's counsel did not press the stay application and accordingly, the
application for stay was dismissed as withdrawn. But, owing to the pandemic
https://www.mhc.tn.gov.in/judis
CMA.No. 222 of 2022
situation, the appeal could not be taken up for final hearing on the date fixed,
which compelled the appellant to file an application for restoration of the stay
application before the Tribunal. By order dated 24.01.2022 made in
Misc.Order No.40002 of 2022, the Tribunal dismissed the application filed by
the appellant for restoration of the stay application. It is this order dated
24.01.2022 which is subjected to challenge in this appeal.
5. This Civil Miscellaneous Appeal is filed by raising the following
substantial questions of law for consideration;
(i) Whether the Tribunal has failed to exercise
jurisdiction by refusing to stay the operation of the
impugned order-in-appeal C.Cus.II No.338/2019 dated
25.04.2019, which has confirmed the order-in-original
(denovo) No.64397/2018 dated 11.07.2018 passed by the
original adjudicating authority?
(ii) Whether the Tribunal is empowered in terms of
Rule 41 of the Customs, Excise and Service Tax Appellate
Tribunal (Procedure) Rules, 1982 to stay the operation of
the impugned order-in-appeal C.Cus.II No.338/2019 dated
25.04.2019, which has confirmed the order-in-original
(denovo) no.64397 / 2018 dated 11.07.2018 passed by the
original adjudicating authority?'
6. The learned counsel for the appellant submitted that when the stay
application came up for hearing before the Tribunal, the Tribunal fixed
11.03.2020 as the date for final hearing of the appeal. However, the appeal
could not be listed on 11.03.2020 due to absence of required coram and
https://www.mhc.tn.gov.in/judis
CMA.No. 222 of 2022
prevalence of covid-19 pandemic situation. Even after lapse of two years and
despite repeated reminders made to the Registry of the tribunal, the appeal was
not taken up for final hearing. While so, the Proper Officer of Customs
attempted to implement the order-in-original (denovo) No.64397/2018 dated
11.07.2018, which was confirmed by the first appellate authority vide order in
appeal C.Cus.II No.338/2019 dated 25.04.2019, despite the fact that the
Tribunal was ceased of the appeal filed against the said order. Since the
Tribunal had specifically fixed a date of final hearing but the appeal could not
be taken up for final hearing for quite some time, the appellant filed the
petition for restoration of stay. According to the counsel for the appellant,
Rule 41 of the Customs, Excise and Service Tax Appellate Tribunal
(Procedure) Rules, 1982 empowers the Tribunal to pass any such order as may
be necessary or expedient to give effect to or in relation to its orders or to
prevent abuse of process or to secure the ends of justice. Thus, the Tribunal is
very well empowered to stay the operation of the impugned order pending
disposal of the appeal to secure the ends of justice, instead, the Tribunal
dismissed the application for restoration of the stay application. Therefore, the
learned counsel for the appellant prayed for allowing the Civil Miscellaneous
Appeal.
https://www.mhc.tn.gov.in/judis
CMA.No. 222 of 2022
7. The learned counsel appearing for the respondent submitted that
the stay application was dismissed on the ground that application for fixing an
early date was allowed and in view of the same, the counsel for the appellant
did not press the stay petition. In the meantime, the appellant was importing
further goods and continue to give bank guarantee. He would further submit
that the appellant has already given up its right for obtaining stay by not
pressing the stay application, therefore, they cannot seek for restoration of the
stay petition and thus he prayed for dismissal of this appeal.
8. Heard the learned counsel appearing on either side and perused
the materials placed before this Court.
9. On perusal of the materials made available, it is evident that the
appellant has filed an appeal before the Tribunal, as against the order dated
25.04.2019 passed by the Commissioner of Customs (Appeals-II) in Order in
Appeal SEA.C.Cus II No.338/2019. Pending appeal, the appellant filed two
applications, one for grant of interim stay and another for fixing a date for
final hearing of the appeal. The Tribunal fixed 11.03.2020 as the date for final
hearing of the appeal and therefore, the appellant withdrew the application for
grant of interim stay. However, it is stated that due to want of coram and
https://www.mhc.tn.gov.in/judis
CMA.No. 222 of 2022
prevalence of Covid-19 Pandemic situation, the appeal could not be taken up
for hearing on the date fixed by the Tribunal. In such circumstances, the
appellant has filed the instant application for restoration of the application for
interim stay by stating that the department is attempting to implement the
order-in-original (denovo) No.64397/2018 dated 11.07.2018 passed by the
Deputy Commissioner of Customs, which was confirmed by the first appellate
authority on 25.04.2019, notwithstanding the fact that the order dated
25.04.2019 is the subject matter of appeal pending before the Tribunal. The
application for restoration of the stay application filed by the appellant was
rejected by the Tribunal on 24.01.2022, which has prompted the appellant to
approach this Court with this appeal.
10. It is evident that the appeal filed by the appellant is pending for
quite some time and during the pendency of the appeal, it is contended that the
Department is seeking to implement the order passed by the original authority.
It is also seen that the appellant withdrew the application for interim stay when
the Tribunal fixed a date for final hearing of the appeal. Having regard to the
above facts, as agreed by the counsel for both sides, in order to give a quietus,
this Court issues the following directions:-
https://www.mhc.tn.gov.in/judis
CMA.No. 222 of 2022
(i) The respondent shall not make any recovery from the appellant till
the disposal of the appeal pending before the Tribunal.
(ii) The questions of law raised in this appeal are left open to be
adjudicated between the parties in a separate proceedings.
(iii) Since the issue pertains to collection of extra duty deposit relating
to the year 2010-2013, the Customs, Excise & Service Tax Appellate Tribunal
at Chennai is directed to dispose of the appeal filed by the appellant, within a
period of four months from the date of receipt of a copy of this Judgment.
11. With the above directions, this Civil Miscellaneous Appeal is
disposed of. No costs. Connected C.M.P. Nos. 1527 & 1526 of 2022 are
closed.
(R.M.D.,J.) (J.S.N.P.,J.)
02.03.2022
Index:Yes/no
Internet:Yes/no
msr/rsh
To
The Commissioner of Customs,
Chennai III Commissionerate,
Custom House, No.60, Rajai Salai,
Chennai - 600 001.
https://www.mhc.tn.gov.in/judis
CMA.No. 222 of 2022
R. MAHADEVAN, J
and
J. SATHYA NARAYANA PRASAD, J
msr/rsh
CMA No. 222 of 2022
02.03.2022
https://www.mhc.tn.gov.in/judis
