REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7696 OF 2012
(Arising out of SLP (C ) No. 4356 of 2011)
M/s Thakker Shipping P. Ltd. ….
Appellant
Versus
Commissioner of Customs (General)
….Respondent
JUDGMENT
R.M. Lodha, J.
Leave granted.
2. The High Court answered in the affirmative the following
question:
“Whether the CESTAT has discretionary power under
Section 129A (5) of the Customs Act, 1962 to condone
the delay caused in filing the appeal under Section
129D(3) [sic, 129D(4)] of the said Act, when there was
sufficient cause available to appellant for not filing
it within the prescribed period before the Appellate
Authority”.
3. The facts leading to the present appeal are these. A
container was intercepted by M & P Wing of Commissioner of Customs
(Preventive), Mumbai on 11.01.2001. It was found to contain
assorted electrical and electronic goods of foreign origin. The
said goods were imported by M/s Qureshi International and the
cargo was cleared from Nhava Sheva. The clearance of the goods was
handled by M/s Thakker Shipping P. Ltd., the appellant, referred
to as the Custom House Agent (‘CHA’ for short). On physical
verification, the value of seized cargo was estimated at Rs.
77,10,000/- as local market value as against the declared value of
Rs. 10,03,690/-. The importer could not be interrogated. On
search of premises of CHA, the books relating to import export
clearance were not found for verification. In the statement of
Vijay Thakker, proprietor of the CHA, recorded under Section 108
of the Customs Act, 1962 (for short, ‘the Act’), he accepted that
he attended the import clearance work and introduced the importer
to the overseas suppliers and bankers for financial assistance;
the bill of entry for the clearance of subject goods had been
filed without proper description and correct value and he failed to
inform the Customs Officers about the subject goods, despite having
attended the examination of 5% goods prior to the clearance.
Accordingly, the inquiry officer recorded his findings.
4. Initially, the appellant’s CHA licence was placed under
suspension pending inquiry under Regulation 23 of Custom House
Agent Licencing Regulations, 2004 but the suspension order was
set aside by the Customs, Excise and Service Tax Appellate Tribunal
(for short, ‘Tribunal’) and CHA licence was restored. The inquiry
under Regulation 23, however, proceeded against the CHA on diverse
charges. The Commissioner of Customs (General) Mumbai by his
order in original dated 21.07.2004 dropped the proceedings under
Regulation 23 by rejecting the findings of the inquiry officer.
5. The Committee of Chief Commissioners of Customs (for short,
‘the Committee’) constituted under sub section (1B) of Section
129A of the Act called for and examined the records of the
proceedings leading to order in original dated 21.07.2004 passed by
the Commissioner of Customs (General) Mumbai (for short, ‘the
Commissioner’) for satisfying itself as to the legality and
propriety of the said order. The Committee on consideration of
the entire matter directed the Commissioner to apply to the
Tribunal for determination of the following points, namely; (1)
whether taking into consideration the facts and circumstances
noticed in the order, the order of the Commissioner was legally
correct and proper; and (2) whether by an order under Section
129B of the Act, the Tribunal should set aside the order of the
Commissioner dropping the proceedings against the CHA.
6. The Commissioner, accordingly, made an application under
Section 129D(4) of the Act before the Tribunal. As the said
application could not be made within the prescribed period and was
delayed by 10 days, an application for condonation of delay was
filed with a prayer for condonation. The Tribunal on 28.11.2005,
however, rejected the application for condonation of delay and
consequently dismissed the appeal by the following brief order:
“This appeal has been filed by the applicant Commissioner
in pursuance of Order of Review passed by a Committee of
Chief Commissioners. In the application for condonation of
delay filed by the applicant Commissioner, a prayer has
been made for condoning delay of 10 days. In the case of
CCEx. Mumbai vs. Azo Dye Chem-2000 (120) ELT 201 (Tri-LB),
Larger Bench of the Tribunal has held that the Tribunal
has no power to condone the delay caused in filing such
appeals by the Department beyond the prescribed period of
three months. Even though the said decision was in a
central Excise case, the ratio of this decision is equally
applicable to Customs cases since the legal provisions
under both the enactments are similar.
2. Accordingly, following the ratio of Azo Dye Chem
(Supra), we have no option but to reject the application
for condonation of delay. We order accordingly and
consequently, the appeal also stands dismissed”.
7. This appeal raises the question, whether it is competent
for the Tribunal to invoke Section 129A(5) of the Act where an
application under Section 129D(4) has not been made by the
Commissioner within the prescribed time and condone the delay in
making such application if it is satisfied that there was
sufficient cause for not presenting it within that period.
8. Learned counsel for the appellant submitted that Section
129D(4) of the Act was self contained and if the application
contemplated therein was not made within the prescribed period, the
Tribunal has no power or competence to condone the delay after
expiry of the prescribed period. In support of his arguments he
relied upon a larger Bench decision of the Customs, Excise and Gold
(Control) Appellate Tribunal (‘CEGAT’) in Commissioner of Central
Excise v. Azo Dye Chem[1]. He also placed heavy reliance upon a
three-Judge Bench decision of this Court in Commissioner of Customs
and Central Excise v. Hongo India Pvt. Ltd. and Another[2]. Learned
counsel for the appellant also placed reliance upon decisions of
this Court in Delhi Cloth and General Mills Co. Ltd. v. State of
Rajasthan and Ors.[3], Fairgrowth Investments Ltd. v. Custodian[4]
and UCO Bank and Anr. v. Rajinder Lal Capoor.[5]
9. On the other hand, Mr. R.P. Bhatt, learned
senior counsel for the respondent, supported the view of the High
Court in passing the impugned order. He submitted that the answer
to the question under consideration was dependent on construction
of Sections 129D and 129A of the Act.
10. Section 129D (omitting the parts not relevant) reads:
“S.129D. -Power of Committee of Chief Commissioners of
Customs or Commissioner of Customs to pass certain orders.
– (1) The Committee of Chief Commissioners of Customs may,
of its own motion, call for and examine the record of any
proceeding in which a Commissioner of Customs as an
adjudicating authority has passed any decision or order
under this Act for the purpose of satisfying itself as to
the legality or propriety of any such decision or order and
may, by order, direct such Commissioner ... to apply to the
Appellate Tribunal … for the determination of such
points arising out of the decision or order as may be
specified by the Committee of Chief Commissioners of
Customs in its order;
… ……………………………………………………………………..
. ….. ……………………………………………………………
. The Committee of Chief Commissioners of Customs … shall make
order under sub-section (1) …. within a period of three months from
the date of communication of the decision or order of the
adjudicating authority;
. Where in pursuance of an order under sub-section (1) ….
Commissioner of Customs makes an application to the Appellate
Tribunal …. within three months from the date of communication of
the order under sub-section (1) …. such application shall be heard
by the Appellate Tribunal …. as if such applications were an
appeal made against the decision or order of the adjudicating
authority and the provisions of this Act regarding appeals,
including the provisions of sub-section (4) of Section 129A shall,
so far as may be, apply to such application.
. …………………………………………………………………”
We may clarify that sub-sections (3) and (4) of Section 129D have
been amended from time to time. What has been reproduced above are
the provisions existing at the relevant time.
11. Section 129A (omitting the parts not relevant)
reads:
“S.129. - Appellate Tribunal. –
(1) ………………………………………………………………..
(2) …………………………………………………………..
(3) Every appeal under this section shall be filed within
three months from the date on which the order sought to be
appealed against is communicated to the Commissioner of
Customs, or as the case may be, the other party preferring
the appeal.
(4)On receipt of notice that an appeal has been preferred
under this section, the party against whom the appeal has
been preferred may, notwithstanding that he may not have
appealed against such order or any part thereof, file,
within forty-five days of the receipt of the notice, a
memorandum of cross-objections verified in such manner as
may be specified by rules made in this behalf against any
part of the order appealed against and such memorandum
shall be disposed of by the Appellate Tribunal as if it
were an appeal presented within the time specified in sub-
section (3).
(5) The Appellate Tribunal may admit an appeal or permit
the filing of a memorandum of cross-objections after expiry
of the relevant period referred to in sub-section (3) or
sub-section (4), if it is satisfied that there was
sufficient cause for not presenting it within that period”.
12. Section 129D(4) makes it clear that where an application is
made by the Commissioner to the Tribunal in pursuance of an order
under sub-section (1) within a prescribed period from the date of
communication of that order, such application shall be heard by the
Tribunal as if it was an appeal made against the decision or order
of the adjudicating authority and the provisions regarding appeals
under Section 129A to the Tribunal, in so far as they are
applicable, would be applicable to such application. The crucial
words and expressions in Section 129D(4) are, “such application”,
“heard”, “as if such application were an appeal” and “so far as may
be”. The expression “such application”, inter alia, is referable
to the application made by the Commissioner to the Tribunal in
pursuance of an order under sub-section (1) of Section 129D. The
period prescribed in Section 129D for making application does not
control the expression “such application”. It is difficult to
understand how an application made under Section 129D(4) pursuant to
the order passed under sub-sections (1) or (2) shall cease to be
“such application” merely because it has not been made within
prescribed time. If the construction to the words “such
application” is given to mean an application filed by the
Commissioner before the Tribunal within the prescribed period only,
the subsequent expressions “heard”, “as if such an application were
an appeal’” and “so far as may be” occurring in Section 129D(4) of
the Act may be rendered ineffective. The view of the larger Bench
of the CEGAT in Azo Dye Chem1 and the reasons in support thereof
do not commend to us. We are unable to accept the view adumbrated
by the CEGAT. The clear and unambiguous provision in Section
129D(4) that the application made therein shall be heard by the
Tribunal as if it was an appeal made against the decision or order
of the adjudicating authority and the provisions of the Act
regarding appeals, so far as may be, shall apply to such
application leaves no manner of doubt that the provisions of Section
129A (1) to (7) have been mutatis mutandis made applicable, with
due alteration wherever necessary, to the applications under
Section 129D(4).
13. From the plain language of Section 129D(4), it is clear
that Section 129A has been incorporated in Section 129D. For the
sake of brevity, instead of repeating what has been provided in
Section 129A as regards the appeals to the Tribunal, it has been
provided that the applications made by the Commissioner under
Section 129D(4) shall be heard as if they were appeals made against
the decision or order of the adjudicating authority and the
provisions relating to the appeals to the Tribunal shall be
applicable in so far as they may be applicable. Consequentially,
Section 129A(5) has become integral part of Section 129D(4) of the
Act. In other words, if the Tribunal is satisfied that there was
sufficient cause for not presenting the application under Section
129D(4) within prescribed period, it may condone the delay in
making such application and hear the same.
14. Parliament intended entire Section 129A, as far as
applicable, to be supplemental to Section 129D(4) and that is why
it provided that the provisions relating to the appeals to the
Tribunal shall be applicable to the applications made under Section
129D(4). The expression, “including the provisions of sub-section
(4) of Section 129A” is by way of clarification and has been so
said expressly to remove any doubt about the applicability of the
provision relating to cross objections to the applications made
under Section 129D(4) or else it may be said that provisions
relating to appeals to the Tribunal have been made applicable and
not the cross objections. The use of expression “so far as may
be” is to bring general provisions relating to the appeals to
Tribunal into Section 129D(4). Once the provisions relating to the
appeals to the Tribunal have been made applicable, Section 129A(5)
stands incorporated in Section 129D(4) by way of legal fiction and
must be given effect to. Seen thus, it becomes clear that the Act
has given express power to the Tribunal to condone delay in
making the application under Section 129D(4) if it is satisfied that
there was sufficient cause for not presenting it within that
period.
15. We do not think that any useful purpose will be served in
discussing the cases cited by the learned counsel for the appellant
in detail. In none of these cases, the question which has come up
for decision in the present appeal arose. We shall, however,
briefly refer to these decisions.
16. In Hongo India Pvt. Ltd2, the question for
consideration before this Court was whether the High Court had power
to condone the delay in presentation of the reference application
under unamended Section 35-H(1) of the Central Excise Act, 1944
beyond the prescribed period by applying Section 5 of the Limitation
Act, 1963. Sub-section (1) of Section 35-H, which was under
consideration before this Court, read as follows:
“35-H. Application to High Court. – (1) The Commissioner
of Central Excise or the other party may, within one
hundred and eighty days of the date upon which he is served
with notice of an order under Section 35-C passed before
the 1st day of July, 2003 (not being an order relating,
among other things, to the determination of any question
having a relation to the rate of duty of excise or to the
value of goods for purposes of assessment), by application
in the prescribed form, accompanied, where the application
is made by the other party, by a fee of two hundred rupees,
apply to the High Court to direct the Appellate Tribunal
to refer to the High Court any question of law arising from
such order of the Tribunal”.
This Court observed that except providing a period of 180 days for
filing reference application to the High Court, there was no other
clause for condoning the delay if reference was made beyond the said
prescribed period. Sections 5 and 29(2) of the Limitation Act were
noted. This Court then held that the language used in Sections 35,
35-B, 35-EE, 35-G and 35-H makes the position clear that an appeal
and reference to the High Court should be made within 180 days only
from the date of communication of the decision or order and in the
absence of any clause condoning the delay by showing sufficient
cause after the prescribed period, there was complete exclusion of
Section 5 of the Limitation Act. In conclusion this Court held
that the time limit prescribed under Section 35-H(1) to make a
reference to the High Court was absolute and unextendable by the
Court under Section 5 of the Limitation Act. In the present case,
as noted above, the provisions relating to the appeals to the
Tribunal have been made applicable to an application made under
Section 129D(4) and it has been further provided that such
application shall be heard as if it was an appeal made against the
decision or order of the adjudicating authority. Any delay in
presentation of appeal under Section 129A is condonable by the
Tribunal by virtue of sub-section (5) thereof. The Tribunal has
been invested with the same power for consideration of the
applications under Section 129D(4) if it is satisfied that there was
sufficient cause for not presenting such application within
prescribed period as the provisions relating to the appeals to the
Tribunal have been made applicable to such applications. Hongo
India Pvt. Ltd2 does not help the appellant at all.
17. In Delhi Cloth and General Mills Co. Ltd3. the concept of
legal fiction has been explained. This Court observed, “the legal
consequences cannot be deemed nor, therefrom, can the events that
should have preceded it. Facts may be deemed and, therefrom, the
legal consequences that follow”.
18. In Fairgrowth Investments Ltd.4, the question raised
before this Court was whether the Special Court constituted under
the Special Court (Trial of Offences Relating to Transactions in
Securities) Act, 1992 (for short, ‘1992 Act’) has power to condone
the delay in filing a petition under Section 4(2) of the Act.
Dealing with the said question, the Court considered various
provisions of the Limitation Act, including Sections 5 and 29(2),
and ultimately it was held that the provisions of the Limitation Act
had no application in relation to a petition under Section 4(2) of
the 1992 Act and the prescribed period was not extendable by the
Court.
19. In UCO Bank.5, this Court restated, what has been stated
earlier with regard to interpretation of statutes, that the court
must give effect to purport and object of the enactment.
20. In light of the above discussion, we hold that it is
competent for the Tribunal to invoke Section 129A(5) where an
application under Section 129D(4) has not been made within the
prescribed time and condone the delay in making such application if
it is satisfied that there was sufficient cause for not presenting
it within that period.
21. In view of the above, the appeal must fail and it fails and
is dismissed with no order as to costs.
…………………..J.
(R.M. Lodha)
…………………..J.
(Anil R. Dave)
NEW DELHI
OCTOBER 30, 2012.
-----------------------
[1] (2000) 120 ELT 201 (Tri-Delhi)
[2] (2009) 5 SCC 791
[3] (1996) 2 SCC 449
[4] (2004) 11 SCC 472
[5] (2008) 5 SCC 257
