A Two-Judge Bench of the Supreme Court of India directed re-consideration in the matter concerning compounding of offences under Section 137 of the Customs Act, 1962 by the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ).
Nisha Bagchi, counsel appeared for the petitioner-Department. The counsel emphasized on the order of the High Court directing the respondent herein to avail the alternative remedy by way of an appeal to Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) which, in fact, according to the senior counsel, was not available to the respondent inasmuch as CESTAT has no jurisdiction to entertain an application vis-a-vis compounding of an offence under Section 137 of the Customs Act.
The counsel contended that CESTAT has not passed an order on merits of the said application but instead has remanded the matter to the Chief Commissioner (Original Authority) to consider afresh the application filed by the respondent seeking the compounding of the offence under Section 137 of the Customs Act and that the respondent had rightly filed a writ petition which ought to have been entertained on merits by the High Court.
The Court of Justices BV Nagarathna and Sanjay Karol observed that “Bearing in mind the submissions of learned senior counsel and also the fact that the CESTAT has now remanded the matter to the Chief Commissioner to reconsider the application filed for compounding of the offence under Section 137 of the Customs Act, 1962, we decline to interfere in the matter. The Chief Commissioner is now to re-consider the said application in accordance with law. The Chief Commissioner to dispose of the said application filed under Section 137 of the Customs Act as expeditiously as possible.”
“It is needless to opine that in the event either of the parties is aggrieved by the order to be made by the Chief Commissioner a writ petition is maintainable before the High Court. In view of the aforesaid order, the contentions of the senior counsel for the petitioner that the CESTAT had no jurisdiction to entertain the appeal filed by the respondent herein is kept open for the reason that CESTAT entertained the appeal in 2 the instant owing to the order passed by the High Court reserving liberty to the respondent herein to avail of the appellate remedy” the Court concluded.
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