Customs appeal u/s 129A (3) can be filed before CESTAT within three months of the communication of the order: CESTAT [Read Order]

In  a significant case, the Chennai bench of the Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) held that appeal under section 129A (3) of the Customs Act can be filed before CESTAT within three months of the communication of the order.

M/s. Associate Lumber Pvt. Ltd, the appellant had imported  ‘Roughly Square Teak Logs, Teak Logs, Teak Round Logs etc.’ vide 34 Bills of Entry and filed refund claim for Rs.23,30,109/-. The lower authority vide Order in Original dated 18.5.2012, after verifying the records allowed refund of the entire amount of Rs.23,30,109/-.

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Department issued Show Cause cum Demand Notice for recovery of an amount of Rs.3,31,091/- as the goods pertaining to Bill of Entry No. 2869391 dated 2.3.2011 were cleared at Tuticorin Port and does not pertain to the jurisdiction of Chennai Customs. Therefore, the sanction of refund towards the said Bill of Entry was sought to be recovered. In the meanwhile, aggrieved by the sanction of refund, the department filed an appeal before Commissioner (Appeals).

Vide the impugned order, the Commissioner (Appeals) had directed recovery of the refund amount of Rs.3,31,091/- as the refund has been granted without jurisdiction. The department vide Demand Notice dated 14.1.2015 confirmed the demand for recovery of erroneous refund amount of Rs.3,31,091/-. T

Shri Shashank Nair,  Advocate appeared for the appellant and Shri N. Satyanarayanan, Authorized Representative appeared for the respondent-department.

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Counsel for the appellant has stated that the issue involved is the rejection of their refund claim on technical grounds. The impugned order has been issued in violation of the principles of natural justice and without discussing the issue on merits and hence may be set aside, with consequential relief.

The revenue stated that an opportunity for hearing was granted by the First Appellate Authority, but the intimation letter was returned with the remarks ‘left and moved’, as recorded in the order. Hence no purpose would be served by sending another notice when the appellant has not shown due care to intimate the Commissioner Appeals Office of the new address.

The bench found that the impugned Order in Appeal has allowed the department’s appeal and directed that action may be initiated to recover the erroneously sanctioned refund. The impugned directions have been acted upon by the Lower Authority and a Demand Notice dated 14/01/2015 has been issued for recovery of an amount of Rs.3,31,091/- erroneously granted, as recorded at para 6 of the said Notice, even prior to three months from the issue of the impugned order. 

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As per Section 129A (3) of the Customs Act, 1962, an appeal can be filed before CESTAT within three months of the communication of the order, whether it is filed by the party or by the department. Thus, coercive action before completion of the appeal period and the crystallisation of the substantive rights and liabilities of either of the parties has adversely affected the appellants chances from getting relief from a higher Appellate forum. Board vide Circular No.788/21/2004-CX, dated 25th May, 2004 had clarified and

directed that field officers should refrain from taking coercive action till the period of filing a stay petition before the CESTAT, or till the disposal of the stay petition, whichever is earlier.

The Tribunal found that the impugned order is very cryptic without there being a adjudication of the rights and liabilities of parties by the application of mind to the merits of the matter. While the First Appellate Authority, could have decided the matter ex-parte for nonprosecution, however it should not have been done at the first instance when the intimation letter was returned with the remarks ‘left and moved’.

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The appellant should not have been denied the opportunity for a personal hearing as required by the principles of natural justice without making a serious attempt to reach out to him, through his representative or through the department, lest the appellant be aggrieved with closure of the appeal, for unintended lapses. This is not to condone the laxity on the part of the appellant in not updating his new contact address, which is not appreciated. However substantive justice should not be denied on technical grounds without making visible efforts to reach out to the appellant.

A single bench of Shri M. Ajit Kumar, Member (Technical) set aside the impugned order and remanded the matter to the file of the First Appellate Authority to be decided afresh after giving the appellant an opportunity of being heard, as per law.

Further while allowing the appeal, it was directed that “The appellant should cooperate in the matter and appear for the hearing on the date fixed. He should also indicate the correct address for service of notice to the said authority, within fifteen days of receipt of this order.”

To Read the full text of the Order CLICK HERE

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