W.P.(C)/530/2025 of JAI DURGA RUBBERISED FABRICS INDIA PVT. LTD. Vs COMMISSIONER OF CUSTOMS

IN THE HIGH COURT OF DELHI AT NEW DELHIDate of Decision: 19[th]March, 2025Date of Decision: 19[th]March, 2025+W.P.(C) 530/2025

JAI DURGA RUBBERISED FABRICS INDIA PVT.

LTD......Petitioner

Through:Mr. Pradeep Jain, Mr. SbhubhankarJha, Mr. Sambhav Jain & Mr.PranavRaj Singh, Advs.Jha, Mr. Sambhav Jain & Mr.PranavRaj Singh, Advs.

versus

COMMISSIONER OF CUSTOMS

.....Respondent

Through:Mr. Aditya Singla, SSC (CBIC) withMr. Siddharth Saxena, Mr. RitwikSaha and Mr. Umang Misra, Advs.Mr. Siddharth Saxena, Mr. RitwikSaha and Mr. Umang Misra, Advs.

CORAM:JUSTICE PRATHIBA M. SINGHJUSTICE RAJNEESH KUMAR GUPTA

Prathiba M. Singh, J. (Oral)

1.This hearing has been done through hybrid mode.

2.This order reveals complete COMEDY OF ERRORS.

3.The present petition has been filed by the Petitioner under Article226/227 of the Constitution of India seeking to quash the impugned order226/227 of the Constitution of India seeking to quash the impugned order

dated 9th October, 2024 passed by Customs Excise And Service TaxAppellate Tribunal (hereinafter ‘CESTAT’), New Delhi in Customs Misc.Application No. 50345/ 2024 in Customs Appeal No. 53499/2014

4.The petition reveals an unfortunate situation wherein the CESTATwhile intending to correct an error in its initial order passed on 9[th]December,2016, continued to make repeated errors resulting in the impugned order andthe present challenge.

5.The background of this case, is that the Petitioner had imported certain

semi-finished Coaxial Cables in the year 2011 and an allegation of under-valuation was raised against the Petitioner. The goods were, consequently,detained on 2nd December, 2011. The Petitioner sought provisional releaseof the goods and the same was permitted subject to certain conditionsincluding furnishing of bank guarantee.

6.After completion of investigation, Show Cause Notice was issued on31[st]October, 2012 and customs duty to the tune of Rs.29,66,805/- wasdemanded. The Bank Guarantee was also proposed to be encashed. Inresponse to the Show Cause Notice, reply was filed and finally the Order-in-Original was passed on 30[th]September, 2013. In terms of the said order,the demand of custom duty was confirmed and the goods were confiscated.However, the Authority gave the Petitioner an opportunity to redeem thegoods subject to payment of redemption fine to the tune of Rs.20 lakhs. Theoperative portion of the said order reads as under:

“xxxxxxxxx(ii) I, hereby, confiscate the goods totally valued atRs.1,09,80,032/-involvingcustomsdutyofRs.29,66,805/- provisionally released to the importerunder Section 111(d) and (m) of the Customs Act, 1962.However, I provide an opportunity for redemption of thesaid confiscated goods against payment of RedemptionFine of Rs.20,00,000/- (Rupees Twenty Lakhs Only)under Section 125(1) of Customs Act, 1962 and thisoption is to be exercised within one month of thisorder.”

7.The said order was appealed by the Petitioner and the Commissioner(Appeals) passed an order dated 31st March 2014 allowing the appeal. Theoperative portion of the order passed by the Commissioner (Appeals) is set

out below:

“22. It is well settled law that transaction value cannotbe rejected without clear and cogent evidence producedby the department with regard to the quantity, quality,country of origin and place and time of import. It is alsowell settled law that it is for the department to producethe evidence to show that the transaction value is notacceptable in view of the comparable price. Thecircumstances that permit such rejection and thealternative basis for fixing assessable value arespecified in the Valuation Rules themselves. No suchlegally permissible steps were taken in the present case.Further, the department has not brought anything onrecord to suggest that the appellant had paid anyamount over and above the value declared by theappellant.23. In view of the foregoing it is evident that theimpugned order enhancing the assessable value wasnot fair and legal based on legally permissiblegrounds. Therefore, the impugned order is set asideand the appeal is allowed in the light of facts of thecase and goods are directed to be valued in the light ofcontemporary import value, as discussed above andalso in the light of case laws 2009 (95) R. L.T 67 (SC),-2008 (89) RLT 494 (CESTATDel), 2009 (93) RLT 321(CESTAT- Mumbai.”

8.The Department challenged this order before CESTAT. The Tribunalvide order dated 9[th]December, 2016 dismissed the second appeal preferredby the Department on account of non-appearance by the Petitioner/Company.Strangely, the Revenue’s Appeal was dismissed due to non-appearance of thePetitioner herein.

9.Thereafter, upon an application by the Department, the previouslydismissed appeal, being Customs Appeal No.53499/2014 (DB) was restored

to be heard on merits vide order dated 29[th]December, 2017.

10.On 18[th]January, 2018, which is the order that has caused the confusionleading up to the present petition, the CESTAT observed as under:

“xxxxxxxx4. After hearing both the parties and on perusal of therecord, it appears that the imported goods were in semi-finished condition and same were not available in theretail market. The market inquiry was made out in theprevailing market price and Government approvedValuerinhisvaluationreportdated29.11.2011submitted his report based on weight components of theconstituent materials of the said semi-finished co-axialcables.

5, But on the other hand, Commissioner (Appeals) hasaccepted the value on the basis of NIDB data. Therespondent has also fled copy of VAT return where thevalue was declared and the same support the value at thetime of return. From the Record, it appears that theCharteredEngineercertifiedthatappellantshaveimported semi-finished goods in terms of prevailinginternational price of the material for the purpose ofreducing the value. The said Chartered Engineers wasnever cross examined. But the Commissioner (Appeals)has accepted the value on the basis-of NIDB data of thesame product.

6. In view of the above, the order passed by theCommissioner (Appeals), which is based on NIDB datais not maintainable.Commissioner (Appeals), which is based on NIDB datais not maintainable.

7. In the result, appeal filed by the Revenue, isdismissed.”dismissed.”

11.A perusal of the above order would show that the CESTAT was of theopinion that the Commissioner (Appeals) had accepted the value based on theNIDB data. However, the said Engineer who had certified that the Petitionerhad imported semi-furnished goods was not cross-examined. Thus, the

CESTAT was of the opinion that the Commissioner (Appeals)’s order wasnot sustainable. However, strangely once again, the Revenue’s appeal wasdismissed when the logical consequence of the said conclusion, was to eitherremand the matter or to fully allow the appeal of the Revenue.

12.In view of the mistake that had occurred in the order, the Departmentthen filed an application seeking rectification. In the said rectificationapplication, the following order dated 5th April, 2019 was passed:

“Heard the parties on the ROM application filed by theRevenue againstthe Final Order dated 18.01.2018.

2. The order-in-appeal (impugned order) was passed bytheCommissioner(Appeals),wherebytheCommissioner (Appeals) had accepted the valuationdeclared by the importer /respondent in the bill of entry.Being aggrieved, the appellant/Revenue was before thisTribunal, in appeal. In para-6 of the Final Order, it hasbeen observed as follows:

“6 In view of the above, the order passed by

the Commissioner (Appeals), which is basedon NIDB data is not maintainable."

3. Whereas in para-7 of Final Order, it is mentioned, "Inthe result, appeal filed by the Revenue is dismissed".4. Thus, we find that there is apparent conflict betweenpara-6 and 7 of the Final Order.the result, appeal filed by the Revenue is dismissed".4. Thus, we find that there is apparent conflict betweenpara-6 and 7 of the Final Order.

5. In this view of the matter, we recall the Final Orderdated 18.01.2018 and also restore the appeal to itsoriginal number.

6. Put up for final hearing on 16.05.2019.”

13.Thus, as can be seen from the above order dated 5[th]April, 2019, theCESTAT instead of correcting paragraph 7 of the previous order, recalled theentire order and put up the matter for final hearing once again. The partiesthen filed written submissions, etc.,

14.For the third time, confusion was again perpetuated and confounded bya further order dated 18[th]March, 2024 which reads as under:

“The appeal was heard in the presence of both theparties and was disposed of by order dated 18.01.2018.Thereafter, ROM was filed by the Department in view ofthe contradiction between para 6 and 7 of the orderdated 18.01.2018. The matter was listed on 21.11.2023and as last opportunity, time was granted to therespondent, but it appears that on subsequent dates on02.01.2024 and 16.01.2024 none appeared for therespondent. Matter is listed today, however, therespondent is still absent.

2. We have heard learned Authorised Representative forthe Revenue and have perused the records of the caseand we find that the error pointed out in the order dated18.01.2018 seems to be correct. The observation in para

6 and 7 are quoted below:

"6. In view of the above, the order passed bythe Commissioner (Appeals), which is basedon NIDB data is not maintainable.the Commissioner (Appeals), which is basedon NIDB data is not maintainable.

7. In the result, appeal filed by the Revenue, isdismissed."dismissed."

3. From the above, it appears that the order of theCommissioner relying on the NIDB data has not beenfound to be maintainable and, therefore, the appealfiled by the Revenue was required to be allowed.Hence, we modify the order to that extent that theappeal filed by the Revenue is allowed and para 7 ofthe Final Order dated 18.01.2018 shall read as under:

“7. In the result, appeal filed by the Revenue, isallowed.”

15.In the above order, the CESTAT, without considering its own orderdated 5[th]April 2019, took up the rectification application and paragraph 7 ofthe order dated 18[th]January, 2018 is modified to the effect that the Revenue’s

appeal is allowed.

16.The Petitioner then filed another application seeking recall of the saidorder which resulted in the impugned order. In the impugned order dated 14[th]October, 2024, the CESTAT again observed as under:

“11. May be, that in our order on 18.03.2024 we hadnot mentioned about the order dated 5.04.2019,however, that does not render the order liable to berecalled. In arriving at this conclusion, we aresupported by the observations of the Delhi High Courtin Deeksha Suri (supra), that merely because theTribunal overlooked an interim order of its own whiledeciding the appeal, finally, (assuming it to be so) it willnot render the judgement void or nullity. At worse itmay be an order vitiated by an irregularity of procedureor an illegality. Such an order cannot be 'recalled'.12. The second limb of the application that suitableorder may be passed on account of monetary limits inview of the Instructions dated 02.11.2023 issued by theCBIC cannot be the scope of application for recalling ofthe order as it would amount to opening the Pandorabox in all the disposed of matters. This is not the correctstage as the appeal has already been disposed of by afinal order.

13. Hence, we do not find any error in our order dated18.03.2024, whereby the appeal was finally disposed of.We, therefore, dismiss the application.”

17.Thus, in effect the Petitioner is aggrieved by the fact that the Revenue’sAppeal which was initially dismissed and fixed for final hearing, has nowbeen allowed. Thus, three different orders have been passed by the CESTATin the same appeal.

(i)Firstly, vide order dated 18[th]January, 2018, the appeal wasdismissed;

(ii)Secondly, Vide order dated 5[th]April, 2019, the order dated 18[th]January 2018 was recalled and the appeal was listed for finalhearing; andJanuary 2018 was recalled and the appeal was listed for finalhearing; and

(iii)Thirdly, Vide order dated 18[th]March, 2024, the Revenue’sappeal was allowed.appeal was allowed.

(iv)Fourthly, the impugned order dated 14[th]October 2024 is passedand no consideration is given to the order dated 5[th]April 2019 tohear the matter on merits.and no consideration is given to the order dated 5[th]April 2019 tohear the matter on merits.

18.Such contradictory orders could not have been passed by the CESTATin the same appeal. The final order dated 14[th]October, 2024 again shows thatCESTAT has not considered that the matter was to be finally heard in termsof order dated 5[th]April, 2019. The proper course of action would have beenfor CESTAT to completely re-hear the matter on merits which it has not done.19.At this stage, reliance is also placed upon the INSTRUCTION dated2[nd]November, 2023, issued by the CBIC wherein monetary limits have beenfixed for filing of appeals by the Department. In terms thereof, for CESTATappeals, the monetary limit would be to the tune of Rs.50 lakhs. The relevantportion of the circular is extracted below:

“In exercise of the powers conferred by Section 131BA of theCustoms Act, 1962 and in partial modification of earlierinstruction issued from F. No. 390/Misc./163/2010-JC dated17.08.2011, the Central Board of Indirect Taxes & Customs(hereinafter referred to as the Board) fixes the followingmonetary limits below which appeal shall not be filed intheCESTAT, High Court and the Supreme Court:

20.This Court has considered the matter. The entire dispute dates back to2011 when provisional release took place. bank guarantee has beenfurnished by the Petitioner for the last more than 14 years which is now lyingwith the Respondent/Department. The Petitioner has incurred substantialcosts in the matter.

21.The present dispute would, in the opinion of this Court, be clearlycovered by the circular dated 2[nd]November, 2013, as the amount involved isless than Rs. 50 lakhs. Upon hearing both the parties in detail, this Court is ofthe opinion that in view of the said instructions, the appeal of the Departmentbefore CESTAT deserves to be dismissed. Accordingly, in exercise of powersconferred under Article 227 of the Constitution of India, the appeal filed bythe Department before CESTAT stands dismissed, in view of the monetarylimits. The bank guarantee shall be released within period of 8 weeks.

22.The Court acknowledges that the appeal was filed before the Instructiondated 2nd November, 2023 came into effect and finds no lapse on the part ofthe Department. However, the present order has been passed considering thefact that disregarding the Instruction dated 2nd November, 2023 would serveno useful purpose, as it would necessitate the restoration of the appeal for afresh hearing. It would also mean that the Bank Guarantee would continue tobe kept alive incurring further costs. Considering the monetary limit of the

Instruction would apply even to pending matters, the CESTAT would alsoinevitably follow the same course of action. Thus, instead of remanding thematter, considering that the monetary value in the Appeal before CESTAT isRs. 29,66,805/- plus Rs. 20 lakhs, which is below the limit fixed for CESTATappeals, the appeal before CESTAT deserves to be dismissed on this shortground itself.

23.Accordingly, the petition is allowed and disposed of in these terms. Allpending applications, if any, are also disposed of.

PRATHIBA M. SINGHJUDGE

MARCH 19, 2025Rahul/Ar.

RAJNEESH KUMAR GUPTAJUDGE