CESTAT having lack of jurisdiction on appeals against Orders of Commissioner (Appeals) on Duty Drawback; refund order was quashed

Commissioner Of Customs Vs Sans Frontiers (Delhi High Court)

Conclusion: The order passed by CESTAT was without jurisdiction, the Revenue, thus, was right in observing that the refund order sanctioned in favour of the Firm pursuant to the order of CESTAT, was required to be reviewed. Therefore, the appeal preferred by the Firm before CESTAT was not maintainable and the order passed by Tribunal was thus void ab initio.

Held: In cross appeals against the revenue, the Firm (M/s Sans Frontiers) impugned a Demand cum Show Cause Notice dated issued by the respondent [Commissioner of Customs (Exports)] demanding recovery of Duty Drawback amounting to ₹54,72,204/-, which according to the respondent was erroneously sanctioned and paid to the Firm. The Firm also impugned the notice dated 06.07.2021 (hereafter ‘the impugned notice’) issued under Section 128A(3) of the Customs Act, 1962 (hereafter ‘the Customs Act’) calling upon the Firm to show cause why the refund order dated 10.02.2020 passed by the Deputy Commissioner (Drawback), ACC Export Commissionerate, not be annulled or any other order as deemed fit be passed by the Appellate Authority. The refund of the Duty Drawback was sanctioned pursuant to the order passed by the Customs Excise and Service Tax Appellate Tribunal (‘CESTAT’). Revenue had preferred the appeal impugning the said order along with applications seeking condonation of delay in filing and re-filing the said appeal. The controversy in the above-captioned matter related to the refund of a sum of ₹54,80,710/- comprising of ₹26,15,942/- being the duty drawback availed by the Firm plus ₹28,64,768/- as interest, which was deposited by the Firm pursuant to a communication dated 12.03.2014. The Firm had prevailed before the CESTAT and accordingly, the refund was sanctioned. Revenue claimed that the same was done erroneously as the CESTAT had no jurisdiction to entertain any appeal relating to Duty Drawback. According to the Revenue, the order passed by the CESTAT was non est and therefore, the sums refunded to the Firm were required to be recovered. It was held that the order passed by a Court, which did not have the subject matter jurisdiction to adjudicate the issue, would be a nullity. No consent, waiver or acquiescence could confer jurisdiction upon a Court, which was otherwise barred by the statute. The order, passed by a Court having no jurisdiction, was non est and its invalidity could be set up at any stage and in any proceedings. It was thus held that, even if it was to be assumed that the Revenue had consented to CESTAT hearing the appeal, the defect of lack of jurisdiction could not be cured. Having arrived at the conclusion that the order passed by CESTAT was without jurisdiction, the Revenue, thus, was right in observing that the refund order sanctioned in favour of the Firm pursuant to the order of CESTAT, was required to be reviewed. Therefore, the appeal preferred by the Firm before CESTAT was not maintainable and the order passed by Tribunal was thus void ab initio. “The question whether the learned CESTAT could pass the judgment in respect of a case falling under proviso (c) of Section 129A(1)(b) of the Customs Act was answered in the negative. Accordingly, the impugned order passed by CESTAT was set aside.

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT

1. M/s Sans Frontiers, a partnership firm (hereafter ‘the Firm’), has filed the present petition [W.P.(C) 7962/2021], inter alia, praying as under:

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