Case Law Details
Mahesh & Co Pte Ltd Vs Commissioner of Customs (CESTAT Allahabad)
Introduction: The recent case of Mahesh & Co Pte Ltd Vs Commissioner of Customs, as heard by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Allahabad, sheds light on the importance of timely compliance with tribunal orders and the potential consequences for government officials failing to adhere to such directives.
Background: The matter in question was listed for compliance with Miscellaneous Order No.70121 of 2023 dated 09.11.2023. The Revenue (government) filed two miscellaneous applications seeking the recall of the Tribunal’s order, specifically the part referring the matter to the High Court for consideration of initiating proceedings under the Contempt of Courts Act.
The Revenue’s Position: The Revenue contended that they had already complied with the Tribunal’s orders by granting no objection for the re-export of gold to M/s. Mahesh & Co. on 07.12.2023. They apologized for the delay in implementing the Final Order dated 12.09.2019, citing reasons such as the change in the Commissioner’s position and seeking legal opinions.
The Applicant’s Response: The applicant, Mahesh & Co Pte Ltd, argued that they had taken legal remedies sincerely and had no intention to defy the Tribunal’s directions. They highlighted the steps taken by the Noida Commissionerate to seek legal opinions, request stays, and communicate with relevant authorities for compliance.
The Tribunal’s Decision: The Tribunal expressed dissatisfaction with the Revenue’s claim of not implementing the order due to legal opinions. Citing the precedent set by the Supreme Court in the Krishna Sales case, the Tribunal emphasized that authorities must obtain a stay order if they believe goods should not be released pending an appeal. The Tribunal acknowledged the delay of four years but considered the unconditional apologies tendered by the concerned commissioners.
Conclusion: While setting aside the order to initiate contempt proceedings, the Tribunal emphasized the need for government authorities to adhere to court orders promptly. The decision serves as a reminder of the importance of timely compliance with tribunal directives and the potential consequences for government officials failing to do so.
FULL TEXT OF THE CESTAT ALLAHABAD ORDER
This matter is listed today for reporting compliance with our Miscellaneous Order No.70121 of 2023 dated 09.11.2023.
2. Revenue has filed the present two miscellaneous applications dated 11.12.2023 in the matter. In the miscellaneous applications filed Revenue states as follows:-
“2. The present application is being filed seeking recall Misc. Order No. 70121 / 2023 dated 09.11.2023 of this Hon’ble Tribunal to the extent of referring the matter to the Hon’ble High Court for consideration as to whether proceedings under the Contempt of Courts Act should be initiated.
3. At the outset, it is respectfully submitted that the orders dated 12.09.2019 and 09.11.2023 of this Hon’ble Tribunal have already been complied with by the applicant by granting no objection to the Commissioner of Customs (Exports), IGI Airport, New Delhi to allow re-export of the gold in question by M/s. Mahesh & Co. on 07.12.2023.
In view of the NOC granted by this Commissionerate, Deputy Commissioner (Export Shed and PCW), ACC Export Commissionerate, IGI, New Delhi vide office letter no. ACC/88/2021-PCWH-O/o Commr-Cus-ACC (E)-Delhi/1920-1924 dated 07.12.2023 addressed to Sh. Mahesh Kumar, Director/Authorized Signatory, M / s Mahesh & Co. Pte. Ltd., 37, Upper Weld Road, Singapore and copy to (i) CEO, CELEBI Warehouse, (ii) Deputy Commissioner (Import Shed), ACC Import Commissionerate and (iii) Sh. Mayank Sharma, Authorized representative of M / s Mahesh & Co. has requested M / s Mahesh & Co. Pte. Ltd to bring the gold seized by DRI on 24.02.2009 at export shed from CELEBI under Customs Supervision, ACC(Export) along with shipping bill for examination and re-export in compliance of CESTAT Allahabad Misc. order No. 70121/2023 dated 09.11.2023 read with Final Order No. 71733-71742 of 2019 dated 12.09.2019.
4. However, the applicant tenders unconditional apology for delay in implementing the Final Order dated 12.09.2019 of this Hon’ble Tribunal. The applicant craves leave of this Hon’ble Tribunal to explain the reasons hereunder:
5. The department had acted bonafide which is evident from the following:
i) the applicant had taken over as Principal Commissioner of Customs, Noida on 03.10.2023. The orders of the Tribunal, Final Order No. 71733 – 71742 / 2019 dated 12.09.2019, Miscellaneous Order No. 70019 / 2021 dated 21.06.2021, Miscellaneous Order No. 70056 / 2021 dated 17.11.2021, Order dated 07.01.2022 and Miscellaneous Order No. 70121 / 2023 dated 09.11.2023 were brought to his notice for the first time on 24.11.2023.
ii) It is respectfully submitted that in compliance of the order 17.11.2021 of this Hon’ble Tribunal, a letter dated 18.11.2021 was written by Noida Commissionerate to the Commissioner, Air Cargo (Export), New Delhi giving NOC to allow re-export of the 38434.71 grams of gold jewellery in compliance of this Hon’ble Tribunal’s Misc. Order No.MO/70019/2021-CU (DB) dated 21.06.2021.
iii) It is further respectfully submitted that subsequently, the opinion of Ld. Additional Solicitor General, High Court of Allahabad in the matter was sought. Vide written opinion dated 29.11.2021, the Ld. Additional Solicitor General had opined that since the appeal filed by the Department has been admitted in the Hon’ble High Court and the application for interim relief/stay was pending, the Ld. CESTAT should not compel for compliance of order impugned until the stay application is disposed off by the Hon’ble High Court.
iv) It is further respectfully submitted that in view of the legal opinion dated 29.11.2021 of the Ld. Additional Solicitor General, Allahabad a letter dated 01.12.2021 was written by the Noida Commissionerate to the Commissioner, Air Cargo (Export), New Delhi with the request that the letter dated 18.11.2021 may be put on hold.
v) It is further respectfully submitted that as a follow-up, on 11.11.2022, a letter was written by the Noida Commissionerate to the Ld. Additional Solicitor General, Allahabad requesting therein for urgent hearing and stay in Customs Appeal No.17/2020 in the case of M/s. Mahesh & Co. PTE Ltd., Singapore, which was pending before the Hon’ble High Court and substantial revenue was involved in the case.
vi) Further, on 29.11.2022, a letter was written to Shri Parv Aggarwal, Sr. Standing Counsel to suggest the options available with the department regarding releasing of gold, taking a bank guarantee which covers all arrears to deal with the present situation. He was also requested for urgent hearing and to obtain stay in respect of M/s. Mahesh & Co., PTE, Ltd., Singapore on lines similar as in the case of M/s. Ajit Exports (Customs Appeal No.06/2022), where Order-in-Original dated 18.10.2018 was set aside by Hon’ble CESTAT, Allahabad, a stay was granted by the Hon’ble High Court, Allahabad in Civil Miscellaneous (stay) application No.02 of 2022.
vii) On 14.02.2023, yet another letter was written to Shri Parv Aggarwal, Sr. Standing Counsel for early hearing and decision on stay application in the Customs Appeal No.17/2020 in the case of M/s. Mahesh & Co. PTE Ltd., Singapore, informing about the discussion on the matter by the Pr. Commissioner with Shri Shashi Prakash Singh, Ld. Additional Solicitor General of India. He was requested to discuss the matter with the Ld. Additional Solicitor General of India (Allahabad High Court), Shri Shashi Prakash Singh and efforts to be made for urgent hearing in the matter of M/s. Mahesh & Co. PTE Ltd., Singapore pending before the High Court, Allahabad. However, despite the action taken by the Noida Commissionerate, the stay application is yet to be heard by the Hon’ble High Court.
6. The aforesaid reasons clearly establish that the applicant, at no point of time, had any intention to defy the directions of this Hon’ble Tribunal. On the contrary, Noida Commissioner was taking legal remedies with utmost sincerity. In any event, the applicant has already tendered his unconditional and unqualified apology for delay in complying with the order of this Hon’ble Tribunal.
7. The applicant had joined the department in 06.09.1993. He has been posted at various places including Directorate of Revenue Intelligence, Delhi Zonal Unit, as Additional Director and also Directorate General of GST Intelligence as Additional Director General. He has been maintaining good record throughout his career, till date.
8. The applicant has highest and deepest regards for all the Legal Institutions including this Hon’ble Tribunal. Throughout his service, there has been no adverse comments by any court against the applicant.
9. In any case, it is submitted that to err is human and forgiveness is a divine act.
10. In view of compliance of orders in toto; unconditional apology tendered by the applicant and the applicant being not responsible for the delay in compliance of Final Order of this Hon’ble Tribunal, it is in the fitness of things and interest of justice that the order/direction to refer the matter to the Hon’ble High Court for considering as to whether the action for Contempt of Courts Act should be initiated, is recalled.
So, it is prayed that the order/direction dated 09.11.2023 to refer the matter to the Hon’ble High Court for considering the action under the Contempt of Courts Act may kindly be recalled. Any other order(s) as may be deemed fit and appropriate may also kindly be passed.”
3. During the course of the hearing of the matter respondent Principal Commissioner along with Commissioner, Air Cargo (Export), New Delhi are present in the court along with Shri Shashi Prakash Singh, Learned Additional Solicitor General to explain the departmental point of view in the matter which is as has been stated in the miscellaneous applications filed and reproduced above.
4. Shri Nishant Mishra, Advocate is present in the court on behalf of the party.
5. Learned counsel for the Revenue submits that the process of re-export of the said gold has been initiated and the gold will be re-exported within a day or two he also referred to the letters written by the respondent Commissioner, to Commissioner Customs (Export) Air Cargo Complex New Delhi dated 07.12.2023 and the letter dated 07.12.2023 from the Office of Commissioner Customs (Export) to the party, for initiating the process of re-export. He concluded by tendering the unconditional apologies for the delay caused in implementation of the orders of CESTAT, and requested for a lenient view in the matter.
6. Counsel for the party confirms that the process has been initiated for re-export of the disputed gold jewellery and various dues which were required to be paid have been paid by the party.
7. We are not impressed by the statement made by the revenue in the miscellaneous application that they did not implement the order of CESTAT for the reason of the legal opinion given to them. In our view the issue is well settled by the decision of Hon’ble Supreme Court in the case of Krishna Sales (P) Ltd., [1994 (73) E.L.T. 519 (S.C.)] wherein following has been held:-
“If the authorities are of the opinion that the goods ought not to be released pending the Appeal, the straight forward course for them is to obtain an Order of Stay or other appropriate direction from the Tribunal or the Supreme Court, as the case may be. Without obtaining such an Order they cannot refuse to implement the Order under Appeal. As is well-known, mere filing of an Appeal does not operate as a Stay or suspension of the Order appealed against. Moreover, such detention is likely to create several complications relating to the demurrage charges besides the possible deterioration of the machinery and goods. We hope and trust that the Collector of Customs, Bombay shall appropriately revise the said public notice in the light of the observations made herein. If he does not do so, there is a likelihood of the Customs Authorities being themselves made liable for demurrage charges in appropriate cases.”
8. The basic contention raised by the Revenue in their miscellaneous application is in respect of the cost imposed and the initiation of proceedings of contempt against the concerned Commissioner. Commissioner’s have by way of the present miscellaneous applications rendered an unconditional apology for the delay in implementing the Final Order dated 12.09.2019.
9. We are aware that Government procedure takes time and courts have to take a balanced view in the matter while taking harsh views in the matter. There are number of clearances by various agencies which cause delay though such delay cannot be justified and we express unhappiness for the delay of 04 (Four) years in the matter but taking note of all the facts and circumstances stated in the application specifically the unconditional apology tendered by the concerned commissioners we are of the view that end of justice will be met for which the concerned officers are warned to be careful in dealing with the matters like this one. In similar situation Hon’ble Bombay High Court has in case of S.J. Enterprises [2023 (383) ELT 24 (Bom)] after taken note of the unconditional apologies tendered discharged the notice for contempt. Hon’ble High Court observed:
“20. The Division Bench felt that such conduct on the part of the Customs Authorities, at least prima facie, amounted to wilful and deliberate disobedience on the part of the Assistant Commissioner of Customs (Import) to the law laid down by this Court in Mahindra and Mahindra Ltd. (supra) and Nobel Asset Company Ltd. (supra). Therefore, the Assistant Commissioner of Customs (Import) was directed to deposit in this Court the encashed Bank Guarantee worth of Rs.14,33,000/-and a show cause notice was issued as to why action under the provisions of the Contempt of Courts Act should not be initiated for prima facie wilful disobedience of the law laid down by this Court in the above decisions.
21. However, the Assistant Commissioner of Customs (Import) tendered an unconditional apology, and the Learned Senior Counsel appearing for Union of India assured the Court that in the future, adequate care would be taken to follow the law laid down by this Court scrupulously. Accordingly, the contempt notice was discharged.”
10. In the case of General Instruments Company [2008 (224) E.L.T. 230 (Bom.)] Hon’ble Bombay High Court has held as follows:
“11. In my view, although, no case is made out of civil contempt as contemplated by the Contempt of Courts Act, 1971, yet, it is clear that the Joint Director and the Authorities have delayed compliance. He has given explanation for the delay and contended that it was not intentional. Ms. Bharucha was at pains to point out that the petitioner was also involved in the process and had been called upon to supply a draft of the necessary document. However, the fact remains that when this Court had directed that the application should be dealt with and considered within a particular time limit, the authorities were obliged to consider the same and if there was any difficulty they should have approached this Court for extension of time. That is admittedly not done. The amendment to the licence was carried out after the time stipulated in the order passed by this Court had expired.
12. From a perusal of the entire material on record, I am of the view that the manner, in which the authorities have treated the petitioner’s request, is not at all commendable. The Authorities were expected to show minimum courtesy to a senior citizen and due regard and respect to the orders passed by this Court. The Authorities would be well advised to follow the Supreme Courts directives and observations in this regard in the case of State of Bihar & Ors. v. Subhash Singh reported in AIR 1997 S.C.1390, the Hon’ble Supreme Court has observed that :-
“3. The doctrine of “fullfaith and credit” applied to the acts done by the officers and presumptive evidence of regularity of official acts done or performed, is appositive in faithful discharge of duties to elongate public purpose and to be in accordance with the procedure prescribed. It is now settled legal position that the bureaucracy is also accountable for the acts done in accordance with the rules when judicial review is called to be exercised by the Courts. The hierarchical responsibility for the decision is their in-built discipline. But the Head of the Department/designated officer is ultimately responsible and accountable to the Court for the result of the action done or decision taken. Despite this, if there is any special circumstance absolving him of the accountability or if someone else is responsible for the action, he needs to bring them to the notice of the Court so that appropriate procedure is adopted and action taken. The controlling officer holds each of them responsible at the pain of disciplinary action. The object thereby is to ensure compliance of the rule of law.
4. The constitutional Courts exercise their power of judicial review with constraint to ensure that the authorities on whom the power is entrusted under the rule of law or confided, is discharged truly, objectively, expeditiously for the purpose for which substantive acts/results are intended. The petitioner being a member of the permanent executive is enjoined to comply with the orders of the Court passed in exercise of the judicial review. On an earlier occasion, while disposing of the writ petition, the High Court had directed the respondent to consider the case of the writ petitioner and to dispose it of with reasoned order within two months. Obviously, the High Court expectation that the authorities would discharge their duties expeditiously as enjoined under the rules and as per the directions. Since they did not discharge the duty, necessarily, they were required to give explanation to the Court as to the circumstances in which they could not comply with the direction issued by the Court or if there was any unavoidable delay, they should have sought further time for compliance. Unfortunately, neither of the steps has been taken by the officer in that regard. Therefore, the High Court was constrained to impose the costs personally against him for non-compliance of the order.
5. It is true and we are alive to the fact that when the officer is to take steps as per the decision, some delay may occasion and generally the Courts would be reluctant to impose costs personally against the officers. But the officers are required to go to the Court, give the appropriate explanation and satisfy the Court that they were prevented by circumstances for non-compliance within the time specified by the Court. It is equally salutary to note that if the High Court feels it necessary to impose costs personally against the officers, the Court is required to enquire after giving notice and reasonable opportunity to the officer who could not be impleaded earlier or was not on record, to explain the reasons for non-compliance of the order or decision taken to file the proceedings. …..It is known fact that in transaction of the Government business, none would own personal responsibility and decisions are leisurely taken at various levels. It is not uncommon that delay would be deliberately caused to confer advantage to the opposite litigant’ more so when stakes involved are high or persons are well connected/influential or due to obvious consideration.”
13. In another decision reported in AIR 1988 S.C. 1025 (Bigyan Kumar & Ors. v.Union of India & Ors.), the Hon’ble Supreme Court observes thus :-
“7. We would part with the matter by recording our serious concern and disapproval of the growing conduct of parties and public officers in particular of ignoring the directions of the Courts and the multiplying instances of confrontation. The Court, including the apex one, is a part of the State and is a built in mechanism of the Constitution to administer justice in accordance with law. For discharging that duty, the Court has got to adopt an attitude of critical assessment of situations connected with litigation brought before it for adjudication. The manner of functioning of the Court in accord with the Rule of law has to be dispassionate, objective and analytical. The Judges who preside over these courts do not act with a sense of superiority; nor do they look down upon others in the community. In order that the system may efficiently work and the purpose for which the courts are established is duly served, it is necessary that everyone within the framework of the Rule of Law must accept the system, render due obedience to orders made and in the event of failure of compliance, the rod of justice must, descend down to punish. We hope and trust that everyone within the system realizes this situation and does not unnecessary get into a confrontation.”
14. In the instant case also, delay has occurred in compliance with the Court’s directions.
15. Although, I am accepting the unconditional apology, tendered by the respondents, despite strong reservations expressed by the petitioner, I wish to remind all concerned that, irrespective of the difficulties in compliance with the Court’s order, the authorities must try their best and in case they cannot adhere to the time limit, then, they must move the Court and seek extension well before the time expires. It is not open for them to urge that the applicant or the petitioner has not approached them within the said time limit. The moment an order of this Court is communicated, necessary steps must be initiated for its compliance within the time granted by the Court. Their first and foremost duty is towards the Court and without insisting upon the applicants or the petitioner’s co-operation in all cases, they must endeavour to decide the applications or matters referred to them. Whenever they require the assistance or co-operation of parties, they must intimate them well in advance and not at the last moment. In all such cases, the Courts may not accept the explanation and the apology tendered much Later. All explanations, after the breach is already committed, cannot be accepted as a matter of course. The bona fides would then have to be tested.”
11. In view of the discussions as above and in view of the unconditional apologies tendered, except the part whereby we have passed direction for implementation of our Final Order No 71733-71742/2019 dated 12.09.2019 read with Misc Order No 70019/2021 dated 21.06.2021, all other parts of our order like imposition of cost and reference of the matter to the Hon’ble High Court for initiating contempt proceedings are reconsidered and set aside.
12. As copy of our earlier order dated 09.11.2023 was forwarded to the Hon’ble High Court, copy of this order should also be sent.
13. Both the miscellaneous applications filed by the Revenue are disposed of.
(Dictated & Pronounced in open court)
