Mitro Enterprises Vs Principal Commissioner of Customs (Air Cargo) (Madras High Court)
The Madras High Court considered a writ petition filed by a proprietary concern that imported goods from Korea through Chennai Customs Airport, declaring them as Herbal Classic Menthol, an original herbal product (charcoal filter), tobacco-free and nicotine-free sticks made of tea leaves, under Customs Tariff Heading (CTH) 30049011 (Chapter 30). The importer declared assessable values of Rs.8,99,640 and Rs.17,99,280 in two bills of entry dated 22.05.2023 and 25.05.2023 respectively. According to the petitioner, the imported goods were tobacco-free and nicotine-free and were correctly classifiable under Chapter 30. After obtaining a test report confirming the absence of tobacco and nicotine, the Assessing Officer nevertheless classified the goods under CTH 24029090 (Chapter 24) and passed an Order-in-Original imposing the applicable tariff and a penalty of Rs.15,000 for misdeclaration.
The petitioner challenged the Order-in-Original before the Commissioner of Customs (Appeals). By order dated 10.07.2024, the appellate authority partly allowed the appeal by upholding the classification of the imported goods under Chapter 24, CTH 24029010, while setting aside the penalty imposed under Section 117 of the Customs Act, 1962. Dissatisfied with the classification, the petitioner filed W.P. No.20422 of 2024 seeking release of the goods lying in the Customs Bonded Warehouse at Chennai on the ground that the departmental classification was erroneous. Subsequently, on legal advice that the pendency of the writ petition seeking provisional release would not prevent filing a statutory appeal, the petitioner filed an appeal before the CESTAT with a delay of 144 days.
The CESTAT dismissed the petition for condonation of delay, holding that the reasons furnished amounted to an excuse rather than sufficient cause. The Tribunal identified illustrative criteria for condoning delay, namely that the cause must be beyond the party’s control, the party should not be negligent, due diligence and care must have been exercised, and the party should not have slept over its rights.
Before the High Court, the petitioner submitted that the Tribunal itself had recognised that its criteria were only illustrative and not exhaustive. It contended that the delay was bona fide because the petitioner had initially approached the High Court for release of perishable goods. The petitioner referred to the interim order dated 09.09.2024 in W.P. No.20422 of 2024 directing it to seek provisional release of the goods by furnishing a bank guarantee and bond and directing the Customs authorities to adjudicate the issue relating to exemption of duty after affording an opportunity of hearing. The petitioner argued that the classification dispute remained alive and that the explanation for delay was reasonable and sufficient.
The Customs Department opposed the writ petition on the grounds that an effective statutory appeal under Section 130 of the Customs Act, 1962 was available and that the explanation for the 144-day delay was unsatisfactory. It contended that the petitioner had not explained the delay between the High Court’s interim order dated 09.09.2024 and the filing of the appeal on 20.02.2025. The Department further argued that the earlier writ petition sought different relief and therefore the petitioner could not claim the benefit available to a bona fide litigant pursuing a remedy in the wrong forum under Section 14 of the Limitation Act, 1963.
The High Court examined the preliminary objection regarding maintainability. The petitioner relied upon Thiruchitrambalam Projects Limited – vs — CESTAT, Chennai, which referred to Metal Weld Electrodes v. CESTAT, Chennai and Rajkumar Shivhare v. Assistant Director, DoE. The High Court noted that while orders of the CESTAT are appealable under Section 130 of the Customs Act, 1962, writ petitions are maintainable only in exceptional circumstances identified by the Supreme Court in Rajkumar Shivhare, namely where there is a complete lack of jurisdiction, violation of the principles of natural justice, or action under a provision declared ultra vires. The Court also referred to Thansingh Nathmal v. Superintendent of Taxes, reiterating that the High Court ordinarily does not exercise writ jurisdiction where an alternative statutory remedy exists. It further referred to Assistant Commissioner of Sales Tax and others -vs- Commercial Steel Limited, observing that although an alternate statutory remedy is not an absolute bar, writ jurisdiction is generally exercised only in exceptional cases involving breach of fundamental rights, violation of natural justice, challenge to the validity of statutory provisions, or excess of jurisdiction.
Applying these principles, the High Court held that the petitioner’s case did not fall within any of the recognised exceptions. It observed that even if failure to avail the statutory appeal could be treated as a curable defect, the limitation prescribed under fiscal law could not be condoned casually and that condonation of delay is a question of fact. The Court declined to comment on the pending writ petition relating to classification of goods. It noted that the petitioner had consciously chosen to challenge the classification through a writ petition instead of filing the statutory appeal within time and that the explanation furnished in support of condonation had been found unsatisfactory by the CESTAT. Since there was no breach of fundamental rights or violation of the principles of natural justice in the Tribunal’s order, the High Court held that the writ petition was liable to be dismissed both on the ground of maintainability and on merits. Accordingly, the writ petition was dismissed without costs and the connected miscellaneous petition was closed.
Cases Discussed
- Assistant Commissioner of Sales Tax and others -vs- Commercial Steel Limited (Supreme Court), 2021 (10) SCALE 665
- Thiruchitrambalam Projects Limited – vs — CESTAT, Chennai (Madras High Court), 2016 (43) S.T.R. 531 (Mad)
- Metal Weld Electrodes v. CESTAT, Chennai (Madras High Court), 2014 (299) E.L.T. 3 (Mad)
- Rajkumar Shivhare v. Assistant Director, DoE (Supreme Court), (2010) 4 SCC 772
- Seth Chand Ratan v. Pandit Durga Prasad (Supreme Court), (2003) 5 SCC 399
- Thansingh Nathmal v. Superintendent of Taxes (Supreme Court), AIR 1964 SC 1419
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The writ petition is filed by the proprietary concern, which has imported goods from Korea through Chennai Customs Airport, declaring the goods as Herbal Classic Menthol, original herbal product (charcoal filter) (tobacco free, nicotine free), sticks made of tea leaves and classified it under Customs Tariff Heading 30049011(Chapter 30). The bill of entry dated 22.05.2023, declared the assessable value as Rs.8,99, 640/- and the bill of entry dated 25/05/2023 declared the accessible value as Rs.17,99,280/-. According to the writ petitioner, the goods imported are tobacco free and nicotine free products. Hence, it has been rightly classified under the tariff 30049011. Whereas, the Assessing Officer, after obtaining the rest of the report confirming the samples, do not contain any tobacco or nicotine product has classified the WEB goods under Tariff Head — CTH24029090 (Chapter 24). Order-in-Original imposing tariff and penalty of Rs.15,000/- levied for mis-declaration.
2. The writ petitioner aggrieved by the order-in-original had preferred appeal before the Commissioner of Customs (Appeal). The appellate authority vide its order dated 10.07.2024, partly allowed the appeal by upholding the classification of the goods imported falls under Chapter 24-CTH 24029010 as determined by the Assessing Officer, however, set aside the penalty levied under Section 117 of the Customs Act, 1962.
3. Not satisfied with the order of the appellate authority, the petitioner herein has filed W.P.No:20422 of 2024 seeking release of the goods on the ground that the classification of the goods by the Department is erroneous. In the said writ petition, mandamus to clear the goods kept in the Customs Bonded Warehouse at Chennai was prayed. Later, on advice that the pendency of the writ petition seeking provisional release of the goods would not be an impediment in filing the statutory appeal before the Central Excise & Service Tax Appellate Tribunal, the writ petitioner has filed an appeal before the Central Excise & Service Tax Appellate Tribunal, Chennai with a delay of 144 days.
4. The Central Excise & Service Tax Appellate Tribunal (CESTAT) examining the cause shown for the delay, dismissed the miscellaneous petition filed for condonation of delay holding that the cause shown is in the nature of excuse, but not a sufficient cause falling under the criteria listed as acceptable cause.
5. The impugned order of the CESTAT has postulated the following criteria as acceptable criteria for condoning delay:-
“(i)It must be a cause which was beyond the control of the party invoking it.
(ii) The party must not be guilty of negligence.
(iii) Due diligence and care must be shown to have been taken.
(iv) It should not be that the party kept sleeping over their rights for long and woke up when they discovered some judgment of change in law to their advantage.”
6. The Learned counsel for the writ petitioner submitted that even according to the CESTAT, the criteria postulated by it, is not exhaustive, but only illustrative. That apart, the cause for delay is very bonafide. The petitioner, being aggrieved by erroneous classification of the goods, has lawfully approached the Court seeking release of the goods, which are perishable in nature. In the said writ petition, the Learned Judge on 09.09.2024 passed the following direction:-
“(ii) In the meantime, the petitioner is directed to approach the Authority concerned by taking out appropriate application seeking for provisional release of the goods subject to the execution of Bank Guarantee with regard to the differential rate of duty along with a Bond.
(iii) Any such application is being moved by the petitioner, the Authority concerned is directed to consider the same and release the goods within a week’s time from the date of execution of such Bank Guarantee.
(5. The respondent-Customs Department is also directed to adjudicate the matter relating to the issue of exemption of duty for import of the goods, viz., Herbal Tea Cigarettes by the petitioner in accordance with law after affording ample opportunities to the petitioner, as expeditiously as possible, so that this court need not labour much to resolve the controversy raised in the present Writ Petition and the decision taken in the adjudication proceedings would bind on the issue involved therein.”
7. Therefore, he submitted that the issue of classification of the goods still remains a live dispute. As directed by the High Court, the writ petitioner has filed the appeal before the Tribunal explaining the reasonable cause for delay, which is adequate and sufficient. The impugned order of the Tribunal denying right to contest the matter on merits, despite proper explanation for delay, is liable to be set aside and the order to condone the delay and dispose the appeal on merit, has to be passed.
8. The Respondents in the counter affidavit has contented that, the present writ petition is not maintainable and liable to be dismissed in-limine. The petitioner, without exhausting the statutory remedy of appeal, expressly provided under Section 130 of the Customs Act,1962 which is effective and efficacious, had resorted to invoke the writ jurisdiction, which can be invoked only in case of absence of alternative remedy.
9. Insofar as the merit, the Department contention is that the Tribunal has dismissed the condone delay petition, after due scrutiny of the reasons stated for the delay of 144 days. The writ petitioner seeking mandamus has filed W.P.No:20422 of 2024 for release of the goods. Only after the interim direction of the High Court on 09.09.2024, the challenge to the order of the Appellate Authority dated 10.07.2024 was made on 20.02.2025. The delay in filing the appeal is reckoned from date of the interim order passed by the High Court in W.P. No:20422 of 2024. If, really the writ petitioner is a bonafide litigant, the appeal before the CESTAT ought to have been filed within 90 days from the order of the Appellate Authority or immediately after the order of the High Court passed on 09.09.2024. No reason has been given by the writ petitioner for the delay in filing the appeal between 09.09.2024 to 20.02.2025. Further, W.P.No:204222 of 2024 is not a litigation in the wrong Forum to save limitation under Article 14 of the Limitation Act, 1963. The relief prayed in W.P.No.20422 of 2024 and the relief prayed before the Tribunal in the appeal are different and hence, the writ petitioner cannot claim to be a bonafide litigant agitating his cause in a wrong Forum to get the benefit of Section 14 of the Limitation Act, 1963.
10. Thus, the writ petition is opposed by the Department on two grounds. The primary objection is the maintainability of a writ petition, when there is remedy of statutory appeal available under Section 130 of the Customs Act, 1962. The second objection is that the reason for delay in filing the appeal has not been properly explained and the explanation given by the writ petitioner is not a satisfactory cause, but mere explanation bereft of reasonable cause.
11. In respect of the preliminary objection regarding maintainability, the Learned Counsel appearing for the writ petitioner relies on the judgment of this court rendered in Thiruchitrambalam Projects Limited – vs — CESTAT, Chennai [Reported in 2016 (43) S.T.R. 531 (Mad)], wherein a Division Bench of this Court considering the judgment of another Division Bench rendered in Metal Weld Electrodes v. CESTAT, Chennai reported in [2014 (299) E.L.T. 3 (Mad)] and the judgment of the Hon’ble Supreme Court rendered in Rajkumar Shivhare v. Assistant Director, DoE reported in [(2010) 4 SCC 772] concur the view of the Division Bench of this Court rendered in Metal Weld Electrodes case to the answer to the reference as follows:-
” The order passed by the CESTAT in terms of Section 35F of the Central Excise Act, 1944 or Section 129 F of the Customs Act, 1962 is appealable in terms of Section 35 G of the Central Excise Act, 1944 or Section 130 of the Customs Act, 1962.”
12. The Learned Judges further added, ‘however, at the same time, in exceptional circumstances carved out in the second part of paragraph No.38 of the decision of the Hon’ble Supreme Court in Rajkumar Shivhare case, the writ petitions are also maintainable.
13. Therefore, in the said circumstances, it is necessary to ascertain whether the case of the writ petitioner falls within the exceptional circumstances mentioned in second part of paragraph No. 38 in Rajkumar Shivhare case.
14. For convenience sake the entire paragraph is extracted below:-
“38. The learned counsel for the respondents relied on a judgment of this Court in Seth Chand Ratan v. Pandit Durga Prasad [(2003) 5 SCC 399] . The learned counsel relied on para 13 of the said judgment which, inter alia, lays down the principle, namely, when a right or liability is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before seeking the discretionary remedy under Article 226 of the Constitution. However, the aforesaid principle is subject to one exception, namely, where there is a complete lack of jurisdiction of the tribunal to take action or there has been a violation of rules of natural justice or where the tribunal acted under a provision of law which is declared ultra vires. In such cases, notwithstanding the existence of such a tribunal, the High Court can exercise its jurisdiction to grant relief”
15. In the same judgment at paragraph No.33, the Hon’ble Supreme Court has referred the Constitution Bench decision rendered in Thansingh Nathmal v. Superintendent of Taxes reported in [AIR 1964 SC 1419]. In the said case, the Hon’ble Supreme Court, while commenting upon the exercise of writ jurisdiction by the High Court under Article 226 of the Constitution of India, subject to self-imposed limitation, had explained that the High Court does not therefore, act as a Court of Appeal against the decision of a Court or Tribunal to correct errors of facts, and does not by assuming jurisdiction under Article 226 of the Constitution, upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to approach the Tribunal, or even itself in another jurisdiction for obtaining reddress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Article 226 of the Constitution. The machinery created under the statute cannot be bypassed leaving the party applying to it to seek resort to machinery, so set up.
16. It is well settled by the Hon’ble Supreme Court in catena of judgments that alternate statutory remedy is not an absolute bar to invoke writ jurisdiction under Article 226 of the Constitution of India. In exceptional case, writ can be issued, if there is breach of fundamental right, violation of natural justice principle, challenge to the vires of the provisions of the statute or delegated legislation or excess of jurisdiction. [Ref Assistant Commissioner of Sales Tax and others -vs- Commercial Steel Limited — (2021 (10) SCALE 665)1
17. In the case under consideration, the facts do not fall under any of exceptions to entertain the writ petition challenging the order of dismissal by the Tribunal. Even assuming, failure to avail the alternate statutory remedy under Section 130 of the Customs Act, 1962 is a curable defect, limitation prescribed under the fiscal law cannot be condoned in casual manner. Condonation of delay is a pure question of fact.
18. The learned Counsel for the writ petitioner submitted that after the order of the appellate authority dated 10.07.2024, the writ petitioner believed that the writ petition would give a quietus to the issue. Hence, filed W.P.No.20422 of 2024. Later, on appropriate legal advice, the statutory appeal filed. The delay, therefore, is a bonafide delay. He reiterates that the issue regarding classification of goods can still be considered in the pending W.P.No: 20422 of 2024. We are not inclined to make any observation about the above submission, which is subject matter of the pending writ petition in W.P.No:20422 of 2024.
19. In so far as the present writ petition, we find the writ petitioner without filing the statutory appeal in time before the Tribunal, has consciously chosen to file the writ petition questioning the classification of goods with a prayer to release the goods treating it as goods under Chapter-30, instead of Chapter-24 for the sake of customs tariff. While so, the statutory appeal filed thereafter with delay should contain sufficient cause. Since the cause shown in the condone delay petition is not satisfactory and the same has been turned down by the CESTAT. In the absence of any breach of fundamental right or violation of natural justice principle seen from the order impugned, the writ petition deserves to be dismissed both on its maintainability as well as merits.
20. Accordingly, this Writ Petition stands dismissed. No order as to costs. Consequently, connected Miscellaneous Petition is closed.
