Judgment:
1. C/Misc/301/91 has been brought by the applicants bringing to our notice the non-implementation of this Bench's Order No. 517/90/WRB, dated 13-11-1990.
2. Shri Sunder Rajan narrated certain facts for proper appreciation of the position. The aforesaid order was passed by the Regional Bench acting as Regional Special Bench while entertaining their stay application. This Bench took note of the fact that the applicants are a State Government Public Sector Undertaking and live B/E is involved, where the exemption claimed by them was disallowed by the authorities below despite the fact that there is a positive recommendation from the D.G.T.D. to the effect that the machines are eligible for exemption and they are horological machines. Since they would be put to considerable financial hardship and the applicants being the Government Undertaking, the Tribunal in its interim order directed the release of the consignment on provisional assessment basis by taking personal bond without Bank Guarantee. After receipt of the order, the applicants had been meeting the various officers of the Customs for execution of the bond. Since their efforts did not yield any tangible results, they had met the Collector (Judicial) also. Thereafter, the Asstt. Collector, Group 5(A) informed them in his letter dated 16-1-1991 that as per the jurisdiction of the various benches of CEGAT, it seems that the matter of valuation and notification pertains to the Special Benches only, and not to the Regional Bench and hence the order passed by the West Regional Bench cannot be implemented. Hence, they were directed to clear the consignment as per the order of the Collector (Appeals).
Thereupon, the applicants had to move, the Tribunal by this misc.
application. They had also simultaneously written to the Collector pointing out that the letter from the Asstt. Collector is in dis-obedience of the Tribunal and in gross contempt of the statutory appellate authority. The Misc. application filed by the Department on 28-1-1991 is after their aforesaid letter to the Collector and hence the application is mala fide without disclosing all these facts. He also contended that as per para 5 of CEGAT Order No. 19 (Tech.) 1986, dated 15-9-1986, the stay applications in Special Bench matters, which have been filed in the registry of any of the Regional Benches may be heard by the Members of the concerned Regional Benches sitting as the Special Bench. In this case, on account of the impugned order of the lower authority, the applicants were required to deposit a sum of Rs. 76 lakhs being the disputed amount towards the differential duty on account of the denial of the exemption notification and hence they had moved the stay application, which is within competence of the Regional Special Bench to decide as per the aforesaid CEGAT order. Hence, there is no merit in the Department's application.
3. Shri Mondal indicated that the Asstt. Collector Shri N.K. Sharma, who has signed the letter dated 16-1-1991 is also present in the Court as per the direction of this Bench when the matter was mentioned yesterday. The Asstt. Collr. indicated that the aforesaid letter was issued on the direction of the Collector and he had no intention or desire to dis-respect the order of the Bench. He also stated that the order to move the application before the Bench was already passed on 4-1-1991, before the receipt of the letter from the applicants. There was an administrative delay in moving the application and hence no mala fide should be construed against them.
4. Shri Mondal has fairly conceded that as an officer of the Court, he does not find any thing to substantiate that the Bench does not have jurisdiction to entertain the stay applications relating to the Special Bench. In fact, many of the Department's stay applications relating to the Special Bench have been moved by him on behalf of the Department before the Regional Bench. Hence, he does not have anything to say on the nature of the order passed in this case. However, as a representative of the Department and as per the instruction from the Collector, he would submit that the Department has emphasised that only where the demand is issued, and where the stay is to be granted, that could be considered and not a matter like this, where the benefit of exemption has been denied on a live B/E and there is no demand requiring to be stayed. If the goods are to be cleared from the Customs area, the duty as assessed and determined by the authorities is to be paid. The Regional Bench of the Tribunal, not having jurisdiction over classification matters, cannot pass an order directing provisional assessment extending the benefit of exemption notification. He fairly stated that the above argument is put forth as per instructions from the Collector (Judicial).
5. After hearing both the sides, we are constrained to observe that the application moved by the Collector (Judicial) is totally misconceived (if not mischievous or mala fide as put forth by the learned consultant for the importers).
(i) As per para 5 of CEGAT order No. 19 (Tech.) 1986 dtd. 15-9-1986, the stay application relating to Special Bench matters can be heard by the Regional Benches and for this limited purpose they sit as Regional Special Benches.
(ii) Considerations for grant of stay are the establishment of a prima facie case, the need for providing urgent relief and also mainly the financial constraints or hardship in meeting the demand for duty or penalty; (iii) As per the provisions of the CEGAT Procedure Rules, while considering stay application, orders of interim nature as may be necessary and deemed proper can be passed.
(iv) The appellant importer is a State Government, Undertaking and is engaged in the manufacture of watches.
(v) The machines imported are certified by the Industrial Adviser, DGTD, Govt. of India as horological machines recommended for exemption.
(vi) The appellant importers being manufacturers of watches claim to have imported horological machines for their needs and are prepared to furnish the end use bond as per the requirement of the exemption notification.
(vii) The issue relates to a live B/E and because of paucity of funds for meeting the additional demand for the differential duty, the goods still remained uncleared, when they came before the Bench seeking for interim relief.
6. With the aforesaid facts being placed before an officer in a responsible position in the Customs House, similar type of interim order of provisional clearance even at the initial stage of dispute, could have been passed by him in order to ensure that the goods of a State Govt. Undertaking are not held up, involving heavy demurrages. We do not find fault with them for not doing this. But when, the Tribunal, exercising its discretion which it is entitled to so exercise on getting satisfied about the prima facie arguments and sensing urgency of the matter; passed an interim order, we cannot approve of the casual manner exhibited in implementing the order. This attitude smacks of any norms of responsibility. This also indicates that the Collector (Judicial) who is expected to be judiciousin his approach and should have more respect for the judicial forums than others, has chosen to unilaterally conclude that the Regional Bench does not have jurisdiction and hence the interim order passed by that Bench need not be implemented. This is evident from the letter of the Asstt. Collector dated 16-1-1991 reported to have been written by that officer under the instruction of the Collector (Judicial). Even if that Collector has chosen to feel that the interim order has been passed beyond jurisdiction, it was open for the Collector to have moved the application and advised the importer to await the decision of the Bench on their application. Instead, he has allowed the matter to be put in cold storage for more than 45 days and finally decided to move the application that too, after informing the importer that this Bench has passed the interim order without jurisdiction and hence cannot be implemented. We are constrained to feel that this is nothing but a show of contempt for the Tribunal's order. We could have initiated contempt proceedings, but have refrained from doing so.
7. Now, coming back to the question of our jurisdiction we are giving the position only for purposes of record. Even the ld. SDR did not have anything to say that we don't have jurisdiction. Since Regional Benches are empowered to hear stay applications relating to Special Bench matters, they can pass such interim orders, as may be necessary.
Without expressing any final opinion on the merits of the appeal, there is definitely a prima facie case in favour of the appellant importers.
Because the certificate from the DGTD cannot be brushed aside as of no value and there is no dispute that the appellants are watch manufacturers having imported the machines for their use. Because of the decision taken by an appealable order on the B/E, an additional liability to the extent of about Rs. 76 lakhs became payable by the appellants, which they sought for stay, pleading prima facie ground and also financial hardship. The goods were incurring demurrage. Since we have jurisdiction only to hear stay application relating to Special Bench matters, we could not have, on our own, listed the appeal for final hearing, in view of the urgency involved relating to a live B/E.The appellant importer, being a State Government Undertaking, having established a prima facie arguable case in their favour and also their financial hardship in arranging additional funds, are entitled to get the interim relief on such terms as may be prescribed. This Bench could have even granted a blanket stay order. But having regard to the nature of the case involving assessment of a live B/E, with due safeguards being provided to the revenue interest, directed provisional assessment duly covered by a personal bond. The requirement of Bank Guarantee was waived, having regard to the fact that the appellants are State Govt.
Undertaking. Hence, every part of the interim order is not only well founded but also well within the jurisdiction of the Bench.
8. We are constrained to observe that the officer of the Department does not seem to have any sense of urgency in dealing with live B/E cases. If they are sure of their case and wanted to secure the revenue by getting the final decision of the Tribunal, they could have, within this period moved the Special Bench and got the early hearing fixed.
Even the appellant importers are interested in early hearing of their appeal. The Department has not chosen to do this. If there had been any misapprehension in their mind about the correctness of our order, they could have moved the application well in time and need not have waited for over 45 days, making the appellants to run from pillar to post for getting their goods cleared as per the interim order passed by this Bench, in accordance with law.
9. While dismissing the Collector's Misc. Application, we direct that the interim order No. 517/90, dtd. 13-11-1990 be given effect to by the Department forthwith. If the order is not so implemented, the authorities concerned would be exposed to appropriate proceeding under the law apart from facing the possible risk of payment of damages to the importers on account of demurrages on account of delay on their part.