Aggrieved Party Must Get At Least One Hearing On Merits: Supreme Court Restores Customs Appeal
The Supreme Court has recently restored an aircraft operator's customs appeal after it failed to get its claim for a duty exemption examined on merits before any forum. The court held that an aggrieved party must have at least one appellate forum to address its grievances.
“Right of appeal being a precious remedy, Courts shall endeavour to ensure that an aggrieved party has at least one appellate forum to address its grievances,” a bench of Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe observed.
The dispute concerns a customs duty demand of ₹6.25 crore against International Air Charter Operations (I) Pvt. Ltd. for allegedly violating conditions attached to an exemption notification for imported aircraft.
The company imported an aircraft under a customs duty exemption notification dated May 3, 2007. The Customs Department alleged that it operated charter services despite its permit being restricted to passenger services.
In June 2009, the adjudicating authority imposed a customs duty demand of ₹6,24,50,565, along with an equivalent penalty. The company's directors were also each penalised ₹25 lakh.
The company challenged the order before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). In January 2017, the tribunal disposed of the appeal without examining its merits because conflicting decisions on the legal issue were pending before the Supreme Court.
The company subsequently approached the Supreme Court, but its appeals were not decided on merits. The question of law was left open, and the company withdrew the appeals.
The Delhi High Court later dismissed the company's challenge to recovery notices, holding that the original customs duty order had attained finality. CESTAT also rejected the company's request to restore its appeal because it had not obtained permission from the High Court.
The Supreme Court observed that the procedural difficulties had arisen from the company's attempts to get its appeal restored. It held that these difficulties could be resolved by allowing the company to pursue its statutory remedy.
The court set aside the Delhi High Court's orders and restored the customs appeal. It directed CESTAT to decide the matter within three months.
The Supreme Court did not decide whether the company was entitled to the customs duty exemption.
For Appellants: Advocate Akriti Chaubey
For Respondents: Advocate Gurmeet Singh Makker