M/S Spice Jet Limited vs. The Additional Commissioner Of Customs

The instant Writ Petition has been filed challerrging the Order in Original No. 1 85 12O22IADJN-CUS-ADC, dt. 14.03 .2023 on the file of the Addl. Commissioner Customs, GST LB Stadium i.e., the 1.t respondent herein as confirmed by the common Order-in-Appeal No.HYD-CUS-OOO-APP1 -227 -228-23-24, dt.27.O3.2O24, on the file of the 2'd respondent (Appeals-1), and the consequential Final Order No.A/300 15-30024 12025, dt.2O.O 1.2025 passed by the 3ra respondent - Customs Excise

The brief facts of the case are that the petitioner No.l is a company duly incorporated under the provisions of the Companies Act, having its registered office at Indira Gandhi International Airport, Terminal- lD, New Delhi 1 10037, India, and an additional operational office at 319, Udyog Vihar, Phase-IV, Gurgaon L22Ol6, Haryana. The petitioner No.l is a well- established entity in the aviation and airline industry, carrying on diversified operations including air transportation, warehousing of goods, logistics, and allied trade services, and it has been issued with an [mporter Exporter Code (IEC) bearing No.0593003667. 3. The petitioner No.l entered into a sub-sub-lease deed dt-28.o7.2o21 (hereinafter referred to as the "Lease Deed") with M/s GMR Hyderabad Aviation SEZ Limited (hereinafter referred to as "GHASL") for the establishment of a Free Trade warehousing

It is stated that prior to execution of the kase Deed, the petitioner No.l had obtained approval from the Government of India uide reference No.9-481/SCZ/HYD/2O19l103-SE, dt.Os.O2.2O2O, for establishing a trading unit admeasuring 33,0O0 sq. meters on Acre 1.60 guntas of land within the FTWZ situated at GHASL, Mamidipalli Village, Shamshabad Mandal, Ranga Reddy District, Telangana, and the said approval was extended

It is further submitted that M/s NADFA Trading FZE dispatched 2l consignments of goods to the petitioner's warehouse situated in the FTWZ at Plot No.8F, Survey No.99/1, GMR Aerospace and Industrial Park, GMR Hyderabad Aviation SEZ Ltd., R4fiv Gandhi International Airport, Shamshabad. Out of the said consignments, 14 consignments belonged to one entity and 7 consignments to UIEPL and that the said goods were intended for export to M/s NADFA Trading FZE, Hamriyah Free Zorte, Sharjah, UAE.

While So, basing upon the specific intelligence, the Directorate of Revenue Intelligence (DRI), Hyderabad Zonal Unit, conducted inspection and verification of the goods stored in the 1.t petitioner's premises, and found 667 cartons covered under 7 invoices pertaining to M/s UIEPL, wherein the goods declared were Leather Belts and Leather Wallets, with a total declared value r'

It is further stated that upon investigation, it was alleged that neither the goods nor the staff were present at the premises at the relevant time and that no supporting business records were available at the registered premises, and were in fact, non-existent entities. Based on the said valuation report, the Additional commissioner of customs called upon the petitioner to submit relevant documents for verification. The petitioner duly furnished all documents as required. Upon scrutiny, it was obsenred by the respondent authorities that the tax invoices issued by M/s UIEpL contained endorsements indicating an intention to claim benelits under the RODTEP scheme. However, the sEZ online system reflected that the exports were filed under duty drawback claims.

Subsequently, a show-cause notice dt.ol.or.2022 was issued to the lst petitioner, to which reply dt.2g.or.2o22, was submitted by the petitioners. However, it is contended by the 6 petitioners that without properly considering the said reply and without affording a reasonable opportunity of being heard, the 1"t respond.ent passed order-in-originat No.185/2o22-ADJN-cus- ADC, dt.14.03 .2023, hotding that the goods were undervalued and ordered the goods to be confiscated with an option of redemption upon payment of a fine of Rs.5 lakhs. Further, imposed penalty of Rs.1,oo,o0,0o0/- each under section 114(iii) of the customs Act, 1962 on sri Mohd. sabahuddin, M/s uIEpL, and its directors. In addition to the said penalties, separate penalty of Rs.S lakhs each was imposed under section 114AA on sri Mohd. sabahuddin, M/s UIEPL, and its directors and also a penalty of Rs.S lakhs each under Section 114(iii) on the petitioners.

Aggrieved by the said order-in-original, the petitioners preferred appeal before the 2"a respondent in Appeal Nos.HyD- cus-000-APP-l-227 and 228-23-24. However, the said appeals c€une to be dismissed by common order, dt.27 .o3.2o24, on the ground of limitation. Thereafter, the petitioners preferred further appeals before the 3.d respondent by way of customs Appeal Nos.30748-3o757 of 2024, upon payment of the mandatory pre- deposits. The 3.d respondent, by its common Final order, upheld the decision of the 2'd respondent.

It was observed by both the 2nd and 3'd responderrts/appellate authorities that the Orders-in-Original, dt.14.03.2o23, was servcd upcn the petitioners on 20.03.2023 and as such the appeals ought to have been filed w-ithin the statutory period prescribed under the Customs Act, 1962, i.e., within 60 days, extendable by a further period of 30 days cond.onation at the discretion of the Commissioner (Appeals), however, the petitioners had filed the appeals on 03.10.2023 af,ter tlre commullication of the Orders-in-Original on 2O.O3.2O23. Consequently, the 2"d respondent i.e., Commissioner (Appeals) dismissed the appeals as time-barred, without going into the merits of the case, by common order, dt.03.1O.2O23. On further appeal preferred there-against, the 3.d respondent held that the 2nd respondent had no power to condone delay beyond the statutory period prescribed under the Act and, therefore, found no infirmity in the order passed by the 2"d respondent, and thus, both the appellate authorities refused to entertain the appeals beyond the prescribed period of limitation as envisage under section 128 of the Customs Act, 1962. 1 1. It is further contended that, both the appeals were rejected solely on the ground of limitation, without a proper adjudication

Heard Sri Mayur Reddy, learned Senior Counsel appearing for the petitioners and Sri Domenic Fernantdez, the learned Senior Standing Counsel appearing for the respondents.

Sri Mayur Reddy, learned Senior Counsel appearing for the petitioners, contended that the appeals filed under the provisions of the customs Act, L962 ought not to have been rejected at the threshold without proper determination of the factual issues. It is submitted that the 2nd and 3'd respondents, being appellate authorities, empowered to appreciate the factual matrix of the case, ought to have entertained the appeals and adjudicated the matter on merits, as the delay was properly explained. Instead, rejected the appeals solely on the technical ground of limitation, thereby defeating the legitimate right of the petitioners to challenge the original orders.

The learned Senior Counsel further contended t]lat when the statute provides a right of appeal, such right should not be t

It is further contended that-although section 128 of the Customs Act, 1962 prescribes a limitation period of 6O days for filing an appeal, with a further condonable period of 3O days by 10 the appellate authority, the restriction placed on condonation of delay beyond the said period is over restrictive or unduly rigid, and that such restriction should not be construed in a manner so as to restrict the substantive right of appeal, more so, when the said period is not mandatory but only a procedural in nature.

In support of the aforesaid contentions, learned Senior Counsel for the petitioner placed reliance on the judgments of the Honble Supreme Court in Mukhee Gopo,lan us. Cheppllattrruthanpuragial Aboobackert, Tdta Steel Llmited, us. Rajkumar Banerjee qnd others2, Nqtlonq.l Insurance Compang Ltd,. as. Pranay Sethi qnd otherss, Goaentment of Mahqrq.shtrq. (Water Resources Department) represented bg Exectrtiue Engineer us. Burse Brothers Engineers and Contractors Priaate Limiteda, along with the judgment of the Honble High Court of Karnataka in the case of sri Kanakadurga Deaelopers us. Assistant Commissl.oner of Sentice Tqx and other# and the Hon'ble High Court of Bombay in Naaabharat t 1995 (5) SCC s 2 2025 SCC Online SC 1042 3 (2ot7l 16 SCC 680 4 2021(6) SCC 460 s (2018) (3se) ELT 286 (AAR) f-t

It is also contended that it is trite law that this Court, in exercise of its powers under Article 226 of the Constitution of India, can intervene in appropriate cases to prevent injustice. Thus, in the instant case, even if the appellate authorities are held to have no power to condone delay beyond the statutory period of 6 2015 SCC Online BOM 8592 t

The learned senior counser thus submits that in the circumstances of the case, this court can condone the delay and remit the matter to the 2"a respondent for consideration on merits, or in the alternative, adjudicate the matter in the present writ petition itself, so as to put a quietus to the dispute and afford an opportunity to the petitioners to estabrish their case, substantially. 20' Per contra, the rearned senior Standing counser, Sri Domenic Fernandez, appearing for the respondents, contended that once a statute prescribes a specific period of limitation, particularly under the customs Act , 1962, the same is binding and must be strictly adhered to. It is further submitted that the section 128 of the customs Act prescribes a rimitation period of 60 days, with a further condonable period of 30 days, and the 2ra

The learned Senior Standing Counsel further placed reliance on the judgment of the Hon'ble Supreme Court in Asststcnt Commissloner (CT), LTII, Kakino,dd & Ors. us. M/s, Glaxo Tra 7 (20 17) 5 SCC 42

It was further contended that when an efficacious alternative remedy is available under the statute, the High court cannot entertain a writ petition and may non-suit the petitioner on that ground alone, for the reason that, if a party approaches the Honble High Court after expiry of the maximum limitation period prescribed under the statute, the Court cannot disregard such statutory limitation and entertain the petition as a matter of right.

The learned Senior Standing counsel thus contended that the wide powers conferred on this Court under Article 226 cannot be exercised in a manner that defeats or overrides the legislative intent. Further, placing reliance on the principles laid down by the / I 2O2O (19) SCC 681 /

Having given earnest consideration to the submissions made by the learned counsel apPearing on either side, perused the material on record.

On a perusa-l of the pleadings of both sides, it is evident that for the alleged violations attributed to the petitioners, the original authority initiated proceedings, which culminated in Order-in- Original No. lai: / 2O22l ADJN-CUS-ADC, dt. 1 4. 0 3.2023' Aggrieved thereby, the petitioners preferred appeals before the 2nd respondent and 3'd respondent, which were dismissed. However, it is not in dispute that there was a delay in filing the said appeals before the 2"d respondent.

Under the provisions of Section 128 of the Customs Act, 1962, an appeal is required to be filed within a period of 6o days from the date of communication of the Order-in-Original, with a t6 further condonable period of 30 days by the appellate authority at its discretion. Thus, the total permissible period for entertaining €u1 appeal is 60 + 30 days and beyond the said period, the appellate authority does not have juri iction to condone the delay or entertain the appeal. 28- In the present case, the petitioners, admittedly, filed the appeals before the 2nd respond.ent on 03.10.2023 after the communication of the orders-in-originat on 20.03 .2023, and in view of the statutory limitation, the 2'd respondent declined to entertain the appeals as it lacked juri iction to condone the delay beyond the prescribed period. The 3.a respondent, upon further appeal, examined the issue within its limited scope and uphetd the decision of the 2.d respondent, holding that the rejection of the appeals on the ground of limitation was in accordance with law. 29. [n view of the above, it stands established that both the appellate authorities have acted strictly in accordance with the statutory scheme of limitation, and the contention of the learned Senior Counsel for the petitioners that the appellate authorities ought to have entertained the appeals despite the delay cannot be /

Further reliance has been placed on M/s Glaxo Smlth Ktine Consumer Health Care Limlteds case(supra), wherein it has been held that the High Court, in exercise of juri iction under Article 226 of the constitution of India, should not ordinarily entertain writ petitions so as to circumvent statutory remedies, particularly when the delay in availing such remedies is beyond

It is not in dispute that the ratio raid down in the aforesaid judgments is fulry appricable to the extent that the appellate authorities were justified in rejecting the appeals as time_barred. 33' However, the applicability of the said judgments is required to be understood in the context in which they were rend.ered. The Honble Supreme court, in the above decisions, did not lay down an absolute bar on the exercise of juri iction under Article 226 of the constitution of India in ail cases invorving delay. The said decisions primarily caution against routine interference and emphasize that statutory timelines shourd not be rightly disregarded. 34' on the other hand, the various judgments relied upon by the learned senior counser for the petitioners, as noted in the earrier paragraphs, would show limitation, are intended to that procedural laws, including advance justice and not defeat substantive rights. while those judgments ray down general principles favoring a liberal approach in appropriate cases, tJrey

Neve.theless, the broader prirrciple emerging from the said precedents, that technicalities . should not defeat substantive justice, rernains rerevant while exercising constitutionar juri iction under Article 226. 36. The principal grievance of the petitioners is that they have been deprived of an opportunity to have their case examined on merits by the appellate authority, particularly when the statute provides a right of appeal, and denial of such right has resulted in failure of substantive justice, as the issues involved require proper appreciation of facts and evidence.

It is well-settled legal position that when a statute prescribes a specific period of limitation along with a limited power of condonation, the authorities constituted under the statute are bound by such limitation and cannot travel beyond it. At the same time, it is equally settled that the procedural prescriptions relating to limitation are intended to regurate the exercise of rights and not 20 to extinguish substantive rights, especially where the consequences of non-adjudication on merits would result in apparent injustice.

Though the contention of the learned Senior Counsel for the petitioners that the provisions of the Limitation Act, 1963, would automatically extend the period of limitation under the Customs Act, 1962, is not accepted, we are of the considered view that, in exercise of extraordinary juri iction under Article 226 of the Constitution of India, this Court can intervene in appropriate cases to ensure that technicalities do not defeat the ends of justice.

In the instant case, though the delay exceeds the statutorily condonable period, is not of such a nature as to indicate deliberate inaction or lack of bona fides. On the contrar5r, the petitioners have pursued the matter by availing the appellate remedies, albeit belatedly, raising issues which require factual adjudication and which have not been examined at all by the appellate authority on merits. In such circumstances, denial of such opportunity would result in foreclosing the petitioners' statutory remedy of appeal without any adjudication on the 21 substantive issues involved and a g'ave injustice would cause to thepetitioners,whilerightofappealisprovidedbythestatutefor fair justice.

Accordingly, while not interfering with the legal position governing limitation under the Customs Act, 1962, and in exercise of juri iction under Article 226 of tirle constitution of India and in thefactsandcircumstancesoftlrepresentcase,wesetasidettre order in appeal No.HYD-CUS-OOO-ATP1-227 -228 dt'27'O3'2024' on the file of the 2nd respondent (Appeals- 1), and the consequentialfinalorderNo.A/30015-30024/2025,dt'20'Ol'2025 passed by the 3'd respondent, insofar as the Order in Original No. 185 / 2O22IADJN-CUS-ADC, dt. 14' 03'2023, is concerned' by condoning the delay occurred in filing the appeal before the 2"4 respondent, subject to the condition of the petitioners paying a sum of Rs.25,0OO/-(Rupees Twenty Five thousand) to the Telangana State Lega1 Services Authority, within a period of two (02) weeks from todal'.

Upon such payment, the petitioners shall approach the 2"d respondent and file an appropriate memo enclosing proof of payment and, on such compliance, the 2'd respondent shall 22 restore the appeal No.HYD-CUS-000-ATP1 -227-225 to its lile and adjudicate the same afresh on merits, after affording reasonable opportunity to both parties, strictly in accordance with law.

With the above directions, the Writ Petition is partly allowed. As a sequel, miscellaneous applications pending, if any, shall stand closed. . NAYANI CHANDRA SEKHAR RAO DEPUTY REGISTRAR //// SECTION OFFICER To 1. The Additional Commissioner Of Customs, Basheerbagh, Hyderabad- 500004. 2. The Commissioner Of Customs And Central Tax Stadium Road, Basheerbagh, Hyderabad- 500004. 3. Customs Excise And Service Tax Appellate Tribunal, Southern Regional Bench, HMWSS Building Khairatabad, Hyderabad- 500004. 4. One CC to SRI GIRJESH PATIDAR, Advocate IOPUC]

One CC to SRI DOMINIC FERNANDES, SENIOR STANDING COUNSEL FOR cBrc IoPUC]

Two CD Copies PSK..- TKS \CK s-l LB Stadium Road, ), GST Bhavan, LB