'Comedy Of Errors': Delhi HC On CESTAT Passing Contradictory Orders In Appeal Which Did Not Meet Its Pecuniary Jurisdiction

“This order reveals a complete comedy of error…The petition reveals an unfortunate situation wherein the CESTAT while intending to correct an error in its initial order…continued to make repeated errors resulting in the impugned order and the present challenge,” a division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta remarked at the outset.

The appeal before the High Court was preferred by a private company engaged in the import of semi-finished Coaxial Cables after CESTAT passed three contradictory orders in the appeal filed by the Customs Department almost a decade ago.

The dispute related to alleged undervaluation and consequent detention of the goods imported by the Petitioner. The Department had raised a demand of Rs.29,66,805/- and it gave the Petitioner an opportunity to redeem the goods subject to payment of a redemption fine to the tune of Rs.20 lakhs.

As the Commissioner (Appeals) allowed the Petitioner's appeal against this order, the Department moved CESTAT.

Initially, the Tribunal dismissed the Department's appeal on account of non-appearance by the Petitioner/Company.

“Strangely, the Revenue's Appeal was dismissed due to the non-appearance of the Petitioner herein,” the High Court noted.

Thereafter, upon an application by the Department, the previously dismissed appeal was restored and CESTAT observed that the Commissioner (Appeals) had failed to cross-examine the Engineer who had certified that the Petitioner had imported the goods in terms of the prevailing international price.

“However, strangely once again, the Revenue's appeal was dismissed when the logical consequence of the said conclusion was to either remand the matter or to fully allow the appeal of the Revenue,” the High Court said.

Once again aggrieved by dismissal of its appeal, the Department moved an application seeking rectification. The CESTAT then recalled the entire order and put up the matter for final hearing.

The High Court said, “such contradictory orders could not have been passed by the CESTAT in the same appeal…The proper course of action would have been for CESTAT to completely re-hear the matter on merits which it has not done.”

It then proceeded to note that for CESTAT appeals, the monetary limit is to the tune of Rs.50 lakhs. However, the amount involved in this case was less than Rs. 50 lakhs.

“Considering that the monetary value in the Appeal before CESTAT is Rs. 29,66,805/- plus Rs. 20 lakhs, which is below the limit fixed for CESTAT appeals, the appeal before CESTAT deserves to be dismissed on this short ground itself,” the Court was prompted to observe.

The Court lamented the dispute, dating back to 2011, was dragged for a decade and the bank guarantee furnished by the Petitioner over 14 years ago was lying with the Department, causing substantial loss to the Petitioner.

Accordingly, the petition was allowed, the appeal filed by the Department before CESTAT was dismissed in view of the monetary limits and the Department was directed to release the bank guarantee furnished by the Petitioner within 8 weeks.

Appearance: Mr. Pradeep Jain, Mr. Sbhubhankar Jha, Mr. Sambhav Jain & Mr.Pranav Raj Singh, Advs for Petitioner; Mr. Aditya Singla, SSC (CBIC) with Mr. Siddharth Saxena, Mr. Ritwik Saha and Mr. Umang Misra, Advs for Respondent

Case title: Jai Durga Rubberised Fabrics India Pvt. Ltd. v. Commissioner Of Customs

Case no.: W.P.(C) 530/2025

Click here to read order https://www.youtube.com/watch?v=pUclgAhCgws&pp=ygUHbGl2ZWxhdw%3D%3D