1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. WRIT PETITION NO.493 OF 2000 M/s.Wall Street Finance Ltd. a company incorporated under the Companies Act, 1956, having its registered office at Natasha, 52, Hill Road, Bandra (West), Mumbai- 400 052. .. Petitioner v/s. 1. Union of India (through the Joint Secretary, Ministry of Law, Justice and Company Affairs, Aayakar Bhawan, M.K.Road, Churchgate, Mumbai 400020. 2. The Customs, Excise and Gold Control Appellate Tribunal, West Zonal Bench, PNB House, Sir P.M.Road, Mumbai 400 001. 3. The Commissiioner of Customs (Preventive), New Custom House, Ballard Estate, Mumbai 400 038. 4. The Assistant Director, DRI, Mumbai Zonal Unit having his office Hotel Waldrof, 16, Arthur Bunder Road, Colaba, Mumbai 400 005. 5. The Reserve Bank of India, Exchange Control Department, Central Office Building, Mumbai 400 023. Mr.Vikram Nankani i/by Mr.M.G.Gawade for the petitioner. Mr.S.S.Pakale i/by Mr.R.N.Bandopadhyay for the respondents. 2 CORAM : R.M. LODHA & J.P.DEVADHAR, JJ. DATED : 25TH APRIL, 2006. ORAL JUDGMENT (Per R.M.Lodha, J.) The short question that arises in this writ petition is: whether the order dated 3rd February, 2000 passed by the Customs, Excise and Gold (Control) Appellate Tribunal is a decision in the eye of law? 2. Bereft of unnecessary details for consideration of the aforesaid question, the relevant facts may be noticed by us first. 3. The Commissioner of Customs (Preventive), Mumbai issued a show-cause notice dated 4.11.1997 to 12 parties specifically and others known or unknown persons generally calling upon them to explain as to why: (i) assorted foreign currency including TCs amount of Rs. ,43,57,730.15 seized on 27.5.97 on board `Ya Hajipir'. (ii) amount of Rs.58,02,000 seized on 2.6.97 lying in the pay order account of M/s.TTC in Union Bank of India, Versova Branch. (iii) amount of Rs.10,01,010 seized on 2.6.97 lying in the pay order account of M/s.TTc in Syndicate Bank, Jogeshwari Branch. 3 (iv) amount equivalent of US $ 1,07,450 (Rs.38,57,455 @ 35.9) available with WSFL. (v) amount equivalent to US $ 2,92,850 (Rs. 1,05,13,35 $ 35.9) available with M/s.AFS. (vi) amount of Rs.54,75,750 belonging to M/s.TTC and Riyaz Arif Retiwala and unauthorisedly adjusted by M/s.WSFL against liabilities of M/s.TTC. (vii) amount of Rs.9.5 lakhs seized on 31.10.97 lying in the fixed deposit account of M/s.TTC in Union Bank of India, Versova Branch. (viii) amount of Rs.1,25,259.68 seized on 31.10.97 lying as closing balance in the current account number 30033 of M/s.TTC in Union Bank of India, Versova Branch. (ix) amount of Rs.1,06,150 seized on 28.5.97 from the premises of M/s.TTC. (x) amount equivalent of US $ 1200 (Rs.43,080 @ 35.90) seized on 28.5.97 from the premises of M/s.TTC. (a) should not be confiscated under the provisions of section 121 as also under section 113 (d) of the Customs Act, 1962. (b) the country craft `Ya Hajipir' having registration No.MNV-1048/mandvi seized on 29.5.97 which was used for smuggling of the foreign currency seized on 27.5.97 on board the country craft should not be confiscated under section 115 of the Customs Act, 1962. The said country craft `Ya Hajipir' having being released provisionally under bond, the bond should not be enforced. (c) 470 M.T. of cargo of onions on board `Ya Hajipir' 4 which was used for concealing the bag containing foreign currency/TCs, which was seized on 29.5.97, should not be confiscated under section 115 of the Customs Act, 1962. The said 470 M.T. Of onions having being released for export provisionally under bond, the bond should not be enforced. (d) the hassein cloth bag and the other packing material which were used for packing the seized foreign currency, should not be confiscated under section 118 of the Customs Act, 1962. (e) penalties should not be imposed on each of them under the provisions of section 114 of the Customs Act, 1962 for the offences relating to smuggling of foreign currency and TCs aforesaid valued at Rs.13 crores approximately over a period of time, which includes the seized amounts as mentioned in (a) above.” 4. The present petitioner being one of the noticees responded to the show-cause notice by filing reply on 24.4.1998. 5. Interalia, the petitioner set up the case that they carry on the business of Full-fledged money Changers (for short, `FFMC') and are duly licenced by Reserve Bank of India as FFMC from the year 1991-92. The said license was granted to the petitioner under section 7 of the Foreign Exchange Regulations Act, 1973 (for short `FERA') and was renewed by the Reserve Bank of India from time to time. As part of their business operations, the petitioner is permitted to stock and sale VISA brand Travelers Cheques (for short `TCs) of Arab Financial Services (for short 5 `AFS'). The petitioner got permission from Reserve Bank of India (RBI) to sell visa brand TCs of AFS and also have permission from RBI to sell blank TCs of the said brand to other FFMCs in India. For the stocking of the TCs of the said brand, AFS has appointed the petitioner as their agent in India. Under the permission from RBI and with the consent from AFS the petitioner appointed two sub-agents namely M/s.Time Travel and Cargo (TTC) and M/s.Mohamedi Exchange Bureau as its sub-agents for stocking and selling the TCs of the said brand. The sub-agents were also FFMCs licenced by RBI. As per the arrangement between the petitioner and TTC, blank stock of TCs would be issued to TTC at any given time within the over all limit agreed. The TCs were to be sold by TTC as per the terms and conditions of the licence granted to TTC as FFMC by RBI and as per the guidelines and instructions given in the memorandum of instructions issued by RBI from time to time. The petitioner claims to have neither any control over them nor kept any check on such transactions of sale by TTC. It was submitted that the amount of Rs.68,00,000/- was received by way of pay orders in the normal course of its said business with TTC and by unlawfully seizing the said two pay orders of Rs.68,00,000/-, the petitioner was unable to realise the the said amount. The petitioner vehemently opposed the proposed confiscation under section 113(d) and 121 of the Customs Act and the penalty under section 114 of the said Act. 6 6. The Commissioner of Customs (Preventive) recorded the evidence and after hearing the concerned parties, on 23rd June, 1998 passed the following order: (a) I order confiscation of seized assorted foreign currency including TCs (Sr.No.108 4702 526 301 to 440 for US$ 70,000) amounting to Rs.1,43,57,730.15 seized on 27.05.1997 on board `Ya Hajipir' under section 113(d) and 113(f) of the Customs Act, 1962. No order of redemption is given as nobody has come forward to claim the same. (b) I order confiscation of country craft Y-Hajipir having registration No.MNV-1048/Mandvi seized on 29.05.1997 valued at Rs.70 Lakhs under the provisions of section 115 of the Customs Act, 1962. Since the said country craft was released provisionally under Bond and is available for confiscation, I order and amount of Rs.5 lakhs be appropriated in lieu of fine for confiscation. (c) I order for release of 470 M.T. Cargo onions valued at Rs.25 lakhs seized on 29.05.1997 on board `Ya Hajipir'. The said cargo was released provisionally to the respective exporters and hence I order for discharge of their liabilities and order for return/refund of bond and cash securities. (d) I order absolute confiscation of the hessair cloth bag and the other packing material having no commercial value which were seized on 27.05.1997 under section 118 of the Customs Act, 1962. 7 (e) I order confiscation of the amount of Rs.58,02,000/-, seized on 2.6.1997 lying in the pay order account of M/s.TTC in the Union Bank of India, Versova Branch and the amount of Rs.10,01,010/- seized on 2.6.1997 lying in the order Account of M/s.TTC in Syndicate Bank, Jogeshwari Branch under the provisions of Section 121 of the Customs Act, 1962. Out of this amount, pursuant to the order of Hon'ble Supreme Court of India in Special Leave to Appeal (Civil) No.793/98, an amount of Rs.68,00,000/- was put in Fixed Deposit vide FD No.5520758 dated 20.5.1998 with Union Bank of India, Hill Road Branch, Bandra West in the joint names of Assistant Director, DRI, Mumbai and M/s.Wall Street Finance Ltd., I hereby order that the said amount alongwith the interest accrued on the said fixed deposit shall be confiscated to Govt.account forthwith. I also order confiscation of 2,000/- and Rs.1,010/- being the bank charges paid by M/s.TTC from their accounts maintained at respective banks for obtaining the pay orders. (f) In view of my findings above, the amount equivalent to US $ 1,07,450/- (Rs.38,57,455/- @ 35.9) and US $ 2,92,850 (Rs.1,05,13,315 @ 35.9) I do not order confiscation of the same. (g) In view of my findings above, only an amount of Rs.23,00,000/- out of total amount of Rs.54,75,750/-, can be identifiable with the sale proceeds of smuggled TCs and therefore, I order confiscation of Rs.23,00,000/- under the provisions of section 121 of the Customs Act, 1962- M/s.Wall Street Finance Ltd. shall pay the said amount forthwith. (h) I order confiscation of Rs.9.5 lakhs (alongwith accrued interest if any) seized on 31.10.97 lying in the fixed deposit account of M/s.TTC in Union Bank of India Versova Branch under the provisions of section 121 of the Customs 8 Act, 1962. (i) I order confiscation of Rs.1,25,259.68 seized on 3.10.97 from the current account NO.30033 of M/s.TTC in Union Bank of India, Versova Branch under the provisions of section 121 of the Customs Act, 1962. (j) I order release of an amount of Rs.1,06,150/- seized on 28.05.1997 from the premises of M/s.TTC. I also order release of blank TCs seized from the premises of M/s.TTC on 28.5.97 amount to US $ 1200. (k) I order keeping the proceeding in abeyance in respect of M/s.Arab Financial Services. 6. Under section 114 of the Customs Act, 1962, I also impose penalties to following persons/firms. 1. Shri Suleman Esmail Karani : Rs.5 Lakhs (Five Lakhs) 2. Shri Harun Esmail Karani : Rs.5 Lakhs (Five Lakhs) 3. Shri Riyaz Arif Retiwala : Rs.15 Lakhs (Fifteen Lakhs) 4. Shri Savio Fernandes : Rs.15 Lakhs (Fifteen Lakhs) 5. Shri Mohd.Iqbal Kapadia : Rs.10 Lakhs (Ten Lakhs) 6. M/s.Time Travel & Cargo : Rs.35 Lakhs (Thirty five lakhs) 7. M/s.Wall Street Finance Ltd. : Rs.20 Lakhs (Twenty lakhs) 8. Shri Farooq Razak Dhanani : Rs.1,000/- (One thousand) 9. Shri Sanjay Bansilal Gavit : Rs.1,000/- (One thousand) 7. I do not impose any penalty on (1) Smt,Hanifbai Ahmed Juneja, (2) M/s.Indo Gulf Aqua Culture Pvt.Ltd., (3) M/s.Haji Hasan Trading Co. and (4) M/s.Sagar Exports. 8. I further order that the amounts not confiscated and released to M/s.TTC/Riyaz Arif Retiwala shall adjusted against the fine and penalties imposed on them in this order. 9 9. This order is passed without prejudice to any other action that may be taken in respect of the goods in question and/or for the persons/firms/companies concerned covered and not covered under the provisions of the Customs Act, 1962 and/or any other law for the time being in force in the Republic of India.” 7. Upset by the order in original passed on 23rd June, 1998, the present petitioner preferred appeal before the Customs, Excise and Gold (Control) Appellate Tribunal (for short `The Tribunal'). The appeal was heard by two Member Bench comprising of Shri J.H.Joglekar, Member (Technical) and Shri G.N.Srinivasan, Member (Judicial). The Member (Judicial) held that the present petitioner (appellant therein) had no locus to maintain the appeal. In so far as challenge to the confiscation was concerned, Member (Judicial) held that the money which has been confiscated in the hands of the banks represents the value of the TCs sold by TTC through Ratiwala and the same have been paid through the bankers' pay order to the appellant (present petitioner); the pay orders have not been cleared and, therefore, it is the bank's money and in that view of the matter, the appellant (present petitioner) has no locus standi to maintain the appeal. 8. The Member (Technical) did not agree with the view of the Member (Judicial) and held that the appellant (present petitioner) has locus standi to file appeal. The Member (Technical), accordingly, proceeded to deal with the appeal on merits and 10 dismissed the same. 9. It would be, thus, seen from the order of the Tribunal that one Member of the Bench i.e. Member (Judicial) did not consider the merits of the order in original and decided to dismiss the appeal on the ground that the appellant did not have standing to maintain the appeal. On the other hand, the Member (Technical) held that the appeal preferred by the appellant was maintainable but found no merit in challenging the correctness of the order in original. In other words, there was difference of opinion amongst the two members of the Bench that heard the appeal on the question of locus standi. On the merits of the case, there is decision by the one Member of the Bench only as the other member did not go into the merits. Surely, such decision is no decision in the eye of law. For ought we no if the Member (Judicial) had gone into the merits, what would have been his decision. 10. The question, now, is whether the petitioner could maintain the appeal aggrieved by the order in original dated 23.6.1998. In case the present petitioner had no locus to maintain the appeal, in exercise of extraordinary jurisdiction, we would not like to remand the matter to the Tribunal but if we hold otherwise, then matter shall have to be remitted back to the Tribunal. 11 11. The order in original dated 23.6.1998 came to be passed pursuant to the show cause notice dated 4.11.97. The petitioner (appellant before the Tribunal) was one of the noticees. The order in original dated 23.6.1998 served upon the petitioner records that the appeal lies against the said order. 12. Section 129A of the Customs Act provides for an appeal to the appellate tribunal at the instance of any person aggrieved interalia from the decision or order passed by the Commissioner of Customs as an adjudicating authority. Section 129A to the extent it is relevant reads thus- 129A. Appeals to the Appellate Tribunal.-(1) Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order- (a) a decision or order passed by the [Commissioner of Customs] as an adjudicating authority; ........................................ (3) Every appeal under this section shall be filed within three months from the date on which the order sought to be appealed against is communicated to the [Commissioner of Customs], or as the case may be, the other party preferring the appeal. 12 13. The order in original dated 23rd June, 1998 is by the Commissioner of Customs as an adjudicating authority and therefore, covered by clause (a). Is the petitioner a “person aggrieved” by the order in original. 14. In the case of Northern Plastics Ltd. v. Hindustan Photo Films Mfg.Co.Ltd., 1997 ELT 502, the Supreme Court considered the term `person aggrieved' in section 129A. It was held by the Supreme Court thus- “The aforesaid provisions of the Act leave no room for doubt that they represent a complete scheme or code for challenging the orders passed by the Collector (Customs) in exercise of his statutory powers. It is axiomatic that the importer against whom the Collector has passed the impugned order of adjudication and who is called upon to pay the customs duty which, according to him, is not payable is certainly an `aggrieved person' who can prefer an appeal under Section 129A(1) of the Act. So far as departmental authorities themselves are concerned including the Collector of Customs no direct right of appeal is concerned on Collector to prefer appeal against his own order before the CEGAT. However there is sufficient safeguard made available to the Revenue by the Act of or placing in challenge erroneous orders of adjudication as passed by the Collector of Customs by moving the Central Board of Excise and Customs under Section 129D(1) for a direction to the Collector to apply to the CEGAT for determination of such point arising out of the decision or order as may be specified by the Board of Revenue in this connection. Similarly a statutory remedy is provided to the Collector of Customs in connection with orders of the Appellate Collector of Customs passed immediately before the appointed day and also in connection with the orders passed by Collector of Customs under Section 128A, to direct proper officer to appeal on his behalf as laid down by 13 Section 129A(2). Revisional powers are also conferred on the Central Board of Excise and Customs against the orders of Collectors of Customs as provided by Section 129DA(1) as well as on the Central Government under contingencies contemplated by Section 129DD(1). These are the only statutory modes contemplated by the Act by resort to which the orders of Collector (Customs) could be brought in challenge before higher statutory authorities including the CEGAT. In the light of this statutory scheme, therefore, it is not possible to agree with the contention of learned counsel for the contesting respondents that sub-section (1) of Section 129A entitles any and every person feeling aggrieved by the decision or order of the Collector of Customs as an adjudicating authority, to prefer statutory appeal to the Appellate Tribunal. Neither the Central Government, through Industries Department, nor the rival company or industry operating in the same field as the importer can as a matter of right prefer an appeal as `person aggrieved'. It is true that the phrase `person aggrieved' is wider than the phrase `party aggrieved'. But in the entire context of the statutory scheme especially sub-section (3) of Section 129A it has to be held that only the parties to the proceedings before the adjudicating authority Collector of Customs could prefer such an appeal to the CEGAT and the adjudicating authority under Section 122 can prefer such an appeal only when directed by the Board under Section 129D(1) and not otherwise. It is easy to visualise that even a third party may get legitimately aggrieved by the order of the Collector of Customs being the adjudicating authority if it is contended by such a third party that the goods imported really belonged to it and not to the purported importer or that he had financed the same and, therefore, in substance he was interested in the goods and consequently the release order in favour of the purported importer was prone to create a legal injury to such a third party which is not actually arraigned as a party before the adjudicating authority and was not heard by it. Under such circumstances such a third party might perhaps be treated to be legally aggrieved by the order of the Collector of Customs as an adjudicating authority and may legitimately prefer an appeal to the CEGAT as a `person aggrieved'. That is the reason why the Legislature in its wisdom has used the phrase `any person aggrieved' by the order of Collector of 14 Customs as adjudicating authority in Section 129A (1). But in order to earn a locus standi as `person aggrieved' other than the arraigned party before the Collector of Customs as an adjudicating authority it must be shown that such a person aggrieved being third party has a direct legal interest in the goods involved in the adjudication process. It cannot be a general public interest or interest of a business rival as is being projected by the contesting respondents before us.” 15. The phrase `person aggrieved' has been held a wider term than `party aggrieved'. Sub-section (3) of section 129A confers right of appeal only to the parties to the proceedings before the adjudicating authority. A third party could earn a locus standi to file appeal as `person aggrieved' only if it is able to show that it has a direct legal interest in the goods involved in adjudication, such as a party contending that the said goods really belonged to it and not to purported importer. In so far as present case is concerned, the petitioner (appellant therein) was a party to the proceedings before the adjudicating authority. The petitioner was given show cause notice by the adjudicating authority; In response thereto, the petitioner filed reply and objected to the confiscation as well as penalty though the objections of the petitioner were overruled. In this fact situation and in the light of the provisions contained in sub-section (3) of section 129A of the Customs Act, 1962, the petitioner cannot be said to have no locus to maintain the appeal against the order in original dated 23.6.1998. The Member (Judicial) seriously erred in holding that the present 15 petitioner had no locus to maintain the appeal. The whole approach of the Member (Judicial) in looking into the standing of the present petitioner in maintaining the appeal from the point of view that the amount of Rs.68,00,000/- deposited by the present petitioner by way of pay order has not been realised and, therefore, the petitioner could not maintain the appeal was misconceived. 16. In view of what we have said above, it is not necessary for us to go into the correctness of the view taken by the larger Bench of the Tribunal in the case of Weizmann Ltd. & anr. v. CC (Prev.), Mumbai, 2005 (126) ECR 282 and the other decision in the case of R.R.Sen & Brothers v. Commissioner of Customs, Mumbai, 2001 (128) ELT 187. In so far as present case is concerned, we have no hesitation in holding, for the reasons that we have indicated above, that the present petitioner had locus standi to maintain the appeal before the Tribunal against the order in original dated 23.6.1998. 17. The result of the aforesaid discussion is that we set aside the order of the Tribunal dated 3.2.2000 and restore the appeal No.C/688/98-Bom, M/s.Wall Street Finance Ltd. v. Commissioner of Customs (Prev.), Mumbai to the file of the Customs, Excise and Service Tax Appellate Tribunal, West Regional Bench at Mumbai for fresh hearing in accordance with law. The parties are directed 16 to appear before the Tribunal on 29th May, 2006. The Tribunal may hear the appeal on that day or fix any other date that may be convenient for deciding the appeal expeditiously. The interim arrangement regarding the custody of Rs.68,00,000/- and the bank guarantee of Rs.23,00,000/- furnished by the petitioner shall remain operative until the disposal of the appeal by the Tribunal and for a period of two months thereafter. No costs. (R.M.LODHA, J.) (J.P.DEVADHAR, J.)