Commissioner of Customs (Preventive),Bhubaneswar Vs Satish Kumar Subudhi

The instant appeal is filed by the Commissioner of Customs (Preventive), Odisha assailing the Final Order No.76064 of 2024 dated 4^th January, 2024 whereby and whereunder the order passed by the Appellate Authority was set aside.

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Section 130 of the Customs Act, 1962 provides a remedy by way of an appeal to this Court from every order passed by the Appellate Tribunal provided the case involves a substantial question of law.

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Before we proceed to ascertain substantial question of law, which is one of the paramount considerations in admitting the appeal, it would be profitable to adumbrate the significant facts emerged from the record.

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3.1. A team of officers of the Central Preventive Unit, Central Excise and Customs, Bhubaneswar recovered 20 numbers of UBS brand gold biscuits of foreign origin from one Satendro Panda on 18^th August, 1999. Four bills dated 12^th August, 1999 issued by Visakha Bullion Corporation (VBC), Visakhapatnam was produced in support of legal acquisition and possession of the said gold biscuits, which revealed that two bills were issued in favour of K. Prasad Rao Subudhi, one bill in favour of Rana BPRM and another in favour of Pavithra BPRM. After recording the statement under Section 108 of the Customs Act, the said person revealed that those consignments belonged to one K. Prasad Rao Subudhi, who entrusted the same for delivery to Babulal Babu of Cuttack. In course of investigation, the statements of several persons were recorded including the son of the named person, who initially denied any such transactions to have been made. It was further revealed that the aforesaid bills, which were produced at the time of interception, do not contain any reference of UBS brand and because of such discrepancy having noticed, the said consignment was seized and confiscated under Section 111 of the Customs Act.

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3.2. Subsequently, one K. Prasad Rao Subudhi made an application on 23^rd August, 1999 claiming ownership of the seized consignment having purchased from Bherunath Bullion Corporation (BBC) on diverged dates and bills were also produced in support of the same. A show-cause notice was issued on 16^th February 2000, which was duly replied to and the Joint Commissioner of Customs (Preventive) passed an order for confiscation of the said consignment and imposed penalty to the

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tune of Rs.5 lakh on K. Prasad Rao Subudhi under Section 112 of the Customs Act and Rs.50,000/- on said Satendro Panda. The said order was assailed by K. Satish Kumar Subudhi, the respondent herein, before the Commissioner (Appeals), Central Excise, which was eventually rejected and the said order was carried to the Tribunal, who after considering the facts discerned from the record, did not agree with the order impugned before it passed by the Appellate Authority and set aside the same with the categorical finding that the aforesaid four bills tendered by said Mr. Panda is unrelated to the seizure as the same was claimed to have been purchased from SBI, Hyderabad. It was further observed that on further verification it appears that the sale transaction was made to BBC by MMTC and mere non-mentioning of UBS does not invalidate the legal purchase. The MMTC admitted to have raised the invoice in favour of BBC and, therefore, it cannot be said that the respondent has not discharged his onus with regard to the possession of the consignment.

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Based on such undisputed facts, learned counsel for the appellant submits that the bills so produced do not indicate that it is UBS marked biscuits and, therefore, the Tribunal ought not to have proceeded to set aside the order of the Appellate Authority. It is further submitted that the respondent herein failed to discharge the burden casted under Section 123 of the Customs Act to support the possession of the said consignment so recovered and the finding of the Tribunal that the said consignment is not a smuggled one is unsustainable.

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The order passed by the Tribunal vividly and lucidly recorded the facts and the evidence in order to find whether the stand of the appellant is justified and arrived at the conclusion that the respondent has satisfactorily discharged the burden casted on him under Section 123 of the Customs Act in proving the legal possession of the said consignment, more particularly, on a clear admission of the MMTC with regard to the genuineness of the invoices issued in favour of the BBC.

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Though the right of an appeal is provided under Section 130 of the said Act, the High Court may refuse to admit the appeal unless it finds that the case involves a substantial question of law.

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Though the expression “substantial question of law” has not been defined in the said Act, the support can be lent from the other statute, which also contained the similar expression and given its meaning through an authoritative pronouncements. It is to be remembered that there is a noticeable distinction between a “question of law” and the “substantial question of law”. The word „substantial‟ prefixed to the question of law received its importance for having substance, essential, real, of sound worth, important or considerable. It is, thus, something in contradiction with technical or of no substance and, therefore, cannot be regarded as mere academic. Where the question of law is fairly and extensively argued and has been dealt with by the authority extensively, such view is to be given a due regard. It would not involve the substantial question of law if covered by the decision of the Supreme Court or the High Courts. If there is any possibility of two views to be adopted, it may at times involves the substantial

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question of law; but if it brooks no two opinions, it will not cover within the aforesaid expressions.

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7.1. In other words, if the point is debatable and not previously settled by the Court or there is no binding precedent, even in such case, it must relate to a material bearing on the case. In Sri Chunilal V. Mehta & Sons Ltd. v. Century Spinning and Manufacturing Co. Ltd. reported in AIR 1962 SC 1314 apex Court laid down the principles concerning the substantial question of law to be such, which is neither settled nor there is any binding precedent by the Courts. It is further held that the substantial question of law must be such which directly or substantially affect the rights of the parties.

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7.2. The observations made by the apex Court in Santosh Hazari v. Purushottam Tiwari reported in (2001) 3 SCC 179 can be gainfully applied where the Court succinctly laid down the principles relating to a substantial question of law in the following:

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“ 14. A point of law which admits of no two opinions may be a proposition of law but cannot be a substantial question of law. To be “substantial” a question of law must be debatable, not previously settled by law of the land or a binding precedent, and must have a material bearing on the decision of the case, if answered either way, insofar as the rights of the parties before it are concerned. To be a question of law “involving in the case” there must be first a foundation for it laid in the pleadings and the question should emerge from the sustainable findings of fact arrived at by court of facts and it must be necessary to decide that question of law for a just and proper decision of the case. An entirely new point raised for the first time before the High Court is not a question involved in the case unless it

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goes to the root of the matter. It will, therefore, depend on the facts and circumstance of each case whether a question of law is a substantial one and involved in the case, or not; the paramount overall consideration being the need for striking a judicious balance between the indispensable obligation to do justice at all stages and impelling necessity of avoiding prolongation in the life of any lis.”

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It thus appears from the ratio laid down in the above judgment that the substantial question of law must be of such magnitude, which is neither decided earlier nor is there any binding precedent. It would further engulf within itself where the Appellate Court / Appellate Authority fails to take into account the material evidence or have proceeded to decide the matter on the basis of no evidence or have taken a decision contrary to a binding precedent and above all, such questions affect the right of the parties to the proceedings. It does not engulf within itself the reappreciation of facts nor to go deep into every aspect of the evidence, if those are lucidly and explicitly decided by the first Appellate Authority. In the event, the evidence is interpreted in a reasonable manner and a decision has been arrived thereupon, which cannot be said to be perverse, irrational and contrary to the settled proposition of law, the High Court shall not admit the appeal as the same would not come within the ambit of “substantial question of law”.

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The point so raised before us has already been dealt with on the basis of the evidence and, therefore, we do not find that the order impugned in the instant appeal involves a substantial question of law.

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The appeal is, thus, dismissed. No order as to costs.

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(Harish Tandon) Chief Justice

(M.S. Raman)

Judge

M. Panda

Signature Not Verified

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Digitally Signed Signed by: MRUTYUNJAYA PANDA Designation: Secretary, Orissa High Court Reason: Authentication Location: High Court of Orissa, Cuttack Date: 18-Oct-2025 15:30:27

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Commissioner of Customs (Preventive),Bhubaneswar v. Satish Kumar Subudhi

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Commissioner of Customs (Preventive),Bhubaneswar v. Satish Kumar Subudhi

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