The appeal was filed before the Hon’ble High Court against the order of the CESTAT. The Revenue contented that the contention raised by the revenue was not discussed and the order was cryptic and un reasoned. No reference was made to the judgement cited by revenue.

The Hon’ble Court held that the order is in breach of principles of natural justice. There is no discussion with respect to rival submissions made by the parties. There is no consideration or any discussion with regard to the nature of goods imported, Exim policy or clauses thereof.

The first paragraph of the order was a preamble to the order,  whereas the second para of the order refers to the findings given by the adjudicating Commissioner, whereas third para takes notice of the definition of word “goods” and finally in fourth para conclusive finding without there being any threadbare discussion is recorded. The Court held that such order cannot be said to be a reasoned order with application of mind.

The Court further observed that when the said judgment was cited before the Tribunal, it was expected on the part of the Tribunal either to consider the said judgment or distinguish it or to refer it to the larger Bench if contrary view was warranted.

The Tribunal should bare in mind that the judgments of the Tribunal were subject to scrutiny by high Courts, especially, in exercise of appellate jurisdiction and/or writ jurisdiction. The higher Courts are expected to read the mind of the lower Authority. In absence of reasons, it become difficult for the higher Courts to consider the issue involved in the case and the view taken therein. Reasons substitute subjectivity by objectivity. Right to reason in an indispensable part of sound judicial system, reasons at least sufficient to indicate an application of mind to the matter before court. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made, in other words, a speaking out. The order was set and matter was remanded for fresh disposal.