2010 (5) TMI 632 - HC - Customs

Demand - order passed asking for further payment of duty without taking into account the duty already paid - Held that - order passed without complying with principles of natural justice was liable to be set aside order cannot be sustained. The same is set aside with liberty to pass a fresh order in accordance with law

Summary

Issues: Quashing of order under the Customs Act, compliance with principles of natural justice, service of notices under Section 153 of the Act.

Quashing of Order under the Customs Act:
The petition sought the quashing of an order passed under the Customs Act, 1962, requesting further duty payment despite the petitioner claiming to have already paid the requisite duty for imported material under Open General Licence. The petitioner argued that the impugned order did not consider the duty already paid, violating the principles of natural justice. Citing a previous judgment, the petitioner contended that due credit must be given for customs duty already paid. The Court noted the absence of notice to the petitioner and the failure to credit the duty already paid, leading to the order being set aside. The judgment in Sonia Overseas (P) Ltd. v. Union of India was referenced to support the petitioner's case.

Compliance with Principles of Natural Justice:
The petitioner highlighted the lack of compliance with principles of natural justice in the issuance of the impugned order. It was argued that the order was passed without giving the petitioner an opportunity to be heard, which was deemed a violation of procedural fairness. The Court, acknowledging the petitioner's contention and the precedent set in Sonia Overseas (P) Ltd. v. Union of India, intervened to set aside the order, emphasizing the importance of affording parties a fair hearing before making decisions that impact their rights.

Service of Notices under Section 153 of the Act:
The respondent filed a reply asserting that notices were duly served, but during the hearing, it was revealed that the notices were sent only by ordinary post and not by registered post as required under Section 153 of the Act. This discrepancy in the service of notices led the Court to conclude that the impugned order could not be upheld. Consequently, the order was set aside, granting the opportunity to issue a fresh order in compliance with the legal provisions. The disposal of the petition was based on the failure to serve notices in accordance with the statutory requirements, highlighting the significance of proper service methods in legal proceedings.