2013 (3) TMI 262 - HC - Customs

Ex-parte order rejecting the repetitive adjournments - Food Grade Hexane procured without payment of Central Excise duty in the manufacture of De-Oiled Cake which were purchased and subsequently exported under claim of Drawback - SCN issued demanding duty drawback amount with interest and further penalty under Section 114 and 114AA of Customs Act, 1962 - assessee contested against rejecting the application for adjournment seeked to approach the Settlement Commission - Held that - There was no statutory duty on part of the Additional Commissioner to grant adjournment to enable the petitioners to approach the Settlement Commission. His duty was to consider the request of the petitioners on the basis of reasonableness. The petitioners had no right to seek unlimited adjournments nor seek adjournment without any basis. In fact, proviso to Section 122A of the Act provides that the adjournment shall not be granted for more than three times. On previous two occasions, the petitioners had prayed for adjournment on the ground that the Association was to approach the C.B.E. & C. for finding some solution. The third request was made on the premise that the petitioners would like to approach the Settlement Commission. In such request letter also, the petitioners did not specify any time within which they would make such an application nor did they pray for any specific adjournment date. What they conveyed to the Additional Commissioner was that they would like to approach the Settlement Commission and that a copy of such an application would be produced as soon as the same is filed. In that view of the matter, the Additional Commissioner should keep the matter in abeyance. As the request of the petitioners for time was thus open-ended it was not the statutory duty of the Additional Commissioner to accept any application for adjournment. Under the circumstances no reason to interfere by setting aside the order of the Additional Commissioner only with a view to reviving the stage of the proceedings being pending before the Additional Commissioner so as to enable the petitioners to approach the Settlement Commission. In the result, the petition is dismissed.

Summary

Issues Involved:
1. Validity of the adjudicating authority's decision to reject adjournment requests.
2. Petitioners' right to approach the Settlement Commission.
3. Compliance with principles of natural justice.
4. Availability of statutory appeal against the adjudicating authority's order.

Detailed Analysis:

1. Validity of the Adjudicating Authority's Decision to Reject Adjournment Requests:
The petitioners challenged the adjudicating authority's decision to reject their requests for adjournment. The adjudicating authority had rejected the requests on the grounds that the petitioners had already been granted adjournments on two previous occasions and that the proviso to sub-section (2) of Section 122A of the Customs Act, 1962, limits the number of adjournments to three. The court found that the adjudicating authority was not statutorily obligated to grant further adjournments and had acted within the bounds of reasonableness. The petitioners' requests were seen as open-ended and lacked specificity in terms of timeframes for making an application to the Settlement Commission. The adjudicating authority's decision to proceed with the adjudication was deemed appropriate given the circumstances.

2. Petitioners' Right to Approach the Settlement Commission:
The petitioners argued that the adjudicating authority should have postponed the hearing to allow them to approach the Settlement Commission. However, the court noted that the petitioners had nearly a year to apply to the Settlement Commission but failed to do so. The adjudicating authority was not required to keep the proceedings in abeyance indefinitely. The court emphasized that the purpose of the Settlement Commission is to achieve finality in tax disputes, but this does not entitle the petitioners to unlimited adjournments.

3. Compliance with Principles of Natural Justice:
The petitioners contended that the adjudicating authority's decision violated the principles of natural justice. They argued that they were not given a fair opportunity to present their case. The court, however, found that the petitioners were given reasonable opportunities to participate in the proceedings. The adjudicating authority had granted multiple adjournments and considered the petitioners' written submissions. The court held that the adjudicating authority's approach did not violate the principles of natural justice.

4. Availability of Statutory Appeal Against the Adjudicating Authority's Order:
The respondents argued that the petitioners had an alternative remedy available through a statutory appeal to the Commissioner. The court agreed, noting that the impugned order was appealable. The court stated that the petitioners had not shown extraordinary reasons to bypass the statutory remedy. The court also provided that if the petitioners filed an appeal within three weeks and sought condonation of delay, the appellate authority should consider the appeal on merits, excluding the period during which the petitioners pursued remedies before the court.

Conclusion:
The court dismissed the petition, finding no reason to interfere with the adjudicating authority's order. The court emphasized that the petitioners had ample time to approach the Settlement Commission and that the adjudicating authority acted within legal bounds by rejecting further adjournment requests. The court also clarified that the petitioners could still challenge the merits of the adjudicating authority's order before the appellate authority.