2013 (9) TMI 828 - HC - Customs

Omission and Commission in the Illegal Attempt to Export - Penalty u/s 114(i) r.w.113 (d) of Customs Act - Held that - The order passed by the Additional Commissioner of Customs was upheld , which was the subject matter of challenge in the writ petition, was bad on the ground of procedural illegality - Therefore, the order dated 6th November, 2012 was set aside - The matter was remanded back to the Additional Commissioner of Customs - He shall rehear the matter and pass an appropriate order - He shall not rely upon the report of the BSNL unless the same had been proved in accordance with law and an opportunity to cross examine the author of the report had been afforded to the writ petitioner - In case that cannot be done, the report cannot be taken into account in deciding the matter.

Summary

Issues:
Challenge to order of Additional Commissioner of Customs - Confiscation of goods and imposition of penalty under Customs Act, 1962 - Procedural irregularity in not providing opportunity for cross-examination - Availability of alternative remedy of appeal under Customs Act - Discretionary power for waiver of penalty under section 129E of Customs Act.

Analysis:
The writ petition challenged an order dated 6th November, 2012, passed by the Additional Commissioner of Customs, which confiscated goods and imposed a penalty under Section 114(i) of the Customs Act, 1962 for illegal export of red sanders wood. The writ petitioner contended that the order was passed without giving an opportunity for cross-examination, leading to procedural irregularity. The Trial Court dismissed the writ petition, noting the availability of an appeal before the Commissioner (Appeals) as an alternative remedy. The writ petitioner then appealed, arguing that the Customs authorities relied on an unproven report in the case and failed to allow cross-examination of the report's author.

The appellant's counsel highlighted that the report submitted by BSNL, which formed the basis of the prosecution's case, was not proven and thus should not have been considered as evidence. The appellant requested to cross-examine the author of the report but was asked to provide the name, which was not possible as the report was obtained by the prosecutor. The burden of proof was shifted unfairly to the writ petitioner, contrary to principles of fair play and justice. The Customs Department contended that the writ petitioner had the option to appeal under section 128 of the Customs Act, with provisions for waiver of penalty under section 129E, subject to the discretion of the Appellate Authority.

The High Court found merit in the appellant's argument regarding procedural irregularity and lack of opportunity for cross-examination. The order of the Additional Commissioner of Customs was set aside, and the matter was remanded for rehearing with directions not to rely on the unproven report from BSNL without proper verification and opportunity for cross-examination. The Court emphasized that if the report cannot be validated through due process, it should not influence the decision-making process. The appeal and application were disposed of accordingly, with the parties entitled to certified copies of the order upon request.