2019 (7) TMI 1541 - HC - Customs

Validity of Show Cause Notice (SCN) - Denial of Benefit of Customs Notification No.46/11 dated 1st June 2011 - import of Tin Ingot imported from Malaysia - the Government of India stated that the data submitted by MSC to the Ministry of Industrial Trade and Industry (MITI) Malaysia to obtain the Country of Origin Certificate (COC) was not correct - HELD THAT - The issues raised in the petition could be appropriately addressed in adjudication proceedings while responding to the show-cause notice. The issue of application of interpreting the Customs Notification keeping in view the provisions of Treaty is an issue which could be raised/ urged before the authorities. So also the certificate issued by the competent authority cannot be disputed by the Customs Authorities on the basis of decisions of this Court is also an issue which could be decided by the authority under the Act. We are certain that the adjudicating Authority would adjudicate upon the show-cause notice without in any manner being influenced by or controlled by the prima facie view taken by the CBIC while communicating with the Malaysian Authorities. There is no reason at this stage to suspect that the adjudicating Authority would not grant a fair and reasonable hearing to the petitioner or not decide the showcause notice fairly taking into account the petitioner s contentions. The various communications of the CBIC which have been referred to by the Petitioner as creating an apprehension in the mind of the petitioner that the adjudication proceedings would be an empty formality as the CBIC has already taken a view against the petitioner is not justified. The view taken by CBIC is only a prima facie view in having directed the authority to issue a show cause notice. The prima facie view taken by the CBIC as communicated the Malaysian Authority or in its communication to the DRI would not govern the adjudication proceedings before the Commissioner. Also there are allegations in the notice of the certificate having been obtained by fraud. This issue of fraud is a subject matter of adjudication and cannot be decided in a writ proceedings. Petition dismissed.

Summary

Issues:
Challenge to show-cause cum demand notices under Section 28 of the Customs Act, 1962 seeking benefit of Customs Notification No.46/11 dated 1st June, 2011 in respect of import of Tin Ingot from Malaysia.

Detailed Analysis:

Issue 1: Challenge to Show-Cause Notices
The petitions under Article 226 of the Constitution challenge the show-cause cum demand notices issued by Customs Officers under Section 28 of the Customs Act, 1962. The impugned notices seek benefit under Customs Notification No.46/11 dated 1st June, 2011 for the import of Tin Ingot from Malaysia. The respondent filed a common affidavit in reply to all four petitions.

Issue 2: Interpretation of Customs Notifications and Treaty Provisions
The petitioner in the lead petition was issued a show-cause notice seeking to recover duty on Tin Ingot imports from Malaysia, alleging violation of origin rules and misrepresentation. The petitioner argued that the dispute between India and Malaysia regarding the Country of Origin Certificate (COC) should be resolved through the Dispute Settlement Mechanism (DSM) of an Arbitral Tribunal as per the Treaty provisions. The petitioner contended that the Customs Authorities are bound by the COO certificate issued by the designated authority.

Issue 3: Adjudication and Fair Hearing
The respondent submitted that all issues should be considered by the adjudicating Authority, emphasizing misstatements, suppression of facts, and fraud in obtaining the COO. The Court held that the issues raised could be addressed in adjudication proceedings, emphasizing the authority's role in deciding on the application of Customs Notification and the validity of the COO certificate. The Court emphasized that the adjudicating Authority should grant a fair hearing and decide the show-cause notice impartially, irrespective of prima facie views expressed by CBIC.

Conclusion:
The Court declined to entertain the petitions, dismissing them without expressing any view on the merits of the Revenue's case or the Petitioner's submissions to avoid influencing the adjudicating authority. The Court emphasized that the issues raised should be addressed through the adjudication process, ensuring a fair hearing and consideration of all contentions by the parties involved.