2017 (5) TMI 82 - HC - Customs

Natural justice - violation of actual user condition - filing of contemporaneous documents - Held that - when voluminous documents were relied upon to prove and establish that there is no breach or violation of the alleged condition, then, it was incumbent upon the appellate authority, which is the final fact finding authority, to have gone into the record. It was its bounden duty to have rendered complete finding consistent with the materials on record. It is an appellate authority and exercising appellate powers. In these circumstances, a cryptic finding does not serve the ends of justice. The order is virtually unreasoned and even does not take into account that there was medical reason which prevented the petitioner from attending the office and the personal hearing - the matter shall stand restored to the file of the Appellate Committee at New Delhi for re-examination - appeal allowed by way of remand.

Summary

Issues:
Challenge to order modifying penalty imposed under Foreign Trade Act, 1992 and Import Control Order, 1955.

Analysis:
1. The petitioner, a proprietary concern engaged in manufacturing metal containers, challenged the order modifying penalties imposed by the Additional Director General of Foreign Trade. The penalties were imposed due to the petitioner's alleged failure to utilize imported defective sheets as an actual user, breaching the actual user condition.

2. The petitioner imported defective M. S. Sheets under supplementary import licenses for manufacturing metal containers. The petitioner maintained records and documents supporting the import and utilization of the materials. However, a change in import policy led to inquiries and show cause notices regarding the utilization of the imported materials, ultimately resulting in penalties and restrictions on importing goods.

3. The petitioner contended that it provided all relevant records and documents to prove compliance, emphasizing the adherence to principles of natural justice. The respondent argued that the petitioner failed to avail opportunities granted, labeling their actions as delaying tactics and an abuse of the court's process.

4. The High Court scrutinized the documents and records submitted by the petitioner, noting the lack of conclusive evidence regarding the utilization of the imported materials. It highlighted discrepancies in the findings of the authorities and the appellate committee, emphasizing the need for a thorough examination of the facts to ensure justice.

5. The Court found that the appellate order was cryptic and lacked detailed reasoning, failing to consider the petitioner's justifications and medical reasons for non-appearance. Consequently, the Court set aside the appellate order and directed the matter to be restored to the Appellate Committee for a comprehensive review.

6. The Court instructed the petitioner to appear before the Appellate Committee, providing a deadline for a speaking order to be passed after a thorough hearing. The Court emphasized the importance of a detailed examination of the case to ensure fairness and directed all contentions on the merits to remain open for further consideration.

7. With these directions, the writ petition was disposed of, highlighting the significance of a fair and detailed review of the case to uphold principles of natural justice and ensure a just outcome without any order as to costs.