2017 (8) TMI 1152 - HC - Customs

Principles of Natural Justice - scope of SCN - whether the non-extension of a further opportunity of hearing to the petitioner, after the time prescribed in the SCN for submitting the reply, would vitiate Ext.P10 order, on the ground of violation of the rules of natural justice? - Held that - it was the petitioner who sought for a waiver of the SCN, thereby leaving the issue to be decided by the Commissioner of Customs on any legal grounds available, including grounds that were not specifically enumerated in the SCN that was subsequently served on the petitioner. Under such circumstances, the petitioner cannot be heard to contend that the department had confirmed the demand against it, or found against it on grounds which were not specifically put to them, through a SCN - the SCN limited the powers of the adjudicating authority and did not affect any of the rights of the petitioner - the mere non-extension of a subsequent hearing, prior to the passing of Ext.P10 order, cannot be said to have worked to the prejudice of the petitioner - the challenge in the writ petition against Ext.P10 order cannot be legally sustained. Inasmuch as the petitioner s challenge against Ext.P10 order in this writ petition was premised on the alleged violation of the rules of natural justice, and I have specifically found that there was no violation of the rules of natural justice occasioned while passing Ext.P10 order, the appellate tribunal, while deciding the matter on merits, shall not remand the matter to the Commissioner of Customs solely on the said ground - petition dismissed - decided against petitioner.

Summary

Issues:
1. Alleged violation of rules of natural justice in Ext. P10 order by Commissioner of Customs.

Analysis:
The petitioner, an importer of used Digital Multifunction Machines, challenged Ext. P10 order of the Commissioner of Customs directing confiscation of imported goods. The order allowed redemption for re-export on payment of a fine. The petitioner contended a violation of natural justice rules due to lack of further hearing post-reply submission to show cause notice. The Division Bench had earlier directed the petitioner to waive the show cause notice requirement for expeditious adjudication. However, a notice was served post-waiver, leading to the current challenge. The main issue was whether the absence of a subsequent hearing after reply submission invalidated Ext. P10 order on natural justice grounds.

The Court noted the petitioner's waiver of show cause notice, leaving the decision to legal grounds available. The show cause notice limited the grounds for confirming proposals, not affecting the petitioner's rights. The absence of a post-reply hearing did not prejudice the petitioner, as the notice constrained the adjudicating authority's powers. The Court found the challenge against Ext. P10 order legally unsustainable, advising the petitioner to appeal to the Appellate Tribunal.

The petitioner claimed prejudice due to delayed adjudication, seeking clearance for home consumption like similar goods permitted by Customs. Urgency was highlighted, leading the Court to direct the petitioner and directors to appeal to the Appellate Tribunal within two weeks. The Tribunal was instructed to decide on merits within three months, considering the ongoing storage costs incurred by the petitioner. As the challenge was based on natural justice violation, the Tribunal was prohibited from remanding the matter solely on this ground, allowing the petitioner to raise legal contentions during the appeal hearing.

In conclusion, the writ petition was disposed of with directions for timely appeal to the Appellate Tribunal, emphasizing a swift resolution due to storage costs and restricting remand on natural justice grounds.