2017 (11) TMI 52 - HC - Customs

Confiscation of imported vehicle - right hand drive Hummer H2 SUV - allegation in the show-cause notice was that the vehicle was converted from left hand drive to right hand drive and had changed hands before being imported into India and as such was not eligible for concessional duty - also, the cost of conversion from left hand drive to right hand drive had not been included in the assessable value of the vehicle and as such duty was short paid at the time of import - main grievance of the petitioner appears to be that he has lost the opportunity of approaching the Settlement Commission. Held that - where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute must be availed of - In the case of Whirlpool Corporation-vs.-Registrar of Trade Marks, 1998 (10) TMI 510 - SUPREME COURT , the Apex Court observed that under Art. 226 of the Constitution of India, the High Court having regard to the facts of a case, has a discretion to entertain or not to entertain a writ petition. The High Court has imposed upon itself certain restrictions one of which is that if an efficacious alternative remedy is available, the High Court would not normally exercise its writ jurisdiction. Principles of Natural Justice - Held that - The customs law is a complete code by itself. The Customs Act and the Rules and bye-laws framed thereunder constitute a comprehensive and exhaustive code. The order passed by the respondent in this case is an appealable order. Sec. 128 provides for a statutory appeal - Mr. Khaitan argued that this statutory appeal is not an effective remedy since under Sec. 128A(3), the Commissioner (Appeals) cannot remand the matter back to the Adjudicating Officer. Even assuming the Commissioner does not have that power, in my opinion, the same does not make the statutory appeal a non-efficacious remedy. The petitioner had sufficient opportunity of contesting the adjudication proceeding on merits but it chose not to do so. The respondent granted two adjournments to the petitioner - By the notice dated 7 February, 2013 all the noticees including the petitioner were informed that no further adjournments would be allowed and if one failed to appear, the case would be decided as per the facts and evidence on record. I cannot hold that there was breach of the principles of natural justice. If the petitioner takes recourse to the alternative remedy of statutory appeal, he would not be prejudiced in any manner. It is a comprehensive remedy and he can contest the order on merits and I propose to grant him that liberty. If the petitioner has lost the opportunity of contesting the adjudication proceeding on merits in the first round, it is only himself that he can blame. Approach to Settlement commission which was rejected - Held that - If the petitioner was serious about approaching the Settlement Commission, he ought to have been more diligent and he had sufficient time for filing a settlement application before the Settlement Commission. It appears that he took a chance of getting a favourable verdict before the respondent and now that the order has gone against him, he prays for an opportunity to approach the Settlement Commission. Application dismissed - However, if the petitioner prefers an appeal from the impugned order within four weeks from date, the petitioner shall be entitled to the benefit of Sec. 14 of the Limitation Act and the Appellate Authority shall decide the appeal on merits without going into the question of limitation.

Summary

Issues Involved:
1. Legality of the ex parte adjudication order dated 11 June 2013.
2. Petitioner's right to approach the Settlement Commission.
3. Adequacy of the alternative remedy available to the petitioner.
4. Alleged procedural lapses and denial of natural justice.

Detailed Analysis:

1. Legality of the ex parte adjudication order dated 11 June 2013:

The petitioner challenged the order of confiscation and imposition of differential duty and penalties on the grounds that it was passed ex parte without considering his request for adjournment and without granting a final opportunity of hearing. The petitioner argued that the adjudicating authority proceeded on the erroneous basis that the petitioner had admitted to the allegations in the show-cause notice, which was not the case.

The court noted that the petitioner was given sufficient opportunities to present his case, including multiple adjournments. The petitioner failed to submit a settlement application despite assurances and did not appear for the hearings. The court found no breach of natural justice as the respondent had informed the petitioner that no further adjournments would be allowed and the case would be decided based on available facts and evidence.

2. Petitioner's right to approach the Settlement Commission:

The petitioner contended that the impugned order prevented him from approaching the Settlement Commission, especially after the amendment to Section 127(1) of the Customs Act, which came into effect on 14 May 2015. This amendment excluded cases referred back for fresh adjudication from the definition of 'case' under Section 127B, thus barring the petitioner from approaching the Settlement Commission.

The court observed that the petitioner had ample time (nine months) to approach the Settlement Commission before the adjudication order was passed but failed to do so. The court held that the petitioner could not use the writ jurisdiction to bypass statutory provisions and seek an opportunity to approach the Settlement Commission after failing to act diligently.

3. Adequacy of the alternative remedy available to the petitioner:

The respondents argued that the petitioner had an efficacious alternative remedy available under Section 128 of the Customs Act, which provides for an appeal against the adjudication order. The petitioner countered that the appellate authority could not remand the matter for fresh adjudication, making the remedy inadequate.

The court held that the availability of a statutory appeal constitutes an adequate alternative remedy. The court emphasized that the writ jurisdiction should not be invoked when an effective alternative remedy is available. The court granted the petitioner the liberty to file an appeal and directed the appellate authority to consider the appeal on merits, including the petitioner's contentions regarding procedural lapses.

4. Alleged procedural lapses and denial of natural justice:

The petitioner alleged that the adjudicating authority relied on incorrect facts, such as the supposed attendance of the petitioner's advocate at a hearing on 5 February 2013, and wrongly inferred admission of liability from the payment of differential duty and interest.

The court found that the adjudicating authority had followed due process by granting multiple adjournments and informing the petitioner of the consequences of non-appearance. The court held that the petitioner had sufficient opportunity to contest the allegations but chose not to. The court also noted that the writ court is concerned with the decision-making process rather than the merits of the decision itself.

Conclusion:

The court dismissed the writ application, holding that the petitioner had adequate opportunity to present his case and approach the Settlement Commission but failed to act diligently. The court directed that if the petitioner files an appeal within four weeks, the appellate authority should consider the appeal on merits without addressing the issue of limitation and allow the petitioner to present his case fully.

Orders:

- WP No. 830 of 2013 is dismissed.
- If an appeal is filed within four weeks, the petitioner shall benefit from Section 14 of the Limitation Act.
- The appellate authority shall decide the appeal on merits and allow the petitioner to present his case, observing the principles of natural justice.