2019 (4) TMI 257 - HC - Customs

Maintainability of petition - alternative remedy of appeal - Valuation of export goods - fabrics and ready-made garments - exports made in proxy dummy - inflated export value so as to avail undue and otherwise inadmissible export benefits advantage - rejection of declared FOB value - Held that - This Court is not commenting upon the issue and upon the findings given by the learned Commissioner, as the petitioner is having an alternative remedy of preferring an appeal before the Customs, Excise Service Tax Appellate Tribunal - This Court is of the opinion that as the order has been passed by an authority competent under the statute to pass an order and as the order has been passed after hearing the petitioner in detail, the present petition deserves to be dismissed on the ground of availability of alternative equally efficacious remedy. No case for interference is made out in the matter - petition dismissed.

Issues Involved:
1. Validity of the impugned order passed by the Commissioner, CGST and Central Excise.
2. Allegations of inflated export value and inadmissible export benefits.
3. Compliance with Section 138-B of the Customs Act, 1962.
4. Denial of the right to cross-examine witnesses.
5. Principles of natural justice and fair play.
6. Alternative remedy of appeal before the Customs, Excise & Service Tax Appellate Tribunal.

Detailed Analysis:

1. Validity of the Impugned Order:
The petitioner challenged the impugned order dated 24/05/2018, passed by the Commissioner, CGST and Central Excise, Indore, alleging non-compliance with Section 138-B of the Customs Act, 1962. The petitioner argued that the order was passed without a formal decision on the request to examine witnesses, which was a violation of judicial process.

2. Allegations of Inflated Export Value:
The petitioner was issued a show cause notice-cum-demand notice under the Customs Act, 1962, alleging that the petitioner, in association with others, exported fabrics and ready-made garments by inflating the export value to avail undue export benefits. The notice proposed to reject the declared FOB value and recover export benefits, including duty drawback, granted towards past exports, and to impose a penalty.

3. Compliance with Section 138-B of the Customs Act, 1962:
The petitioner repeatedly requested the examination of witnesses under Section 138-B of the Customs Act, 1962, but claimed that the respondents passed the impugned order without addressing this request. The petitioner argued that the examination-in-chief and cross-examination are integral to judicial proceedings, and any deviation would render the proceedings void.

4. Denial of the Right to Cross-Examine Witnesses:
The petitioner contended that the respondents did not permit cross-examination of witnesses despite multiple requests. The petitioner argued that the impugned order was void ab initio as it was passed without following the procedure stipulated under Section 138-B of the Customs Act, 1962, amounting to a denial of reasonable opportunity.

5. Principles of Natural Justice and Fair Play:
The petitioner argued that the principles of natural justice and fair play were violated as the respondents did not allow cross-examination of witnesses whose statements were used against the petitioner. The petitioner cited several judgments to support the argument that denial of cross-examination vitiates the order.

6. Alternative Remedy of Appeal:
The court noted that the petitioner had an alternative remedy of preferring an appeal before the Customs, Excise & Service Tax Appellate Tribunal. The court held that the order was passed by a competent authority after hearing the petitioner in detail. Therefore, the writ petition was dismissed on the ground of availability of an alternative equally efficacious remedy.

Conclusion:
The court dismissed the writ petition, stating that the petitioner has an alternative remedy of appeal before the appellate tribunal. The court emphasized that the principles of natural justice do not require cross-examination in matters like this, referencing the judgment in M/s. Kanungo & Company. The court also directed the respondents to ensure complete parawise replies in future cases involving significant amounts. The dismissal of the petition does not preclude the petitioner from pursuing an appeal before the appellate tribunal.

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