2019 (6) TMI 580 - HC - Customs

Recovery of Customs Duty not paid - petitioner had no opportunity to present its case - principles of natural justice - HELD THAT - We set aside the recovery notice dated 18.03.2019 as well as Order-in-Original dated 28.10.2016 passed by the Additional Commissioner of Customs, we direct the respondents in terms of the statement made by the Counsel on instructions to issue a copy of the Show Cause Notice leading to the order dated 28.10.2016 to the petitioner and pass the order thereon after hearing the petitioner. The respondents are also directed to delete the petitioner's name from the Alert List . It is only if the adjudication order is passed on the Show Cause Notice is adverse to the petitioner, that proceedings for recovery and consequent alert notice will be commenced by the department after the period available to the petitioner to challenge the same under the Act expires. Petition disposed off.

Summary

Issues:
Challenge to Recovery Notice under Customs Act 1962 & Placement on "Alert List"

Analysis:
The petition challenged a Recovery Notice dated 18.03.2019 issued by the Joint Commissioner of Customs under the Customs Act 1962, seeking to recover a sum in accordance with an Order-in-Original dated 28.10.2016. Additionally, the petitioner contested being placed on an "Alert List" by the respondents, hindering their ability to conduct regular import and export activities. The basis for these actions was the petitioner's failure to pay customs duty as confirmed in the Order-in-Original. The petitioner argued that they had not received the order or any Show Cause Notice prior to it, depriving them of the opportunity to present their case or challenge the decision before the Appellate Authorities. They also claimed to have fulfilled export obligations and possessed relevant licenses and documentation, deeming the respondents' actions as arbitrary and high-handed.

The counsel for the revenue conceded that the Recovery Notice and the Order-in-Original could be set aside. They agreed to provide the petitioner with a copy of the Show Cause Notice leading to the order and allow the petitioner to present their case before a speaking order, appealable under the Act. Consequently, the Court set aside the recovery notice and the Order-in-Original, directing the respondents to issue the Show Cause Notice to the petitioner for a fair hearing. The petitioner's name was to be removed from the "Alert List." Any recovery proceedings would only commence if the adjudication order following the Show Cause Notice was adverse to the petitioner, after the appeal period under the Act expired.

Furthermore, an amount deposited by the petitioner with the respondents would be retained until the adjudication order was passed. If the order was unfavorable, the deposited amount would be adjusted against the petitioner's dues, subject to the appeal outcome under the Act. The petition was disposed of based on the above terms, ensuring a fair process for the petitioner to address the customs duty issue and related actions taken by the authorities.