2019 (7) TMI 1308 - HC - Customs

Non-fulfilment of export obligations in respect of the goods imported without payment of duty - benefit of N/N. 47/02 dated 22nd April, 2002 - basic grievance of the petitioners is that the impugned order was never served upon the petitioners nor was the demand / Show-cause Notice or notices of hearing which preceded the impugned order were ever served upon the petitioner - HELD THAT - In the facts of this case, no occasion can arise to relegate the petitioner to adopt the alternative remedy of statutory appeal. This as the decision making process leading to the impugned order dated 7th June, 2017 was bad. Therefore, the impugned order dated 7th June, 2017 is set aside - In case, the respondents are desirous of proceeding against the petitioners alleging breach of Notification No.47/02 dated 22nd April, 2002 then they would serve an appropriate Show-Cause / Demand Notice upon the petitioners and pass an order after hearing the petitioners. Petition disposed off.

Issues: Challenge to order denying benefit of Notification, Compliance with export obligations, Service of impugned order and notices, Principles of natural justice, Alternative remedy of statutory appeal.

Analysis:

1. Challenge to Order Denying Benefit of Notification:
The petition challenges the order dated 7th June, 2017, passed by the Deputy Commissioner of Customs, which denied the benefit of Notification No.47/02 dated 22nd April, 2002. The impugned order was based on the alleged failure to fulfill export obligations in relation to goods imported without duty payment. The petitioners contended that they had complied with the conditions of the notification and had obtained necessary certificates from the Directorate General of Foreign Trade. However, they claimed that the impugned order was not served upon them, and they were not given any prior notice or opportunity to be heard.

2. Compliance with Export Obligations:
The petitioners asserted that they had fulfilled all conditions of the Notification No.47/02 and had obtained the required certificates from the relevant authority. They argued that this compliance was communicated to the Adjudicating Authority before the impugned order was passed. The petitioners maintained that they had met their export obligations and should not have been denied the benefits under the notification.

3. Service of Impugned Order and Notices:
The petitioners raised a crucial issue regarding the service of the impugned order and related notices. They claimed that they only received the order in May 2019, when the consequent alert notice was enforced against them. The petitioners contended that they were not served with the impugned order, demand notices, or notices of hearing before the order was passed. This lack of proper service raised concerns about procedural fairness and adherence to principles of natural justice.

4. Principles of Natural Justice:
The petitioners argued that the decision-making process leading to the impugned order was flawed as they were not given an opportunity to present their case or respond to the allegations against them. They emphasized the importance of following principles of natural justice, which include the right to be heard and the right to a fair and unbiased decision-making process. The court acknowledged the petitioners' grievance and set aside the impugned order, emphasizing the need for procedural fairness in such matters.

5. Alternative Remedy of Statutory Appeal:
The court considered whether the petitioners should pursue the alternative remedy of a statutory appeal. However, given the procedural irregularities and lack of proper service of the impugned order, the court decided that there was no need to relegate the petitioners to the statutory appeal process. The court set aside the impugned order and directed the authorities to serve appropriate show-cause or demand notices, hear the petitioners, and pass a fresh order if necessary. This decision was based on the recognition that the impugned order was flawed due to procedural deficiencies.

In conclusion, the court allowed the petition, setting aside the impugned order dated 7th June, 2017, and directing the authorities to follow the principles of natural justice in any future proceedings related to the alleged breach of the notification. The court emphasized the importance of procedural fairness and the right to be heard in such matters, ensuring that the petitioners were given a fair opportunity to present their case.

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