2019 (7) TMI 1337 - HC - Customs

Principles of natural justice - non-furnishing of the communication dated 25.5.2017 - HELD THAT - The material which was not furnished to the petitioner has been taken into account while passing final impugned order, thereby, violating the fundamental principles of natural justice, counsel for the parties have agreed for remanding the matter back to the Settlement Commission for a fresh adjudication in accordance with law. On the alternative prayer of the counsel for petitioner for referring the matter back to the Adjudicating Authority, it is also agreed that in case of non-consensus of claim/counter claim i.e. duty declared by petitioner vis-a-vis duty proposed by DRI, the Settlement Commission shall also consider the aspect of referring back the matter to the adjudicating authority in view of the provisions of Section 127-I of the Customs Act, 1962 and case law on the issue. The impugned order dated 31.7.2017, (Annexure P13), passed by the Customs, Central Excise and Service Tax Settlement Commission, is set aside with a direction to the Settlement Commission to decide the issue afresh in accordance with law.

Summary

Issues:
1. Challenge to order confirming custom duty demand by Settlement Commission.
2. Allegation of non-furnishing of crucial communication leading to violation of natural justice.
3. Petitioner's plea supported by evidence of undelivered communication.
4. Contemptuous conduct by respondents acknowledged but not penalized.
5. Agreement for remanding the matter back to Settlement Commission for fresh adjudication.
6. Consideration of referring the matter back to Adjudicating Authority in case of non-consensus on duty.

Analysis:

1. The petitioner, an importer, challenged the order confirming a custom duty demand by the Settlement Commission, alleging mis-declaration of goods and their value. The Court noted the petitioner's contention that reliance on a communication not provided to them violated natural justice. The matter was remanded back to the Settlement Commission for fresh adjudication, with parties directed to appear before the Commission on a specified date.

2. The petitioner raised concerns about non-furnishing of a crucial communication dated 25.5.2017, which was relied upon in the final order. The Directorate of Revenue Intelligence (DRI) claimed to have sent the communication via Speed Post, but the petitioner presented evidence that it was received back undelivered. The Court acknowledged the violation of natural justice principles and agreed to set aside the impugned order for fresh adjudication.

3. The Court noted that the DRI's assertion of communicating the crucial letter to the petitioner was contradicted by evidence of it being undelivered. The petitioner's misc. application included a letter establishing the non-delivery, highlighting the incorrect statement made by the respondents. The Court refrained from penalizing the respondents for contemptuous conduct but emphasized the importance of accurate submissions before the Court.

4. Despite acknowledging the contemptuous conduct and incorrect statements made by the respondents, the Court opted not to initiate punitive action due to the assurance of caution given by the officer present in Court. The decision to remand the matter back to the Settlement Commission for fresh adjudication was made in light of the violation of natural justice principles.

5. Both parties agreed to remand the matter back to the Settlement Commission for a fresh adjudication in accordance with the law. Additionally, in case of a lack of consensus on duty amounts between the petitioner and the DRI, the Settlement Commission was directed to consider referring the matter back to the Adjudicating Authority, as per the provisions of the Customs Act, 1962 and relevant case law.

6. The Court's decision to set aside the impugned order and direct the matter for fresh adjudication underscored the significance of upholding natural justice principles in legal proceedings. The agreement between the parties to remand the matter back to the Settlement Commission demonstrated a collaborative effort to ensure a fair and lawful resolution to the dispute over custom duty demands.