2019 (7) TMI 1431 - HC - Customs

Mis-declaration of imported goods - various types of yarn and blankets - Evasion of Customs Duty by mis-declaring value and description of goods - invocation of sub-section 11 to Section 28 of the Act - parallel proceedings - HELD THAT - At the time of hearing, it is stated by the learned counsel for the respondents that the impugned show cause notice (P-1) already stands adjudicated vide order dated 11.3.2019 (R-1/1) passed by the Commissioner of Customs, Amritsar and against said order, petitioner has already availed the remedy of appeal under the provisions of Customs Act in June 2019 - Learned counsel for the petitioner does not dispute the fact that statutory appeal before CESTAT, Chandigarh already stands filed and therefore, two parallel proceedings cannot continue. Petition disposed off by relegating the petitioners to pursue the remedy of appeal already filed before the CESTAT, Chandigarh.

Summary

Issues:
1. Alleged evasion of Custom Duty by mis-declaring value and description of imported goods.
2. Legality of show cause notice issued by respondent.
3. Validity of Customs (Amendment and Validation) Act, 2011.
4. Constitutionality of Section 28(11) of the Customs Act.

Analysis:
1. The petitioner firm, engaged in importing yarn, faced allegations of evading Custom Duty by mis-declaring the value and description of goods imported between 2005 to 2007. Directorate of Revenue Intelligence conducted searches in response to intelligence received regarding the evasion practices adopted by the firm.

2. Subsequently, a Show Cause Notice dated 14.1.2010 was issued to the petitioner, accusing them of evading customs duty amounting to ?246.35 lacs by mis-declaration and undervaluation of imported yarn. The notice demanded customs duty, interest under Section 26 AB of the Customs Act, and penalty under Section 114A of the Act.

3. The petitioner sought to quash the show cause notice and challenge the validity of the Customs (Amendment and Validation) Act, 2011, specifically objecting to the insertion of sub-section 11 to Section 28 of the Act. The contention was that the amendment was invalid and contrary to law.

4. Additionally, the constitutionality of Section 28(11) of the Customs Act was questioned on grounds of violating Article 14 of the Constitution. The petitioner raised concerns regarding the discriminatory nature of the provision and its compliance with constitutional principles.

5. During the proceedings, it was revealed that the impugned show cause notice had already been adjudicated by the Commissioner of Customs, Amritsar, through an order dated 11.3.2019. The petitioner had subsequently appealed this decision in June 2019 before CESTAT, Chandigarh, thereby invoking the statutory appeal process under the Customs Act.

6. Recognizing the parallel nature of the ongoing appeal process before CESTAT, Chandigarh, the Court disposed of the writ petition, directing the petitioners to pursue the existing remedy of appeal rather than continuing with the present proceedings. This decision was made in consideration of the principle that two simultaneous proceedings on the same matter should not persist.

In conclusion, the judgment addressed the issues related to alleged customs duty evasion, legality of the show cause notice, validity of legislative amendments, and constitutional concerns. The Court's decision to relegate the petitioners to the appeal process before CESTAT, Chandigarh, reflected a procedural approach to resolve the dispute in a structured and appropriate manner.