2020 (2) TMI 239 - HC - Customs

Service of SCN - Refund of SAD - Section 3(5) of the Customs Tariff Act 1975 in terms of N/N. 102/2007-Cus dated 14.09.2007 - purported failure on the part of the petitioner to correct the deficiencies pointed out in the respective memos issued to the petitioner on 10.07.2012 in terms of Public Notice No.39/2011 dated 14.06.2011 - principles of HELD THAT - Since the refund claims were to be rejected the respondent ought to have issued proper notices to the petitioner and called upon the petitioner to show cause as to why the refund claims of the petitioner should be rejected even if the deficiencies pointed out in the respective memos were not rectified by the petitioner. In VASTA BIO-TECH PVT. LTD. VERSUS ASSISTANT COMMR. OF CUS. CHENNAI 2018 (1) TMI 1437 - MADRAS HIGH COURT this Court under a similar circumstances had set aside the order stating that the order was passed in violation of principle of natural justice - in this case also there is violation of principle of natural justice though the petitioner failed to remove the deficiencies pointed out in the respective memos. The impugned orders dated 14.08.2012 may be treated as show cause notices - petition disposed off.

Summary

Issues:
Challenge to impugned orders dated 14.08.2012 regarding refund of Special Additional Duty of Customs under Section 3(5) of the Customs Tariff Act, 1975. Alternate remedy before Commissioner of Customs (Appeals) under Section 128 of the Customs Act, 1962. Discrepancies in refund claims, mismatch in VAT payment, and non-compliance with Public Notice requirements.

Analysis:
The petitioner challenged the impugned orders dated 14.08.2012 related to the refund of Special Additional Duty of Customs under Section 3(5) of the Customs Tariff Act, 1975. The petitioner imported goods and sought a refund under Notification No.102/2007-Cus dated 14.09.2007. The respondent rejected the refund claims citing discrepancies highlighted in deficiencies memos, despite the petitioner's reply and request for processing the claims. The petitioner opted for Writ Petitions instead of the appeal process before the Commissioner of Customs (Appeals), as provided under Section 128 of the Customs Act, 1962.

The petitioner argued that proper notice should have been given before rejecting the refund claim application, even if deficiencies were not rectified. On the other hand, the respondent contended that the petitioner had an alternative remedy through the appeal process and had already complied with the deficiencies pointed out. The impugned order highlighted a mismatch in VAT payment and non-compliance with requirements of a Public Notice dated 14.06.2011 issued by the Commissioner of Customs (Sea Port-Exports), which referred to certification by a Chartered Accountant.

The Court noted the respondent's findings regarding the Chartered Accountant's certificate not being from the required Statutory Auditor or VAT Auditor, leading to deficiencies in the certificate provided by M/s. Agarwal Seth & Co. Furthermore, the Chartered Accountant did not provide necessary registration/enrollment details. The Court considered arguments from both sides and referenced a previous case where an order was set aside due to a violation of the principle of natural justice.

In light of the above, the Court treated the impugned orders as show cause notices and directed the petitioner to respond within thirty days. The respondent was instructed to conduct a personal hearing and make a decision within three months from the date of the Court's order. The Writ Petitions were disposed of with these instructions, without imposing any costs.