2020 (5) TMI 41 - HC - Customs

Principles of natural justice - conclusion of assessment, without complying with the directions issued by the CESTAT on 20.01.2017 - HELD THAT - In the instant case, even without examining the reasons as to why the respondent authority was unable to comply with the directions issued by the CESTAT in its order dated 20.01.2017 in toto, the fact remains that the respondent authority has not supplied the documents, which it was asked to do so by the CESTAT, to the petitioner. Hence, the best course of action that was available to the respondent authority was to request the CESTAT to amend its earlier order by filing appropriate application within the stipulated period instead of insisting upon the petitioner to go ahead with the assessment. This can never be the spirit of assessment and the assessee concerned cannot be sent from pillar to post, particularly, on the very issue on which the challenge has been made. This court is conscious of the fact that the differential duty imposed upon the present petitioner and six other Noticees is huge. The matter is quite old and involves a long drawn legal battle, which has continued till date. The final adjudication could not be made in the wake of this challenge and the directions issued by the CESTAT. However, that also cannot be a ground for the court to permit breach of the principles of natural justice - It is not only about the grant of an opportunity of being heard to the party concerned, but of complying with the principles of natural justice, which includes the furnishing of relevant documents also, which is vital for the purpose of adjudication. Considering the facts of the case, this court is of the opinion that the communication dated 15.11.2018 addressed to the advocate for the petitioner by the Office of the respondent No.2 stating that in case of non furnishing of final submissions by the petitioner before 30.11.2018, the case shall be proceeded for final adjudication, deserves indulgence. The action of the respondent No.2 authority seeking to proceed with the assessment of the petitioner, without complying with the directions issued by the CESTAT in its order dated 20.01.2017, would entail to the exercise of the powers by this court since the authority, which, otherwise has the powers, has not taken any steps in compliance of the directions issued by the CESTAT. Hence, the communication dated 15.11.2018 issued by the Office of the respondent No.2 deserves to be quashed and set aside and appropriate directions are required to be issued to the respondent No.2 - the impugned communication dated 15.11.2018 addressed to the learned advocate for the petitioner by the Office of the respondent No.2 herein is quashed and set aside - petition allowed in part.

Summary

Issues Involved:
1. Jurisdiction of the Principal Commissioner/Commissioner of Customs to conduct adjudication.
2. Compliance with CESTAT's directions.
3. Breach of principles of natural justice.
4. Non-supply of relevant documents to the petitioner.
5. Validity of the show cause notice and subsequent proceedings.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Principal Commissioner/Commissioner of Customs to Conduct Adjudication:
The petitioner sought a writ of prohibition to prevent the Principal Commissioner/Commissioner of Customs, Ahmedabad from adjudicating the show cause notice dated 05.05.2006. The petitioner argued that the adjudication was without jurisdiction due to non-compliance with CESTAT's directions. The court, however, noted that the authority concerned was empowered to assess the net invoiced bills and thus had jurisdiction.

2. Compliance with CESTAT's Directions:
The CESTAT had remanded the matter to the Commissioner of Customs for fresh adjudication with specific directions to provide relevant documents to the petitioner. The court found that the respondents failed to comply with these directions, as they did not provide all the required documents, which was in clear violation of the CESTAT's order. The court emphasized that the respondents should have either complied with the directions or sought modification from the CESTAT.

3. Breach of Principles of Natural Justice:
The petitioner contended that the principles of natural justice were breached as relevant documents were not provided, preventing a fair defense. The court agreed, noting that the failure to furnish documents violated natural justice principles. The court highlighted that the respondents' insistence on proceeding without providing the documents or seeking modification from the CESTAT was improper.

4. Non-supply of Relevant Documents to the Petitioner:
The petitioner repeatedly requested documents such as import declarations, import invoices, assessment sheets, and parcel bills, which were not provided. The court found that the respondents admitted to not supplying all the documents as directed by the CESTAT. The court held that the respondents should have either provided the documents or sought modification from the CESTAT if they were unable to comply.

5. Validity of the Show Cause Notice and Subsequent Proceedings:
The court examined whether the adjudication could proceed without complying with the CESTAT's directions. It concluded that the respondents' actions were in violation of the CESTAT's order and principles of natural justice. Consequently, the court quashed the communication dated 15.11.2018 and directed the respondents to provide the required documents within four weeks or seek modification from the CESTAT.

Conclusion:
The court partly allowed the petition, quashing the communication dated 15.11.2018 and restraining the respondents from proceeding with the adjudication until compliance with the CESTAT's directions or obtaining a modification. The court emphasized the importance of adhering to appellate authority directions and upholding principles of natural justice.