2021 (3) TMI 13 - HC - Customs

Violation of principles of natural justice - Validity of order of adjudication passed by the Principal Commissioner of Customs (Prev.) - HELD THAT - This Court is of the view that the bar of alternative remedy does not operate in the event an appellable order is challenged on the ground of jurisdiction and violation of principles of natural justice. This issue in the instant case requires more detailed hearing which can be done only after calling for affidavits. Let affidavit-in-opposition be filed within four weeks from date; reply thereto, if any, within two weeks thereafter. Liberty to mention after eight weeks for inclusion in the list under the heading Hearing .

Summary

Issues:
Challenge to order of adjudication on grounds of jurisdiction and violation of principles of natural justice. Applicability of penalty under Section 112(b) of the Customs Act, 1962. Bar of alternative remedy in case of jurisdictional challenges.

Analysis:
The petitioner challenged an order of adjudication issued by the Principal Commissioner of Customs, alleging lack of jurisdiction and violation of natural justice principles. The adjudicating authority imposed a penalty of ?12,00,000 on the petitioner under Section 112(b) of the Customs Act, 1962, for involvement in smuggling gold bars. The petitioner argued that as per Section 112(b)(ii), the maximum penalty should be 10% of the confiscated goods' value, which was ?90,00,000, making the maximum penalty ?90,000. Citing a previous judgment, the petitioner contended that since the confiscated gold was not a prohibited item, the penalty should not exceed 10% of the goods' value. Additionally, the petitioner highlighted violations of natural justice in the adjudication process. The petitioner sought to set aside the order and have the matter reconsidered by the adjudicating authority.

The respondent argued that the impugned order was appealable under Section 129A of the Customs Act, referring to a relevant judgment. They pointed out that the petitioner had missed the appeal window of three months, which could be extended on valid grounds. The respondent also mentioned that a stay order was in place regarding the judgment cited by the petitioner. They contended that the petitioner should have pursued the appeal route instead of approaching the High Court. The respondent emphasized that the lack of appeal by the petitioner should not grant them leniency.

Upon reviewing the arguments and evidence, the Court opined that the bar of alternative remedy does not apply when challenging an appealable order on jurisdictional and natural justice grounds. The Court deemed the issue required further detailed examination through affidavits. Accordingly, the Court directed the respondent to file an affidavit-in-opposition within four weeks, allowing the petitioner to respond within two weeks thereafter. The case was scheduled for a hearing after eight weeks for further proceedings.