2022 (8) TMI 12 - HC - Customs

Smuggling - illegal export or not - turmeric in 87 bags estimated to weigh qua 2500 kgs - two wheelers and packing bags - Confiscation - violation of principles of natural justice - HELD THAT - The law in this regard is well settled (in a long line of authorities) and it is only in cases where SCN has been issued without jurisdiction or where there is violation of NJP (Natural Justice Principles) besides some other grounds such as well settled position of law of a higher Court being disregarded, an SCN can be interfered with. A careful perusal of the writ affidavit and the arguments advanced at the bar making it clear that they turn only on facts and there is nothing to demonstrate that there is violation of NJP or that the said impugned SCN has been issued without jurisdiction. There is nothing to demonstrate that said impugned SCN has been issued in disregard of settled provisions of law; that the respondent has powers to issue SCN under Section 124 of Customs Act calling upon the noticees to show cause as to why there should be no confiscation is beyond any pale of doubt. Absent grounds for challenge to an SCN, the captioned main writ petition cannot but fail. However, it is open to writ petitioner to respond to impugned SCN and it is open to the respondent to proceed with the impugned SCN, the writ petitioner shall co-operate with the proceedings and the same can be carried to its logical end on its own merits and in accordance with law as expeditiously as the business of the respondent would permit. Petition dismissed.

Summary

Issues:
Challenge to Show Cause Notice (SCN) under Section 124 of the Customs Act, 1962.

Analysis:
The judgment involves a challenge to a Show Cause Notice (SCN) dated 1-12-2021 issued under Section 124 of the Customs Act, 1962. The SCN alleged that the petitioner and others were involved in attempting to illegally export turmeric to Sri Lanka. The SCN called for a response as to why the seized items should not be confiscated and why penalties should not be imposed. The petitioner did not respond to the SCN, leading to the challenge in the High Court.

The petitioner argued that the previous case of Nitin Nayar was distinguishable as it involved non-cooperation during an investigation, unlike the present case. The petitioner sought release of the seized items based on the challenge to the SCN itself, which was not the situation in the Nitin Nayar case. The Court noted this distinction and proceeded to evaluate the grounds on which an SCN can be challenged.

The Court referred to the well-settled legal position that an SCN can only be interfered with if issued without jurisdiction, in violation of Natural Justice Principles (NJP), or in disregard of established legal provisions. The judgment cited the Coastal Container case to emphasize that challenging an SCN should be based on substantial grounds. The Court found that in the present case, there was no demonstration of NJP violation or jurisdictional issues in the issuance of the SCN. Therefore, the challenge to the SCN failed as there were no valid grounds for interference.

The Court concluded that while the writ petition failed, the petitioner still had the opportunity to respond to the SCN, and the respondent could proceed with the proceedings. The Court emphasized the importance of cooperation and adherence to legal procedures for a fair resolution. The writ petition was dismissed with observations, and no costs were awarded in the case.