2023 (5) TMI 992 - HC - Customs

Issuance of Writ of Certiorari to call for the records in the Proceeding - Department was directed (by way of Interim Order) not to take any coercive steps for recovery of demand raised on account of the issue, which is pending with the Adjudicating Authority - HELD THAT - Despite the interim order, it appears that some steps were taken against the petitioner and therefore, the petitioner was constrained to approach the Division Bench of this Court in C.M.P. Nos.4533, 6715, 6948 and 6987 and 2020 in C.M.A. Nos.735, 1059, 1098 and 1111 of 2020 and the Division Bench of this Court, by interim order dated 21.04.2021, referring to the earlier interim order granted on 22.09.2020, observed that action taken to attach the bank account of the petitioner was clearly in violation of the order passed by the Division Bench of this Court and directed the respondents to raise the order of attachment forthwith - Now, it is seen that the second respondent, by impugned communication dated 03.05.2023, has called upon the petitioner to pay the penalty amount of Rs.2,50,00,000/-, within 7 days from the date of receipt of the notice and informed that in case of failure, action will be initiated against the petitioner in accordance with the provisions of Section 142(1)(c)(iii) of the Customs Act, 1962. Despite interim orders already in force, there is no justification on the part of the respondents to issue the impugned letter dated 03.05.2023. Therefore, this Court feels that the writ petition can be allowed setting aside the impugned letter, which is clearly in violation of the earlier orders passed by the Division Bench of this Court - Petition allowed.

Summary

Issues involved:
The issues involved in the judgment include challenging the penalty imposed under Section 114(iii) of the Customs Act 1962, violation of interim orders by the respondents, and the issuance of an impugned communication demanding payment of the penalty amount.

Challenging Penalty Imposed:
The petitioner, engaged in manufacturing Flexible Intermediate Bulk Container Bags, challenged the penalty of Rs.2,50,00,000/- imposed under Section 114(iii) of the Customs Act 1962. The petitioner filed an Appeal before the Customs, Excise and Service Tax Appellate Tribunal, Chennai, and subsequently a Petition for rectification of mistake under Section 129 B(2) of the Customs Act, 1962. The Tribunal confirmed the penalty, leading to the filing of a Civil Miscellaneous Appeal No.735 of 2020 before the Division Bench of the High Court.

Violation of Interim Orders:
Despite interim orders directing the Department not to take coercive steps for recovery of the demand, actions were taken against the petitioner. This led to the petitioner approaching the Division Bench of the High Court, which observed that attaching the petitioner's bank account was a violation of the earlier interim order. The Division Bench directed the respondents to raise the order of attachment.

Impugned Communication Demanding Payment:
The second respondent issued a communication dated 03.05.2023, demanding the petitioner to pay the penalty amount of Rs.2,50,00,000/- within 7 days, failing which action would be initiated under Section 142(1)(c)(iii) of the Customs Act, 1962. The High Court found that despite existing interim orders, there was no justification for issuing the impugned letter. The Court allowed the writ petition, setting aside the impugned letter as it was in violation of earlier orders passed by the Division Bench. The High Court emphasized that the interim orders passed by the Division Bench should be respected by the respondents.