2023 (9) TMI 314 - HC - Customs

Violation of principles of natural justice - opportunity for personal hearing not provided - Denial of benefit of Duty Free Replenishment Certificate (DFRC) - DFRC license was actually issued for import of cotton processed fabrics of GSM 95 /-10%, but it has been used to avail the import duty benefit for the import dyed woven polyester fabrics - Maintainability of petition - petitioner is having an alternate remedy - Penalty u/s 114A of CA - suppression of facts or not - HELD THAT - On perusal of the order, it is seen that only three persons have attended the personal hearing, rest of them did not respond to the summons. It is also seen that the petitioner has specifically requested for cross examination - Respondents submitted that the petitioner has mentioned designation but has not mentioned the name of the official, hence such request cannot be considered. This Court is of the view that such contention of the respondents cannot be entertained, since the official who was serving at that point of time is the appropriate person and the respondents are well aware of such persons rather than petitioner. Maintainability of petition - petitioner is having an alternate remedy - HELD THAT - This Court is of the view that this writ petition is pending from 2014 onwards and at this point of time, the petitioner cannot be directed to file appeal. Penalty imposed under Section 114A - suppression of facts or not - HELD THAT - When an element of criminality is alleged on the petitioner, then the petitioner is entitled to personal hearing along with cross examination. When the petitioner has specifically sought for cross examination by giving a list of persons, denying opportunity of cross examination is clear violation of principles of natural justice. Therefore, this Court is remitting the matter back to the authorities. The authorities shall grant personal hearing as well as the authorities shall allow cross examination especially to the list of persons which the petitioner has mentioned in the list of persons. Petition allowed.

Issues involved:
The judgment addresses the issues of violation of principles of natural justice in a case involving the imposition of a penalty under Section 114A based on alleged suppression of facts, misstatement, and collusion. The petitioner, a company incorporated under the Companies Act, imported fabrics under seven Bills of Entry and sought a "Duty Free Replenishment Certificate" license for tax exemption, which led to a show cause notice alleging misuse of the license for different fabrics.

Details of the Judgment:

1. Violation of Principles of Natural Justice:
The petitioner alleged a violation of principles of natural justice due to the denial of personal hearing and cross-examination by the respondents. The petitioner requested personal hearing and cross-examination in letters dated 19.08.2010 and 23.10.2010, which were not granted by the respondents. The respondents argued that the petitioner did not specifically request cross-examination and that granting it would not yield new information. However, the court found that the petitioner's request for cross-examination was clear in the letter dated 23.10.2010, and the court emphasized the importance of allowing cross-examination in cases involving allegations of criminality.

2. Cross-Examination Request:
The petitioner provided a list of persons to cross-examine, including officials from JDGFT, Mumbai, Customs at Nhava Sheva, and Customs at Tuticorin. The respondents objected to the request for cross-examining officials without specifying their names. The court dismissed this objection, stating that the officials serving at the time of the incident are known to the respondents and should be made available for cross-examination.

3. Alternate Remedy and Penalty Imposition:
The respondents raised the issue of the petitioner having an alternate remedy, suggesting that the petitioner should file an appeal instead of a writ petition. However, the court noted that the writ petition has been pending since 2014 and did not direct the petitioner to pursue an appeal. Additionally, the court highlighted that the penalty imposed under Section 114A requires a fair process, including personal hearing and cross-examination when allegations of criminality are involved.

4. Remittal of the Matter:
In light of the violation of principles of natural justice, the court remitted the matter back to the authorities, directing them to grant personal hearing and allow cross-examination, especially of the listed individuals provided by the petitioner. The authorities were instructed to complete the inquiry within six months from the date of the court's order.

5. Conclusion:
The writ petition was allowed by the court with the direction for a fair process involving personal hearing and cross-examination. No costs were awarded, and the connected miscellaneous petition was closed as a result of the judgment.

This summary provides a detailed overview of the judgment, highlighting the key issues addressed by the court and the specific directions given in response to the violation of principles of natural justice in the case.

← Previous Next →