2003 (11) TMI 96 - HC - Customs

Summary

Issues Involved:
1. Challenge to the order of less charge demand.
2. Violation of provisions of law and principles of natural justice.
3. Non-speaking order.
4. Non-service of show cause notice.
5. Barred by the law of limitation.
6. Requirement of separate notices for each import.
7. Availability of an alternate efficacious remedy.

Detailed Analysis:

1. Challenge to the Order of Less Charge Demand:
The Petitioners challenged the order dated 13th April 1988, and subsequent communications, on the grounds that they violated legal provisions and principles of natural justice. The demand pertained to less charge amounts for imported goods, specifically high-pressure hydraulic synthetic rubber hoses, with the total disputed amount being Rs. 4,78,308/-.

2. Violation of Provisions of Law and Principles of Natural Justice:
The Petitioners argued that Section 28 of the Customs Act, 1962 mandates a show cause notice and an opportunity to be heard before confirming any demand. They contended that neither a show cause notice was served, nor was any opportunity to be heard provided. The Respondents failed to counter these claims either through correspondence or affidavits.

3. Non-Speaking Order:
The order dated 13th April 1988 was criticized for being a non-speaking order. It did not disclose the service of the show cause notice or provide justification for the quantified less charge amount. The Court emphasized that orders under Section 28 must be speaking orders, detailing reasons and justifications.

4. Non-Service of Show Cause Notice:
The Court found no evidence that the show cause notice was served on the Petitioners. The Respondents failed to provide any material or affidavit to prove service of the notice. The Court highlighted the necessity of serving a show cause notice and providing an opportunity to be heard, as per Section 28(1) and (2) of the Customs Act.

5. Barred by the Law of Limitation:
The demand was found to be barred by the law of limitation. The relevant imports occurred in 1979, and the demand notice was issued in 1988, well beyond the permissible period under Section 28. The Court noted the absence of any allegations of collusion or suppression of facts, which would have extended the limitation period to five years.

6. Requirement of Separate Notices for Each Import:
The Petitioners' contention that separate notices were required for each import was dismissed. The Court clarified that Section 28 does not necessitate separate notices for each import, only that the notice must be within the prescribed limitation period.

7. Availability of an Alternate Efficacious Remedy:
The Respondents argued that the Petitioners had an alternative remedy in the form of an appeal. However, the Court held that the apparent violation of statutory provisions and principles of natural justice justified the Petitioners' approach to the Court under writ jurisdiction.

Conclusion:
The Court allowed the petition, quashing the impugned order and setting aside the demand. The judgment underscored the importance of adhering to statutory requirements and principles of natural justice, emphasizing the necessity of serving a show cause notice and providing an opportunity to be heard before confirming any demand. The Petitioners were awarded costs, and the rule was made absolute in terms of prayer Clause 17(a).