2014 (12) TMI 228 - HC - Customs

Confiscation of goods - breach of principles of natural justice or not - Sections 111(d) and (m) of the Customs Act, 1962 - penalty under Section 112(a) - Denial of duty exemption under Notification No. 55/2003-Cus., dated 1-4-2003 - Redemption fine - Held that - when the dispute was raised with regard to the other material and contents of these certificates relied upon that it was decided by the department to form an expert panel. That also included the representatives of the assessee. The opinion of the expert panel, after examination, was taken on record. After conclusion of this, show cause notice was issued and impugned order was passed. In these circumstances, we are unable to accept the argument of Mr. Kantawala that any prejudice has been caused to the assessee by not permitting the panel members to be cross-examined. The Tribunal did not commit any error in holding that right to defend the proceedings which are inherent in such adjudication are in no way prejudiced, leave alone the conclusion of the department. The assessee could have in the teeth of this material and which was placed by it before the department was in a position to defend itself effectively. It had in its possession several documents including from the suppliers abroad. It is in these circumstances and where several opportunities were given to the assessee/appellant to make submissions with regard to the findings of the report of the expert panel that refusal to permit cross examination of some of the panel members was justified. It will not be correct to hold that irrespective of the facts and circumstances and in all inquiries, the right of cross examination can be asserted. Further, as held above which rule or principle of natural justice must be applied and followed depends upon several factors and as enumerated above. Even if there is denial of the request to cross examine the witnesses in a inquiry, without anything more, by such denial alone, it will not be enough to conclude that principles of natural justice have been violated. - Decided against assessee.

Issues Involved:
1. Confiscation of goods under Sections 111(d) and (m) of the Customs Act, 1962.
2. Imposition of penalties under Section 112(a) of the Customs Act.
3. Denial of duty exemption under Notification No. 55/2003-Cus.
4. Alleged breach of principles of natural justice due to denial of cross-examination of expert panel members.
5. Validity of the concurrent findings by the Adjudicating Authority and the Customs, Excise and Service Tax Appellate Tribunal.

Issue-wise Detailed Analysis:

1. Confiscation of Goods:
The investigation concluded with a show cause notice proposing to confiscate goods valued at Rs. 2,06,70,660/- under Sections 111(d) and (m) of the Customs Act, 1962. The Adjudicating Authority confirmed the confiscation with an option to redeem the goods on payment of a fine of Rs. 40 lakhs. The High Court upheld this decision, noting the discrepancies in the import documentation and the expert panel's findings that the imported cranes were not within the permissible time limit but were more than 10 years old.

2. Imposition of Penalties:
Penalties were imposed under Section 112(a) of the Customs Act on various parties involved, including a personal penalty of Rs. 10 lakhs each on the appellant firm and the supplier's India office. Additional penalties ranged from Rs. 1 lakh to Rs. 5 lakhs on other individuals. The High Court found no error in the imposition of these penalties, given the deliberate contravention of the law by the appellants to claim undue benefits.

3. Denial of Duty Exemption:
The benefit of Notification No. 55/2003-Cus. was denied, and the goods were ordered to be assessed on merits with differential duty demanded under Section 28 along with interest under Section 28AB. The High Court agreed with the lower authorities, stating that the conditions for the exemption were not fulfilled, and thus, the denial was justified.

4. Alleged Breach of Principles of Natural Justice:
The appellant argued that the refusal to permit cross-examination of the expert panel members constituted a breach of natural justice. The High Court examined precedents, including the cases of M/s. Kellogg India Pvt. Ltd. v. Union of India and Basudev Garg v. Commissioner of Customs, and distinguished them based on the facts. The Court concluded that no prejudice was caused to the appellant as the expert panel included representatives of the appellant, and sufficient opportunities were provided to contest the findings. The Court emphasized that not every breach of natural justice results in prejudice, and the appellant failed to demonstrate any substantial prejudice.

5. Validity of Concurrent Findings:
The High Court upheld the concurrent findings of the Adjudicating Authority and the Tribunal, noting that the factual position was undisputed and the materials relied upon were produced by the appellant itself. The Court found no merit in the appeal, emphasizing that the appellant's arguments were purely technical and did not involve any substantial question of law.

Conclusion:
The High Court dismissed the appeal, affirming the confiscation of goods, imposition of penalties, and denial of duty exemption. The Court found no breach of natural justice and upheld the validity of the concurrent findings by the lower authorities. The appeal was dismissed with no costs, and the notice of motion was also disposed of.

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