2015 (5) TMI 801 - HC - Customs

Imposition of penalty u/s 112 - Confiscation of goods - Jurisdiction of Commissioner - Held that - After adjudication had taken place on the show cause notice dated 15.01.2013; which, called upon the petitioner to, inter alia, render explanation vis-a-vis the tentative view of the respondent as to why its registration should not be revoked in terms of the 2010 Regulations. Since, it is a question of lack of jurisdiction, this court under Article 226 of the Constitution can entertain the petition, notwithstanding the alternate remedy of an appeal under the aforementioned regulation The Commissioner of Customs became functus officio upon passing the order of adjudication dated 18.11.2013. It is not disputed by the learned counsel for respondent no.2 that the said respondent could have filed an appeal against the adjudication order, if it was dissatisfied or aggrieved by the order passed by the Commissioner of Customs. It appears that, respondent no.2, has not preferred an appeal - impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
1. Imposition of penalty and confiscation of goods on a courier company under the Customs Act, 1962.
2. Discrepancy in penalties imposed on the courier company and a non-existent entity.
3. Jurisdictional validity of the impugned order passed by the Commissioner of Customs under the Courier Imports and Exports Regulations, 2010.

Analysis:

Issue 1: Imposition of penalty and confiscation of goods
The petitioner, a courier company, received a show cause notice dated 15.01.2013, calling for explanations regarding the revocation of its registration under the Courier Imports and Exports Regulations, 2010. The adjudicating officer imposed a penalty of Rs. 1 lac on the petitioner under Section 112(a) of the Customs Act, 1962, and ordered the confiscation of goods valued at Rs. 74,97,500. The order stated that the goods would vest in the Central Government and be disposed of within one month. The petitioner filed a reply to the show cause notice on 15.03.2013. Despite the imposition of penalties, the petitioner abetted improper importation without facing further penalties under the 2010 Regulations.

Issue 2: Discrepancy in penalties
A penalty of Rs. 5 lacs was imposed on a non-existent entity, Mr. P.K. Tiwari, while the petitioner faced a penalty of Rs. 1 lac. This discrepancy raised questions as to the reason behind penalizing an entity that does not exist more than the courier company. The judgment highlighted the unusual nature of this distinction, especially when the importer was deemed non-existent by the respondents.

Issue 3: Jurisdictional validity of the impugned order
The impugned order, passed by the Commissioner of Customs on 10.01.2014, suspended the petitioner's registration pending further action for revocation under the 2010 Regulations. The court questioned the jurisdiction of the Commissioner to pass such an order after the adjudication on the show cause notice. The court held that the Commissioner became functus officio upon passing the adjudication order on 18.11.2013 and set aside the impugned order. The judgment emphasized that the court could entertain the petition under Article 226 of the Constitution due to the lack of jurisdiction, despite the availability of an appeal under the Regulations.

In conclusion, the High Court set aside the impugned order, allowing the petitioner relief from the penalties imposed under the Customs Act and the 2010 Regulations. The judgment clarified the jurisdictional boundaries of the Commissioner of Customs and highlighted the discrepancies in penalizing a non-existent entity more than the courier company.