2017 (9) TMI 1093 - HC - Customs

Summon issued under Section 108 of the Act - The challenge to the impugned summons is on very limited ground stating that no useful purpose would be served by directing the petitioner to appear before the second respondent inasmuch as already the petitioner has appeared and statement has been recorded - mis-declaration of value of imported second hand machinery - natural justice - Held that - Much earlier the third respondent inspected the business premises of the petitioner and has also recorded statement and seized documents mobile phones computer hard disks etc. and once again to summon the petitioner for the very same purpose is only with a view to harass the petitioner and some how make the petitioner accept that he/they has/have under valued the value of the imported goods. According to the petitioner he has fully complied with the requirement and furnished the necessary document. However I find that in the impugned summons there is no direction to the petitioner to produce any documents which is under his control. Thus if the petitioner s presence is required for further questioning pertaining to certain information which they have subsequently secured the same should have been made known in the impugned summons. However this may not invalidate the summons by itself but can be stated to be in violation of the principles of natural justice. As mentioned earlier the summons cannot be quashed as no investigation can be interfered or thwarted at the very threshold. Petition dismissed - decided against petitioner.

Summary

Issues:
Challenge to summons issued under Section 108 of the Customs Act, 1962.

Analysis:
The petitioners, a partnership firm engaged in importing and trading second-hand printing machinery, filed Writ Petitions to quash summons issued by the Senior Intelligence Officer of the Directorate of Revenue Intelligence (DRI) under Section 108 of the Act. The petitioners argued that they had cooperated with the investigation, and the repeated summoning was a coercive action to compel them to accept duty liability. They contended that all relevant documents had been seized during a previous search, and there was no need for further summoning. The petitioners claimed that the summons were vague and lacked clarity on the purpose, leading to apprehension of arrest. The petitioners sought relief, stating the actions of the second respondent were not in accordance with the law.

The DRI, represented by learned counsel, argued that the documents seized indicated undervaluation of imported machinery to evade customs duty. Statements recorded from the partners revealed the motive behind the undervaluation. The DRI emphasized the need for further questioning and confrontation of retrieved documents before proceeding with a show cause notice. Referring to a specific case, the DRI maintained that the investigation was essential to uncover customs duty evasion.

The Court considered the arguments from both sides and analyzed the legal position regarding challenging summons through a Writ Court. While acknowledging the jurisdiction of the investigating agency to issue summons, the Court noted the petitioner's concerns about being compelled to accept undervaluation. The Court observed discrepancies in the summons issued and directed the respondents to issue fresh summons clearly stating the purpose and documents required for the hearing. The Court declined to set aside the impugned summons but granted relief to ensure the petitioner's rights to know the purpose of the summons were upheld.

In conclusion, the Writ Petitions were dismissed, with no costs imposed, and the connected miscellaneous petitions were closed. The Court's decision aimed to balance the investigative requirements with the petitioner's rights, emphasizing the need for clarity and adherence to principles of natural justice in issuing summons under the Customs Act, 1962.