2017 (10) TMI 990 - HC - Customs

Maintainability of petition - Principles of Natural Justice - gist of the allegation against the petitioners is that they have diverted the goods bonded in their private bonded private warehouses without payment of duty - whether the case on hand is one where there has been violation of principles of natural justice or whether the petitioners were afforded reasonable opportunity to put forth their defence? - Held that - The facts clearly demonstrate that the Department had afforded sufficient and more than adequate opportunity to the petitioners. The conduct of Mr.Saraf clearly would show that he had been avoiding the proceedings. Prima facie it appears that but for the arrest and detention by CBI, he would not have cooperated with the department in giving the statements under Section 108 of the Act. Thereafter, he has failed to cooperate in the adjudication process. The charge being diversion of bonded goods without payment of appropriate customs duty. The charge is a serious charge and if the petitioners were totally innocent and if they had not committed any violation, they ought not to have avoided the adjudication. Thus, the facts clearly show that the petitioners failed to avail the opportunity granted to them. Therefore, the plea that the petitioners did not have adequate opportunity is a plea to be rejected. Petition dismissed being not maintainable.

Summary

Issues:
Challenging Order-in-Original, Adequate Opportunity for Defense, Violation of Principles of Natural Justice, Alternative Remedy of Appeal

Challenging Order-in-Original:
The petitioners filed Writ Petitions challenging Order-in-Original No.54566/2017 passed by the respondent, alleging diversion of goods from private bonded warehouses without duty payment. The petitioners sought to set aside the order and remand the matter for fresh consideration, emphasizing the lack of sufficient opportunity before the respondent to present their case adequately.

Adequate Opportunity for Defense:
The petitioners, companies with private bonded warehouse licenses, were accused of diverting goods without duty payment. The Department provided multiple opportunities for the petitioners to respond, including personal hearings rescheduled several times. However, the petitioners failed to submit replies or attend hearings, leading to the Department proceeding with the adjudication and passing the impugned order.

Violation of Principles of Natural Justice:
The Court analyzed whether there was a violation of natural justice principles and if the petitioners were given a reasonable opportunity to present their defense. It was observed that the Department had indeed afforded sufficient opportunities, but the conduct of one of the directors indicated avoidance of proceedings, casting doubt on the claim of inadequate opportunity.

Alternative Remedy of Appeal:
Considering the seriousness of the charge under the Customs Act regarding diversion of bonded goods without duty payment, the Court held that the Writ Petitions were not maintainable. The petitioners were directed to avail the alternate remedy of appealing to the CESTAT, emphasizing that they failed to utilize the opportunities provided, making the plea of inadequate opportunity untenable.

In conclusion, the Court dismissed the Writ Petitions, allowing the petitioners to pursue the alternative remedy of appeal while emphasizing the importance of availing opportunities for defense in legal proceedings under the Customs Act.