2018 (1) TMI 1099 - HC - Customs

PSU - import of automatic machines - goods were imported for home consumption and certain compliances were not made - Held that - this Court is not a forum to resolve these matters. There are remedies under the Customs Act, 1962. The order that is really in issue is dated 28th August, 2003 but issued on 3rd September, 2003. That order itself records that the show cause notice is dated 3rd October, 1997. There was no reply given to this notice. These are not satisfactory state of affairs even by a PSU. If its financial position is precarious, it could not have held back the dues and which were legitimate, due and payable in terms of an order. Now, we have a request for fresh adjudication into the same show cause notice. We do not deem it fit and proper to extend such facility or grant an opportunity at this belated stage unless the interests of Revenue are secured. Purely on the facts and circumstances of this case and without this order being treated as a precedent in future cases, including of a public sector undertaking, we direct that if the petitioner pays the amount of differential duty in terms of the communication dated 24th August, 2017 - petition disposed off.

Summary

Issues:
1. Petitioner seeking writs under Article 226 to challenge orders issued by Respondents.
2. Dispute regarding import of goods and payment of duty by the Petitioner.
3. Claim of non-receipt of show cause notice and lack of opportunity to be heard.
4. Denial of benefit of project import by Respondent no.2.
5. Petitioner's belief as a Government of India Enterprise affecting decision to not file an appeal.
6. Attempts made by Petitioner to resolve the dispute through correspondence and legal avenues.
7. Respondent's argument against entertaining the petition due to alleged delay and laches.
8. Court's analysis of the case and decision on the matter.

Detailed Analysis:

1. The Petitioner sought writs under Article 226 to challenge the impugned orders issued by the Respondents, including quashing an order dated 28.03.2003 and a letter dated 24.8.2017. The Petitioner, a public sector undertaking engaged in manufacturing, imported goods for production activities and paid provisional duty under the Custom Tariff and Project Import Regulations, 1986.

2. The Petitioner claimed that certain compliances were not met, leading to the denial of the benefit of project import by Respondent no.2. Despite attempts to resolve the issue through correspondence and legal means, the matter remained unresolved, and the Petitioner was directed to pay the balance amount by a communication dated 24th August, 2017.

3. The Petitioner alleged non-receipt of the show cause notice and lack of opportunity to be heard before the ex parte order was passed on 28th August, 2003. The Petitioner, believing itself to be a Government of India Enterprise, did not file an appeal initially, but later made efforts to address the issue through various channels.

4. The Respondent argued against entertaining the petition, citing alleged delay and laches on the part of the Petitioner in seeking remedies under the Customs Act, 1962. The Court considered the timelines and actions of both parties in the adjudication process.

5. After analyzing the facts and circumstances of the case, the Court held that the Petitioner's failure to pay the balance amount despite partial payments was not satisfactory, even for a PSU. The Court directed the Petitioner to pay the amount within three months to have the show cause notice adjudicated afresh, emphasizing the need to secure the interests of Revenue.

6. The Court clarified that its decision in this case should not set a precedent for future cases involving public sector undertakings. It allowed a fresh adjudication of the show cause notice if the Petitioner complies with the payment directive within the specified timeframe, failing which the Respondents can initiate recovery proceedings by coercive means. The Court instructed the Respondents to hold all recovery proceedings in abeyance for the three-month period.