2019 (7) TMI 345 - HC - Customs

Availability of alternate and efficacious remedy of appeal - requirement with the pre-deposit - effective opportunity of cross-examination denied - HELD THAT - Since we do not propose to entertain these petitions on ground of availability of alternate and efficacious remedy to the petitioners, we refrain from making any observations on merits of rival contentions on the aspect of alleged breach of provisions of Section 138B of the said Act or alleged flaw in the decision making process. This is not fit case to exercise our discretion and entertain the present petitions, when, the petitioners have an alternate and efficacious remedy of appeal available to them under the said Act.

Issues Involved:
1. Challenge to the order-in-original dated 24th October 2017.
2. Alleged violation of principles of natural justice.
3. Non-compliance with Section 138B of the Customs Act, 1962.
4. Availability of alternate remedy and requirement of pre-deposit under Section 129E of the Customs Act, 1962.

Detailed Analysis:

1. Challenge to the order-in-original dated 24th October 2017:
The petitioners challenged the order-in-original dated 24th October 2017 issued by the Additional Director General, DRI (Adjudication), which confirmed the demands for customs duty and imposed penalties under the Customs Act, 1962. The impugned order was common to all petitions.

2. Alleged violation of principles of natural justice:
The petitioners argued that the impugned order was made in violation of the principles of natural justice. They contended that the Adjudicating Authority failed to examine the persons whose statements were recorded under Section 108 of the Customs Act before admitting such statements in evidence. The petitioners claimed they were deprived of the opportunity to cross-examine these persons, which was contrary to the law laid down in various judgments, including J & K Cigarettes Ltd. vs. Collector of Central Excise, Slotco Steel Products Pvt. Ltd. vs. Commissioner of C.Ex., and G.T.C. Industries Limited vs. Union of India.

3. Non-compliance with Section 138B of the Customs Act, 1962:
The petitioners asserted that the Adjudicating Authority ignored the mandate of Section 138B of the Customs Act, which requires examination of persons whose statements are recorded before such statements can be admitted in evidence. The petitioners' request for cross-examination was allegedly not granted, leading to a flawed decision-making process.

4. Availability of alternate remedy and requirement of pre-deposit under Section 129E of the Customs Act, 1962:
The court noted that the petitioners had an alternate remedy of appeal to the Customs, Central Excise, and Service Tax Appellate Tribunal under Section 129A of the Customs Act. This appeal required a pre-deposit of 7.5% of the amount demanded. The petitioners argued that the availability of an alternate remedy should not bar the court from entertaining their petition under Article 226 of the Constitution of India, especially in cases of natural justice violations or flawed decision-making processes. They also sought a waiver of the pre-deposit requirement.

Court's Observations and Decision:
The court observed that the petitioners had not provided a satisfactory explanation for their absence before the Adjudicating Authority on crucial dates, despite being offered the opportunity for cross-examination. The court noted that the petitioners' complaint was more about the adequacy of the opportunity rather than the complete absence of it. The court emphasized that the issue of adequate opportunity and the alleged violation of Section 138B required an in-depth examination, which could be effectively undertaken by the appellate authority rather than in summary proceedings under Article 226.

The court also referred to previous judgments, including J & K Cigarettes Ltd., Slotco Steel Products Pvt. Ltd., and GTC Industries Ltd., and concluded that these cases did not persuade the court to bypass the alternate remedy available under the Customs Act. The court declined to waive the pre-deposit requirement, citing the statutory mandate of Section 129E and the constitutional validity upheld in previous cases.

Conclusion:
The court dismissed all the petitions, stating that the petitioners had an alternate and efficacious remedy of appeal available under the Customs Act. The court did not find it appropriate to exercise its discretion to entertain the petitions or waive the pre-deposit requirement. The observations made were prima facie and not intended to foreclose the contentions of either party in the appellate proceedings. There was no order as to costs.

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