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2019 (11) TMI 1361 - HC - CustomsMaintainability of petition - alternative remedy of appeal - Duty Free Import Authorisation (DFIA) Scheme - Focus Product Scheme (FPS) - Focus Market Scheme (FMS) - clandestine imports of paper - fictitious/non-existent, scrips, or scrips in which the quantum of exemption available had been fraudulently enhanced in the EDI system - demand of customs duty u/s 28(4) of the Customs Act, 1962 - levy of interest and penalties - opportunity for cross-examination not provided - principles of natural justice. HELD THAT - Para 11 (1) of the Order-in-Original specifically refers to the communication, dated 30th July, 2019, addressed by the petitioner. We also find, from a reading of the said paragraph, that the Commissioner referred to the requests made by the petitioner in the said communication, as well as the fact that responses, to some of the said requests, had been furnished, to the petitioner, by the department, at earlier stages during the proceedings - It cannot, therefore, be said that the Order-in-Original has proceeded in ignorance of, or by overlooking, the communication, dated 30th July, 2019, of the petitioner. It is true that the impugned Order-in-Original makes no specific reference to the order, dated 6th September, 2019 supra, passed by this Court. However, this Court had, in the said order, merely directed that the application, dated 30th July, 2019, be considered and decided by the Commissioner. Inasmuch as the impugned Order-in-Original has taken stock of the said communication, as well as the demands of the petitioner therein, we do not find the lack of reference, in the impugned Order-in-Original, to the order dated 6th September, 2019, passed by this Court, sufficient justification to set aside the impugned Order-in-Original. Cross-examination - HELD THAT - The request, of the petitioner, was for permission to examine, rather than cross-examine, the said officers. Be that as it may, the Commissioner has taken a considered decision not to summon the officers, who had assessed the concerned imports, in the witness box, as he was required to decide whether the imports themselves were in accordance with law, or not, and whether the petitioner was complicit in effecting the allegedly illegal imports. The justifiably of this decision of the Commissioner is, in our view, not amenable to examination under Article 226 of the Constitution of India, as there is an efficacious alternate remedy available, to the petitioner, by way of statutory appeal before the Customs, Excise and Service Tax Appellate Tribunal, under Section 129A of the Act. A reasonable justification for avoidance cannot be constituted, by the petitioner, of resort to the statutorily provided appellate remedy. It can be said that there is no fatal flaw, in the impugned Order-in-Original, as would justify its premature decapitation, at our hands, without requiring the petitioner to avail, in the first instance, the appellate remedy provided by the statute - as an efficacious alternate remedy is provided, to the petitioner, under Section 129B of the Act, by way of appeal to the Tribunal, any interference with the impugned Order-in-Original, would, in the facts and circumstances of the present case, be unjustified. Petition dismissed with no costs.
Issues Involved:
1. Demand of Customs Duties. 2. Imposition of Penalties. 3. Liability of Goods to Confiscation. 4. Request for Cross-Examination and Additional Documents. 5. Availability and Use of Alternate Remedies. Issue-wise Detailed Analysis: 1. Demand of Customs Duties: The petitioner, M/s Sumat Pershad & Sons, challenged the Order-in-Original No.06/2019/Sunil Tated/Commr/Exp/ICD/TKD, dated 11th October 2019, which demanded customs duties amounting to ?5,40,11,525 under Section 28(4) of the Customs Act, 1962, along with interest under Section 28AA. The duty was allegedly evaded using fictitious or overvalued scrips in the EDI system by Sharafat Hussain, in collusion with customs officers. The petitioner claimed innocence, stating that the scrips were registered in the EDI system and appeared genuine. 2. Imposition of Penalties: The impugned order imposed a penalty of ?5,40,11,525 under Section 114A and ?1,00,00,000 under Section 114AA of the Customs Act on the petitioner. The Commissioner found the petitioner complicit in the fraudulent activities of Sharafat Hussain and Vinod Kumar Pathror, and thus liable for penalties. The petitioner argued that the penalties were unjust as they had no reason to doubt the genuineness of the scrips registered in the EDI system. 3. Liability of Goods to Confiscation: The goods imported by the petitioner were held liable to confiscation under clauses (d) and (o) of Section 111 of the Customs Act. The Commissioner concluded that the imports were made without paying appropriate duties due to the fraudulent use of non-existent or overvalued scrips. The petitioner contended that they should not be held responsible for the fraud committed by others, especially since the scrips were registered in the EDI system. 4. Request for Cross-Examination and Additional Documents: The petitioner requested cross-examination of officers and additional documents through a communication dated 30th July 2019. The Commissioner rejected these requests, citing the Supreme Court judgment in Surjeet Singh Chhabra vs. Union of India 1997 (89) ELT 646 (SC), which stated that cross-examination of officers was not necessary in such cases. The petitioner argued that the rejection of their requests without proper consideration rendered the order void ab initio. 5. Availability and Use of Alternate Remedies: The court noted that the petitioner had an efficacious alternate remedy available under Section 129A of the Customs Act, by way of an appeal to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The petitioner’s reluctance to approach the Tribunal was due to the mandatory pre-deposit of 7.5% of the duty demand. The court held that the existence of an alternate remedy precluded interference under Article 226 of the Constitution, unless there was a stark violation of principles of natural justice or other fundamental flaws. Conclusion: The court dismissed the writ petition, emphasizing that the petitioner should avail the statutory appellate remedy provided under the Customs Act. The court found no fatal flaw in the impugned Order-in-Original that would justify bypassing the appellate process. All pending applications were disposed of accordingly.
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