2024 (10) TMI 689 - HC - Customs

Imposition of conditions on petitioner for two bills of entries including bond and bank guarantee - violation of principles of natural justice - HELD THAT - The emails and notices required the petitioner to produce some documents in connection with the two bills of entry. However, none of these emails or notices even hinted at any proposal requiring the petitioner to furnish a full bond and bank guarantee to secure 100 per cent of the differential duty. None of the emails or notices even referred to the provisions of Rule 6 (4) (C) of the CAROTAR Rules 2020. Accordingly, no opportunity was granted to the petitioner or its customs broker to submit their say on the proposal for submitting a full bond and bank guarantee. The principles of natural justice would require the party noticee to have a fair idea of the case it must meet. Petition disposed off.

Summary

Issues:
Imposition of conditions on petitioner for two bills of entries including bond and bank guarantee, Compliance with principles of natural justice in imposing conditions, Failure to communicate proposal for bond and bank guarantee, Legal basis for imposing conditions, Requirement for fair opportunity to respond before imposing conditions.

Analysis:
The High Court of Bombay heard a case where the petitioner challenged the conditions imposed on them for two bills of entries, requiring a bond and bank guarantee. The petitioner imported "Unwrought Platinum" and faced detention of goods by the customs officers. The petitioner contended that the conditions were imposed without statutory backing and without proper communication. The court examined the compliance with natural justice principles and found a failure in providing a fair opportunity to respond. The respondents argued that notices and emails were sent to the petitioner, but the court observed that these did not mention the proposal for a bond and bank guarantee, leading to a lack of opportunity for the petitioner to present their case. The court agreed with the petitioner's counsel that there was a breach of natural justice in this matter.

The court highlighted that if the petitioner had been informed of the proposal regarding the bond and bank guarantee, they could have responded appropriately. The court referred to a Delhi High Court decision supporting the petitioner's stance that such conditions cannot be imposed arbitrarily. Consequently, the court set aside the conditions imposed on the petitioner for the two bills of entry. The court directed the petitioner to file a response on the issue of furnishing a bond and bank guarantee within a week. The 2nd respondent was instructed to hear the petitioner or its representatives on the proposed conditions and pass an appropriate order within two weeks of receiving the petitioner's response. The court emphasized that the decision-making process must adhere to the principles of natural justice, leaving all contentions open for further consideration.

In conclusion, the court disposed of the rule without imposing any costs, instructing all parties to act according to the court's order. The judgment focused on the procedural fairness in decision-making rather than the merits of the decision itself, emphasizing the importance of providing a fair opportunity for parties to respond before imposing significant conditions.