2025 (3) TMI 1203 - HC - Customs

Maintainability of petition - availability of alternative remedy - Diversion of imported goods - walnut kernels - allegation in the said Show Cause Notice was that the goods which were imported were not exported back and were in fact diverted to the domestic market - HELD THAT - The Court is of the view that the Petitioners ought to be relegated to avail of the remedy against the impugned Order-in-Original before the CESTAT as done in the connected case. In Nitin Nagpal v. Union of India Anr. 2025 (3) TMI 1149 - DELHI HIGH COURT this Court had directed the Court is of the view that the Petitioners ought to be relegated to avail of the remedy against the impugned Order-in-Original before the CESTAT. This Court has not examined any of the grounds which have been raised by the Petitioners. All objections are kept open. The Petitioners are free to raise all their grounds of challenge to the impugned order before CESTAT. Accordingly the Petitioners are relegated to avail of their appellate remedy before CESTAT. The Petitioners are free to raise all their grounds of challenge to the impugned order before CESTAT. This Court has not examined any of the grounds which have been raised by the Petitioners. All objections are kept open. If the CESTAT finds it relevant the cross-examination of the ICAR scientists before the Principal Commissioner in the connected matters may be taken into consideration for adjudication of the appeals. Considering the nature of the matter and the submissions made today in the unique facts and circumstances of these cases following the order passed in the similar matter involving the same petitioners the pre-deposit for filing the appeal is reduced to 3.75%. This order shall not be treated as a precedent. Petition disposed off.

Summary

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

• Whether the impugned Order-in-Original, which orders the confiscation of goods under the Customs Act, 1962, is legally sustainable.
• Whether the Petitioners were denied the opportunity to cross-examine scientists from the Indian Council of Agricultural Research (ICAR), and if so, whether this constitutes a violation of their rights.
• Whether the Petitioners should be relegated to seek appellate remedies before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), and if the pre-deposit requirement should be reduced.

ISSUE-WISE DETAILED ANALYSIS

1. Legality of the Order-in-Original

The relevant legal framework involves the Customs Act, 1962, under which the goods were deemed liable for confiscation. The Court did not delve into the merits of the Order-in-Original, as it directed the Petitioners to avail themselves of the appellate remedy before CESTAT. The Court maintained that it had not examined any grounds raised by the Petitioners, thus leaving all objections open for consideration by CESTAT.

2. Denial of Cross-Examination of ICAR Scientists

The Petitioners argued that their inability to cross-examine ICAR scientists constituted a procedural irregularity. The Court acknowledged this argument but did not make a determination on its merits, instead suggesting that if CESTAT finds it relevant, the cross-examination of the ICAR scientists before the Principal Commissioner in connected matters may be considered during the appeal process.

3. Relegation to Appellate Remedy and Pre-Deposit Requirement

The Court decided that the Petitioners should pursue their remedy before CESTAT, similar to a connected case involving the same parties. The Court reduced the pre-deposit requirement to 3.75% in light of the unique facts and circumstances of the case, following a precedent set in a related matter. The reduction of the pre-deposit is not to be treated as a precedent for future cases.

SIGNIFICANT HOLDINGS

The Court's significant holdings include:

• The Petitioners are directed to avail themselves of the appellate remedy before CESTAT, with all grounds of challenge to the impugned order being open for consideration.
• The Court has not examined the merits of the grounds raised by the Petitioners, preserving their right to raise all objections before CESTAT.
• The pre-deposit required for filing the appeal is reduced to 3.75%, considering the nature of the matter and prior related decisions. This reduction is explicitly stated not to serve as a precedent.
• If deemed relevant by CESTAT, the cross-examination of ICAR scientists in related matters may be considered during the appeals process.

The petitions are disposed of with these directions, and all pending applications are also disposed of accordingly.