Calcutta High Court
Jaju Petro Chemical Pvt. Ltd. & Anr vs The Commissioner Of Customs (Port) & Ors on 6 July, 2017
Author: Debangsu Basak
Bench: Debangsu Basak
W.P. No. 487 of 2015
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
ORIGINAL SIDE
JAJU PETRO CHEMICAL PVT. LTD. & ANR.
Versus
THE COMMISSIONER OF CUSTOMS (PORT) & ORS.
BEFORE:
The Hon'ble JUSTICE DEBANGSU BASAK
Date : 6th July, 2017.
For Petitioners : Mr. Sudhir Kumar Mehta, Advocate
For Respondent No.1 : Mr. Somnath Ganguly, Advocate
Mr. Bhaskar Prasad Banerjee, Advocate For Respondent No.2 : Mr. Kaushik Dey, Advocate The Court : An order in original dated February 27, 2015, passed by the adjudicating authority acting in respect of a show cause-cum-demand notice issued under Section 124 read with Section 28 of the Customs Act, 1962 and the reply thereto is under consideration in the present writ petition.
Learned advocate for the petitioner submits that, the petitioner had imported certain materials into India. The petitioner had applied under Section 18(1) of the Customs Act, 1962. The application under Section 18(1) of the Act of 1962 has not been 2 finally adjudicated upon under Section 18(2) of such Act. Without a final adjudication under Section 18(2) of the Act of 1962, the authorities have sought to invoke Section 28 of the Act of 1962, read with Section 124 thereof. He submits that, the authorities are entitled to invoke Section 28 of the Act of 1962, if and only if, the petitioner is guilty of not paying the levy or short-paying the same or for the reasons specified in Section 28 thereof. None of the grounds available to invoke Section 28 of the Act of 1962 exists in the facts of the present case. The levy payable by the petitioner is yet to be adjudicated upon, for the petitioner to have defaulted in payment of the same and Section 28 being invoked.
The petitioner had obtained provisional release of the goods upon an application for such purpose. 34 consignments were taken possession of by the Customs authorities. 10 were sent for testing. The balance 24 are yet to be tested. In respect of all the 34 consignments, the petitioner has not been informed of the final assessment under Section 18(2) of the Act of 1962. He refers to the affidavits-in-opposition filed by both the Customs authorities as also the Director of Revenue Intelligence (DRI) and submits that, both the authorities have not given any details as to whether or not the application under Section 18(2) of the Act of 1962 has attained finality. On the contrary, he submits that, the two affidavits support the fact that, the Customs authorities are yet to dispose of the 3 application finally under Section 18(2) of the Act of 1962. Consequently he submits that, the invocation of Section 28, read with Section 124 of the Act of 1962 is bad in law.
Learned Advocate for the petitioner assails the show cause notice-cum-demand as also the impugned order on the ground of breach of principles of natural justice. He submits that, the last date of hearing before the adjudicating authority was on April 17, 2014. The matter was adjourned sine die. Subsequently, the authorities have passed the impugned order dated February 27, 2015 without affording the petitioner any further opportunity of hearing. The matter was adjourned sine die on April 17, 2014 in view of the then prevailing situation in law. He submits that, a batch of writ petitions had received consideration by this Hon'ble Court and that, the issues raised in such batch of writ petitions are similar to that involved in the present writ petition. Such writ petitioners were disposed of by a judgment and order of the Division Bench dated November 10, 2014.
He submits that, the authorities had proceeded against numerous importers of such material. According to him, all such proceedings were disposed of by the adjudicating authority by holding that, unless a final assessment under Section 18(2) of the Act of 1962 was made, Section 28 of the Act of 1962 cannot be invoked. He relies upon orders of the adjudicating authority passed in those proceedings in support of such contention.
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Learned Advocate for the petitioner next submits that, the petitioner being similarly situated and circumstanced as that of the other importers, the department is not entitled to take a different view so far as the import of the petitioner is concerned. Moreover, the petitioner having obtained the provisional release of the materials upon payment of the higher duty payable, it is for the authorities to take steps, in accordance with law, in the event they find any infraction on the part of the petitioner. In the factual situation, it cannot be said that, the petitioner is guilty of violating any provisions of the Customs Act, 1962 or for that matter, any provisions of law when the petitioner has offered to pay the duty under Section 18 of the Act of 1962. He submits that, there are two entry points so far as the assessment of duty payable of an imported goods is concerned. One is under Section 17 of the Act, 1962. Under Section 17 of the Act of 1962 a person who is aware of the duty payable makes a self- declaration and pays such duty. In the event the authorities find that, there is any misdeclaration in the duty paid under Section 17 of the Act of 1962, then the question of invocation of Section 28 of the Act of 1962 arises. However, Section 18 contemplates a situation where there is a doubt as to the quantum of duty payable and the importer leaves the calculation of the duty payable to the wisdom of the Customs authorities agrees to abide by such decision. In the present case, the petitioner upon a bonafide belief that, there are 5 justifiable grounds to make an application under Section 18(1) of the Act of 1962 had done so for the purpose of assessment of the duty payable in respect of the imported goods. Under Section 18(2) of the Act of 1962 the authorities are to make a final assessment. The authorities have not done so. Learned Advocate for the petitioner relying upon 2011(267) ELT 469 Calcutta (A.S.Syndicate Warehousing Pvt. Ltd. Vs. Commissioner of Customs Port), 2009(243) ELT 339 (Commissioner of Customs (Port)) vs. Mahesh India), 2006 (203) ELT 532 (SC) (Commissioner of Central Excise & Customs, Mumbai vs. ITC) and 1997 (94) ELT 8 (SC) (Commissioner of Central Excise, Bhubaneshwar vs. Rerolling Mills) submits that, where a show-cause notice is issued without jurisdiction or in the abuse of the process of law, a Writ Court should not hesitate to interfere even if it is at the stage of a show-cause notice. Moreover, there being no final assessment, a demand-cum-show-cause notice cannot be issued as the same is without jurisdiction.
Learned Advocate for the petitioner relies upon a judgment and order dated April 12, 2017 passed in WP 8120 (w) of 2017 (M/s. Wright Minerals Pvt. Ltd. & Anr. Vs. Directorate of Revenue Intelligence, Government of India & Ors.) and submits that, on a similar point the Court had allowed the writ petition.
The DRI and the Customs Authorities are represented.
6Learned Advocate for the Customs Authorities strenuously submits that, the fact scenario in the present case is different to those prevailing in the other proceedings. He submits that, there was a final assessment so far as the petitioner is concerned.
Learned Advocate for the DRI submits that, in the event the Court is pleased to set aside the impugned order, DRI should be permitted to take steps in accordance with law.
I have considered the rival contentions of the parties and the materials made available on record.
The petitioner had suffered a show-cause-cum-demand notice issued under Section 28 read with Section 124 of the Customs Act, 1962 dated July 19, 2013. The petitioner did not reply thereto.
The adjudication proceedings under Section 28 read with Section 124 of the Act of 1962 was taken up for consideration on different dates by the adjudicating authority. Upon consideration of the materials made available to it, it had initially found it prudent to adjourn such proceedings sine die on April 17, 2014. Thereafter the adjudicating authority sought to revive the proceedings unilaterally without notice to the petitioner and had passed the impugned order.
There are affidavits filed on behalf of the Customs Authorities and the DRI. Such affidavit does not disclose that the adjudicating authority had issued notice to the petitioner subsequent to April 17, 2014 when it had adjourned the proceedings sine die for a fresh date of hearing. Advocate for the petitioner had prayed for fresh date of hearing. Apparently, the adjudicating 7 authority had proceeded to dispose of the proceedings by the impugned order dated February 27, 2015 subsequent to adjourning the proceedings sine die on April 17, 2014 without further notice to the petitioner. On this score alone, the impugned order stands vitiated due to breach of principles of natural justice, not having given adequate notice to the petitioner for a hearing subsequent to April 17, 2014 for the impugned order dated February 27, 2015 to come into being. The other and the more substantial aspect of lack of jurisdiction of the authorities in issuing the show-cause notice-cum-demand notice itself requires consideration.
The petitioner had imported what is claimed to be slack wax. DRI had initiated an investigation on the suspicion of undervaluation. Such investigation conducted by DRI was commodity specific rather than importer specific. This fact appears from the impugned show-cause notice as also the affidavits of the authorities.
The records made available to Court establish that, the petitioner had applied under Section 18(1) for the purpose of assessment. Section 18(1) of the Customs Act, 1962 permits the importer, where he is unable to make self- assessment, to make a request to the proper officer for assessment. In the present case, the petitioner had done so. Under Section 18(2) of the Act of 1962, it is the duty of the officer concerned to inform the duty leviable on the goods imported as finally assessed. In the present case, a final assessment of the duty has not happened. Nothing has been placed on record to suggest otherwise. The Customs Authorities have invoked Section 28 of the Act of 1962 without a final 8 order of assessment. Section 28 of the Act of 1962 allows the Customs Authorities to recover duties not levied or short levied or erroneously refunded. In the present case, none of the situations contemplated under Section 28 has arisen. The duty is yet to be finally assessed for the petitioner to be said to be guilty of not paying the duty or paying short levy of the duty payable. The question of refund does not arise at all. Therefore, a failure contemplated under Section 28 of the Act of 1962 not happening, the authorities should not have invoked Section 124 of the Act of 1962. Section 124 of the Act of 1962 allows issuance of show-cause notice before confiscation of goods.
A writ petition assailing an order passed by a statutory authority is maintainable notwithstanding the existence of a statutory alternative remedy of appeal. The existence of a statutory alternative remedy of appeal is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution of India. Notwithstanding the availability of a statutory alternative remedy, a writ petition is maintainable in the event the impugned order is demonstrated to be without jurisdiction, is vitiated by fraud or malice or is perverse or passed in breach of the principles of natural justice. In the present case, the petitioner alleges that, the impugned order is without jurisdiction. There is a substance to such contention made on behalf of the petitioner. A final assessment under Section 18(2) of the Act of 1962 not happening, the Customs Authorities could not have levelled charges against the petitioner under Section 28 of the Act of 1962 read with Section 124 thereof.
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The present writ petition is directed against the final order of adjudication consequent upon a show-cause notice. It is not limited to the show- cause notice itself. However, as noticed in a Syndicate (supra), Mahesh India (supra), ITC Ltd. (supra) and Rerolling Mills (supra), a writ petition challenging a show-cause notice is maintainable, in the event it is established that, the show- cause notice was issued without jurisdiction or in the abuse of the due process of law. As noted above, the authorities could not have invoked Section 28 read with Section 124 of the Act of 1962 in the facts of the present case. The overwhelming inference, therefore, is that the impugned show-cause notice was issued without jurisdiction. The final order emanating out of the show-cause notice consequently suffers from the same defect.
In Wright Minerals Pvt. Ltd. (supra), in a similar situation, a show- cause notice was set aside and the authorities were permitted to proceed in accordance with law.
In view of the discussions above, the impugned order is set aside. The Customs Authorities are requested to complete assessment proceedings in accordance with law as expeditiously as possible. Both the DRI and the Customs Authorities are thereafter at liberty to take steps, in accordance with law, in the event, they find the petitioner to be guilty of infraction of any law after the final assessment.
WP No. 487 of 2015 is disposed of. There will be no order as to costs.
(DEBANGSU BASAK,J.) sn/s.chandra