Madras High Court
M/S.Fuso Glass India Pvt.Ltd vs The Assistant Director General Of ... on 9 June, 2021
W.P.No.12498 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 09.06.2021
CORAM
THE HONOURABLE MR. JUSTICE S.M.SUBRAMANIAM
W.P.No.12498 of 2021
and
W.M.P.No.13270 of 2021
M/s.Fuso Glass India Pvt.Ltd.,
Represented by its Legal Head
Mr.Madanlal Chowatia
No.91, Poonamallee High Road,
Egmore, Chennai – 600 084. ..Petitioner
Vs.
1.The Assistant Director General of Foreign Trade,
5th Floor, Shastri Bhavan Annexe,
No.26, Haddows Road,
Chennai – 600 006.
2.The Joint Commissioner (EODC-Advance)
Office of the Commissioner of Customs,
Chennai -IV Commissionerate,
Custom House, No.60, Rajaji Salai,
Chennai – 600 001. ..Respondents
Prayer : Writ Petition filed under Article 226 of the Constitution of India, to
issue a Writ of Certiorari, calling for the records relating to the impugned
order-in-original no.OINO/81721/2021 dated 22.03.2021 passed by the 2nd
respondent in F.No.S45/565/2015-DEEC-EODC(Sea) and quash the same.
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W.P.No.12498 of 2021
For Petitioner : Mr.Hari Radhakrishnan
For Respondents : Mr.Rajnish Pathiyil
Senior Panel Counsel
ORDER
The relief sought for in the present writ petition is to quash the
order in original issued by the 2nd respondent in proceedings dated
22.03.2021.
2.The order impugned is issued by the Joint Commissioner under
the provisions of the Customs Act, confirming the demand of the customs
duty and further, imposed penalty.
3.The petitioner company is engaged in the business of Glass,
Import/Export and processing. The petitioner company had obtained
advance authorisation dated 24.03.2015 for import of clear float glass and
polyvinyl butyl. The petitioner company had an export obligation to export
double layered laminated glass of a value of USD 498368.68. After
fulfilling the export obligation, the petitioner company had submitted an
application dated 21.01.2016 to the Zonal Director General of Foreign
Trade, Chennai. The said application submitted for obtaining an export
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W.P.No.12498 of 2021
obligation discharge certificate and in support of the said application, the
petitioner had submitted the original advance authorization. Form-ANF-4F,
original export promotion copies of the 11 shipping bills mentioned above,
copies of the bills of entry and Appendix-23 certified by the Chartered
Accountant. In response, the Assistant Director General of Foreign Trade
issued a deficiency letter dated 25.01.2016, calling upon the petitioner to
submit the bank realization certificates in respect of the exports made by
them. The petitioner states that the said certificate was also submitted vide
their letter dated 15.12.2017. Thereafter, there was no response from the
Zonal DGFT, Chennai.
4.The Joint Commissioner of Customs / second respondent issued
a show cause notice dated 06.11.2020, calling upon the petitioner to show
cause as to why customs duty amounting to Rs.20,70,798/-(Rupees Twenty
Lakhs Seventy Thousand Seven Hundred Ninety-Eight only) should not be
demanded from the petitioner for allegedly non-fulfilling the export
obligation caused upon them in terms of advance authorization dated
24.03.2015. The show cause notice was further proposed to confiscate the
raw material imported by the petitioner and also impose penalty under
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W.P.No.12498 of 2021
Section 112(a) of the Customs Act, 1960. The petitioner submitted a reply
dated 04.12.2020 to the Superintendent of Customs, informing him that they
had fulfilled the export obligation and that an application was already filed
with the 1st respondent on 21.01.2016. The petitioner states that all the
copies of shipping bill and related documents were also submitted. The
petitioner meanwhile sent reminders to the 1st respondent seeking issuance
of the export obligation discharge certificate. The second respondent was
requested to keep the adjudication proceedings in abeyance till a decision
was taken by the first respondent. However, without considering any of
these requests made by the petitioner, the impugned-Order-in-Original dated
22.03.2021, confirming the demands of customs duty of Rs.20,70,798/-
(Rupees Twenty Lakhs Seventy Thousand Seven Hundred Ninety-Eight
only) was issued. The order also imposed redemption file of Rs.9,80,000/-
(Rupees Nine Lakhs Eighty Thousand only) and penalty of Rs.2,00,000/-
(Rupees Two Lakhs only).
5.The learned counsel for the petitioner contended that the
petitioner themselves are aware of the appellate remedy available under the
statute against the impugned order dated 22.03.2021. However, the
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W.P.No.12498 of 2021
impugned order has been passed without awaiting the decision of the
licensing authority. Therefore, they have chosen to move the present writ
petition. Further, the impugned order does not disclose the evidence
submitted by the petitioner regarding the fulfillment of export obligation
and therefore, the order impugned is non-speaking in this regard.
6.Thus, it is made clear by the petitioner that they are very much
aware of the appellate remedy contemplated under the provisions of the
Customs Act and in spite of that, the present writ petition is filed on the
ground that the impugned order has been passed without awaiting the
decision of the licensing authority based on the letters sent by the writ
petitioner, stating that they have fulfilled the export obligations.
7.The learned Senior Panel counsel appearing on behalf of the
respondents disputed the said contentions by stating that the contentions of
the petitioner were considered by the authorities competent. The findings of
the impugned order, more specifically, in paragraph 12, it is elaborately
contended that the petitioner has not fulfilled the EODC. This apart, the
opportunities were given, personal hearing was also granted. Therefore, the
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W.P.No.12498 of 2021
contentions raised in this regard by the petitioner are incorrect and they are
bound to prefer an appeal, if at all they are advised to do so. In order to
avoid the appellate remedy and payment of deposit as contemplated under
the Statute, the present writ petition is filed and thus, the writ petition is to
be dismissed.
8.In this regard, it is relevant to extract paragraph 12 of the
impugned order, which reads as under:
“12. A demand notice dated 22.11.2017 was issued to importer.
As per www.eodc.online an order no.04/21/40/372/AM16 dated
04.11.2020 is in force, according to which a DEL Order
no.68/AM20 is issued to importer for not-fulfilling the EODC.
After issuance of SCN, the importer was given fifteen days time
to reply to the Show Cause Notice and personal hearings were
fixed on 13.11.2020, 20.11.2020 and 27.11.2020. The importer
sent a letter dated 01.12.2020, requesting for time till first week
of February, 2021. Subsequently, one more Personal Hearing
dated 15.02.2021 was granted to importer. Importer appeared
on the said date and stated that they had fulfilled the EODC and
requested for more time for submission of Redemption Letter.
Importer was given time till 15.03.2021. Again, importer failed
to submit redemption letter. Since the importer did not submit
Redemption Letter, the case is decided on the basis of
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W.P.No.12498 of 2021
documents available on record.”
9.This Court is of the considered opinion that the arguments made
on behalf of the petitioner as well as the counter arguments advanced by the
learned Senior Panel Counsel for the respondents reveal that certain
representations or letters or documents, if at all not considered by the
original authority, the said documents or letters or grounds are to be placed
before the appellate authority by preferring an appeal under Section 128(1)
of the Customs Act. Such disputed facts and circumstances between the
parties cannot be adjudicated in a writ proceedings under Article 226 of the
Constitution of India. Such an adjudication is to be done by verifying the
original documents and records, which all are to be produced by the
respective parties before the authorities competent or before the appellate
authorities. Thus, the petitioner has to exhaust the appellate remedy
contemplated under the statute.
10.Right of appeal is a valuable right of a person. The legislatures
intended to prescribe an appellate remedy in order to ensure that the orders
passed by the original authority or scrutinize and the justifiability and the
legality of those are tested by the higher authorities of the department. This
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W.P.No.12498 of 2021
being the legislative intention for enacting the law, more specifically,
prescription of an appellate remedy, then such a right cannot be denied nor
be dispensed with by the High Court by exercising powers under Article
226 of the Constitution of India. It is needless to state that the appellate
authority is empowered to adjudicate both the facts as well as the legal
grounds raised by the respective parties. They are exercising quasi-judicial
powers and therefore, the appellate authority is well within his powers to
summon the documents as well as hearing the parties and decide the appeal
on merits and in accordance with law.
11.In the present case, the appeal lies before the Commissioner of
Customs (Appeals) before whom the legal practitioners are permitted to test
the cases. When the litigants are having the benefit of legal assistance
through the legal practitioners, then such a remedy must be exhausted by the
aggrieved persons before approaching the High Court under Article 226 of
the Constitution of India as stated above. Disputed facts cannot be
adjudicated by the High Court nor a finding can be given in a writ
proceedings without exhausting the appellate remedy and therefore, the
petitioner is bound to approach the appellate authority under the Act. The
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W.P.No.12498 of 2021
introductory portion of the impugned order reveals that an appeal against
the impugned order lies with the Commissioner of Customs (Appeals), 5th
Floor, Customs House, Chennai, under Section 128(1) of the Customs Act,
1962, within 60 days of the communication of the impugned order. The
petitioner also is aware of the appellate remedy provided. However, by
raising certain legal grounds, litigants are attempting to sustain the writ
petition, which is not otherwise entertainable without exhausting the
appellate remedy contemplated under the provisions of the Customs Act.
Such a practice by the litigants cannot be encouraged by the High Court as
roving enquiry cannot be conducted in a writ proceedings under Article 226
of the Constitution of India. This apart, the litigants cannot be deprived of
availing the statutory remedy which is efficacious and further, the parties
would get an opportunity to scrutinize the original documents and put forth
their additional grounds, documents and evidences etc., This being the
wider scope of the appellate remedy, the parties must be allowed to exhaust
such remedy before approaching the High Court.
12.The powers of the High Court under Article 226 cannot be
extended to conduct an enquiry with reference to the disputed facts. High
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Court can go into the procedures contemplated by the competent authorities
with reference to the provisions of law and certainly not the decision itself.
In this context, it is to be understood that the appellate authority who is
empowered to reappreciate the facts with reference to the documents and
evidences and such a valuable opportunity cannot be denied to the litigants.
In the event of non-filing of an appeal, the litigants are not only deprived of
an opportunity, but the High Court cannot appreciate those facts culled out
with reference to the documents and evidences. The appellate authority in
the event of passing an order, with reference to the facts and the grounds
raised, it would be convenient for the High Court to consider the further
proceedings, if any in the light of the findings by the original authority as
well as by the appellate authority. These aspects are vital in order to form a
clear opinion, which would be of paramount importance to render justice.
Thus, the importance of an appeal under a statute cannot be undermined by
the High Court by dispensing with the appellate remedy.
13.This Court has elaborately considered the issues with reference
to preferring a statutory appeal before approaching the High Court under
Article 226 of the Constitution of India in the case of M/s.Sri Sathya
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W.P.No.12498 of 2021
Jewellery vs. The Principal Commissioner of Customs, Chennai – VII
reported in Manu/TN/3216/2021 and the relevant paragraphs are extracted
hereunder:
“7.In order to avoid the Pre-Deposit, which is
contemplated under the Statute, the practice of filing writ
petitions is prevailing in the High Court and the High Court
cannot encourage such practice and the appellate remedy
contemplated under the Act is to be exhausted in all
circumstances and only under extraordinary circumstances, in
order to mitigate injustice, the High Court can intervene and
not otherwise. Such power of dispensing with the appeal
remedy is to be exercised sparingly and not in a routine
manner. The learned Senior Standing Counsels reiterated that,
in respect of the writ petitions on hand, the original assessment
order has been passed either by the Joint Commissioner or by
the Commissioner of Customs. Against such original orders
passed by the original authorities under the provisions of the
Customs Act, an appeal is contemplated under Sections 128
and 129 of the Customs Act, respectively. Without exhausting
the appellate remedy, the writ petitioners have filed these writ
petitions, and therefore, the writ petitions are liable to be
dismissed.
8.With reference to the appellate remedy, the Hon'ble
Division Bench of this Court in W.A.No.640 of 2021
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[M/s.Fourceess Diamond Pvt. Ltd. and another v. The Joint
Commissioner of Customs (Air Cargo), Meenambakkam,
Chennai] delivered a judgment on 25.02.2021 and the relevant
paragraphs are extracted hereunder :
“8.After elaborately hearing the learned counsel for
the appellants and the learned Senior Standing Counsel
appearing for the respondent, we are of the view that the issues
raised in the writ petition are not purely questions of law, but
mixed questions of fact, which would require a process of
adjudication. Such matters cannot be decided by a Writ Court
based on affidavits. Therefore, we do agree with the ultimate
conclusion of the learned Writ Court that the appellant should
avail the alternate remedy available under the Act.
9.For the reasons, which we have assigned in the
preceding paragraph, the Writ Appeal stands dismissed and the
appellants are granted 60 days time from the date of receipt of
a copy of this judgment to file an appeal before the
Commissioner of Customs (Appeals) and if the same is filed,
the Commissioner of Customs (Appeals) shall entertain the
appeal, without reference to the limitation as the writ petition
was filed before this Court in the year 2016, which is well
within the period of limitation, had the appellants filed appeals
before the Commissioner of Customs (Appeals) at the relevant
point of time.
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W.P.No.12498 of 2021
10.Since the learned counsel for the appellants
submitted that the certified copy of the impugned order was
filed in the writ petition, the Registry is directed to return the
impugned original order filed in the writ petition, after
retaining a photostat copy. No costs. Consequently, connected
miscellaneous petition is closed.”
11.This Court is of the considered opinion that all
such grounds raised on merits are to be adjudicated with
reference to the documents and evidences to be produced and
the scope of the writ petition under Article 226 of the
Constitution of India cannot be expanded so as to exercise the
powers of the appellate authority in the matter of examination
or scrutiny of original documents and evidences produced by
the respective parties. The very purpose of the statutory
appeal is to scrutinize the orders passed by the original
authorities, and therefore, the legislative intention in this
regard is to be scrupulously followed in the mater of
adjudication of merits with reference to the documents and
evidences.
12.In common parlance, Statutes contain appeal
provisions. In some of the Statutes, there are two-tier appeal
provisions in order to ensure that the facts, grounds, evidences
are appreciated and the grievances are redressed in the
manner known to law. Such appeal provisions are provided
with the legislative intention to provide remedy to the
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aggrieved persons. The High Court, in normal circumstances,
would not interfere nor dispense with the appellate remedy.
13.The High Court cannot adjudicate the facts and
merits with reference to documents and evidences. Trial is not
entertainable under Article 226 of the Constitution of India.
All such procedural aspects are to be followed by complete
adjudication/trial by the original authorities as well as by the
appellate authorities under the provisions of the Statute and
the powers under Article 226 of the Constitution of India is
limited to find out whether the processes contemplated under
the Statutes and the procedural aspects are followed by the
competent authorities as well as the appellate authorities or
not. The High Court, under Article 226 of the Constitution of
India, is not expected to usurp the powers of the appellate
authorities by adjudicating the merits of the matter on certain
documents and evidences. In the event of adjudication of
merits under Article 226 of the Constitution of India in the
absence of complete trial with reference to the documents and
evidences, there is a possibility of miscarriage of justice, and
therefore, the High Court is expected to be cautious, while
entering into the venture of adjudication of certain merits with
reference to the original documents and evidences produced by
the respective parties to the lis. This being the legislative
intention, High Court is expected to trust the institutional
authorities as well as the hierarchy of institutions
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contemplated under the Statutes. Institutional respects are of
paramount importance for providing complete justice to the
parties and the various stages of adjudication are important
for the purpose of correcting omissions, commissions, errors in
appreciation of evidence, etc. Powers of the High Court under
Article 226 of the Constitution of India cannot be extended nor
widened so as to allow lay hands on the facts and
circumstances by conducting the trial, nor certain facts and
circumstances with reference to documents and evidences can
be assumed or presumed or inference can be drawn, which is
not preferable.
15.As far as the judgment of the Hon'ble Supreme
Court of India in the case of M/s.Canon India Private Limited
(supra) is concerned, as rightly pointed out by the learned
Senior Standing Counsels appearing on behalf of the
respondents that the matter went to the Hon'ble Apex Court by
way of regular appeal and the Hon'ble Supreme Court of India,
while adjudicating the final orders passed by the Appellate
Tribunal, formed an opinion that the issuance of show cause
notice itself was by an improper authority. Thus, by citing the
said finding, the appellate remedy otherwise provided under
the Statute cannot be dispensed with, and in the event of
accepting the said contention, in all such cases, every litigant
will approach the High Court by way of writ petition bypassing
the appellate remedy, which is not desirable and cannot be
accepted. As observed earlier, Institutional respect is of
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paramount importance. Even the point of jurisdiction,
limitation, error apparent on the face of the record, are on
merits and all are to be adjudicated before the appellate
authority and the appellate authority, more specifically, the
Appellate Tribunal or the Commissioner (Appeals), as the case
may be, is empowered to adjudicate all such legal grounds
raised by the respective parties and make a finding on merits.
Thus, usurping the powers of the appellate authorities by the
High Court by invoking its powers under Article 226 of the
Constitution of India is certainly unwarranted. The parties
must be provided an opportunity to approach the appropriate
authorities for redressal of their grievances in the manner
known to law. In the event of entertaining all such writ
petitions, the High Court will not only be over-burdened, but
usurping the powers of the appellate authority is certainly not
desirable.
18.Large number of writ petitions are filed without
exhausting the statutory appeal remedies and High Court is
also entertaining such writ petitions in a routine manner.
Keeping such writ petitions pending for long time would cause
prejudice to the interest of the assessee also. Thus, such
statutory provisions regarding the appeal are to be decided at
the first instance, enabling the litigants to avail the remedy by
following the procedures as contemplated under law. Such
writ petitions are filed may be on the ground of jurisdiction or
otherwise. However, the Courts are expected to ensure that all
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such legal grounds available to the parties are adjudicated
before the proper Forum and only after exhausting the
statutory remedies, writ petitions are to be entertained. In the
absence of exhausting such remedies, High Court is loosing the
benefit of deciding the matter on merits as the High Court
cannot conduct a trial or examine the original records in the
writ proceedings under Article 226 of the Constitution of India.
Thus, the Courts shall not provide an unnecessary opportunity
to the assessee to escape from the liability merely on the
ground on jurisdictional error, which is rectifiable.
19.This being the facts and circumstances
established, this Court has no hesitation in arriving at a
conclusion that the petitioners are bound to exhaust the
appellate remedy, either under Section 128 or Section 129 of
the Customs Act, respectively. Thus, the petitioners are at
liberty to approach the appellate authority and file an appeal
by following the procedures contemplated and by complying
with the conditions to prefer the appeal, within a period of 60
days from the date of receipt of a copy of this order, and in the
event of filing of appeal(s) by the writ petitioners within a
period of 60 days, all such appeals are directed to be
entertained without reference to the period of limitation, and
the matters are to be adjudicated on merits and in accordance
with law and by affording opportunity to all the parties, and
the appeals are to be disposed of as expeditiously as possible.”
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14. With these observations, the writ petition stands dismissed.
No costs. Consequently, connected miscellaneous petition is closed.
09.06.2021
Kak
Index : Yes/No
Speaking /Non-speaking order
To
1.The Assistant Director General of Foreign Trade,
5th Floor, Shastri Bhavan Annexe,
No.26, Haddows Road,
Chennai – 600 006.
2.The Joint Commissioner (EODC-Advance)
Office of the Commissioner of Customs,
Chennai -IV Commissionerate,
Custom House, No.60, Rajaji Salai,
Chennai – 600 001.
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W.P.No.12498 of 2021
S.M.SUBRAMANIAM, J.
Kak
W.P.No.12498 of 2021
09.06.2021
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