Madras High Court
M/S.Kiruba Export vs The Commissioner Of Customs on 28 September, 2021
W.A.No.2465 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 28.09.2021
CORAM
THE HON'BLE MR.JUSTICE T.S.SIVAGNANAM
and
THE HON'BLE MR.JUSTICE SATHI KUMAR SUKUMARA KURUP
Writ Appeal No.2465 of 2021
and
C.M.P.No.15873 of 2021
M/s.Kiruba Export,
Rep. by its Proprietor
Mrs.S.Vimaladevi
No.84, Chennimalai Road,
Perundurai,
Erode District – 638 052. .. Appellant
-vs-
1.The Commissioner of Customs, Chennai-IV,
O/o. The Commissioner of Customs, Chennai-IV,
Custom House, No.60, Rajaji Salai,
Chennai – 01.
2.The Deputy Commissioner of Customs (BRC-DBK)
O/o. The Commissioner of Customs, Chennai-IV,
Custom House, No.60, Rajaji Salai,
Chennai – 01. .. Respondents
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W.A.No.2465 of 2021
Appeal under Clause 15 of Letters Patent against the order dated
30.07.2021 in W.P.No.15897 of 2021 and set aside the same.
For Appellant : Mr.Derrick Sam
for Mr.A.Mohamed Ismail
For Respondents : Mr.Mohana Murali
Senior Standing Counsel
JUDGMENT
(Delivered by T.S.Sivagnanam, J.)
This Writ Appeal filed by the appellant-assessee questions the
correctness of the order dated 30.07.2021, by which the writ petition filed
by the appellant in W.P.No.15897 of 2021 was dismissed on the ground that
the appellant should avail the alternate remedy available under the
provisions of the Customs Act.
2.It is no doubt true that alternate remedy is available under the
provisions of the various enactments, especially in taxing statutes Courts will
always be slow in entertaining the writ petitions. It is equally true that
Courts have also drawn distinction to cases which can be entertained by way
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W.A.No.2465 of 2021
of a writ petition and carved out certain exceptions. One such exception is
that there has been violation of principles of natural justice. The appellant
before us has pitched their case on the ground of violation of principles of
natural justice. The respondent issued notice dated 01.03.2021 referring to
the show cause notice dated 10.03.2017 stating that as per the available
records in the Office, the proof of realization of export proceeds for Shipping
Bill with Drawback amounting to Rs.13,63,336/- is pending. Therefore, the
respondent directed the appellant to produce all relevant documents and
fixed the date of personal hearing as 08.03.2021, 09.03.2021 and
10.03.2021. The appellant appeared before the Deputy/Assistant
Commissioner of Customs, Drawback Section-BRC, Chennai and requested
for two weeks time for submission of Bank Realization Certificate. The
concerned Officer has made an endorsement in the said representation,
which is to the following effect.
“As directed by DC [DBK-BRC] extension of time
has been extended upto 06.04.2021 to produce (BRC)
negative certificate. If failed to produce the documents
within the fix time limit the case may be decided on
available documents.”
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W.A.No.2465 of 2021
3.In terms of the above endorsement, the appellant has been granted
extension of time upto 06.04.2021 though not by the first respondent but by
the second respondent, who is the concerned Officer of the said Department.
Much prior to the expiry of the said date, the Order-in-Original dated
17.03.2021 has been passed on the ground that the appellant failed to give
any objections to the notice dated 01.03.2021, did not availed the
opportunity of personal hearing granted on those three days and therefore,
the proposal in the show cause notice is confirmed. By letter dated
05.04.2021, the appellant has filed the BRC-Negative Statement in the office
of the respondent as could be seen from the date seal dated 07.04.2021.
However, by then the first respondent having passed an order had become
functus officio and had no power to review this decision. Therefore, the
appellant filed the writ petition challenging the said order which has been
dismissed on the ground of availability of alternate remedy.
4.The learned counsel for the appellant submitted that the dates fixed
for providing opportunity of personal hearing cannot be mechanically fixed
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W.A.No.2465 of 2021
and the opportunity of personal hearing is for the purpose of giving a fair
opportunity to the noticee and in the instant case, three dates were pre-fixed
by the first respondent even while issuing the show cause notice. The
Central Board of Excise and Customs [CBEC] in Circular No.1053/2/2017-
CX dated 10.03.2017 has issued a master circular on show cause notices,
adjudication and recovery proceedings and in paragraph 14.3 of the Circular
deals with personal hearing which reads as hereunder:
“14.3 Personal hearing : After having given a fair
opportunity to the noticee for replying to the show cause
notice, the adjudicating authority may proceed to fix a date
and time for personal hearing in the case and request the
assessee to appear before him for a personal hearing by
himself or through an authorised representative. At least
three opportunities of personal hearing should be given
with sufficient interval of time so that the noticee may
avail opportunity of being heard. Separate
communications should be made to the noticee for each
opportunity of personal hearing. In fact separate letter for
each hearing/extension should be issued at sufficient
interval. The Adjudicating authority may, if sufficient
cause is shown, at any stage of proceeding adjourn the
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W.A.No.2465 of 2021
hearing for reasons to be recorded in writing. However, no
such adjournment shall be granted more than three times
to a noticee.”
5.In terms of the above Circular, the Adjudicating Authority has to
proceed to fix a date and time for personal hearing and atleast three
opportunities should be given with sufficient interval of time so that the
noticee may avail opportunity of being heard and separate communication
should be made to the noticee for each opportunity of personal hearing.
Further, it has been directed that separate letter for each hearing/extension
should be issued on sufficient interval and if sufficient cause is shown in
any stage of the proceedings, the Adjudicating Authority can adjourn the
hearing for the reasons to be recorded in writing and no adjournment should
be granted more than three times to the noticee. The procedure adopted by
the first respondent in issuing a show cause notice and fixing three dates for
personal hearing which are pre-fixed dates would fall foul of the above
Circular.
6.The facts clearly show that adequate opportunity was not afforded
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W.A.No.2465 of 2021
to the appellant. It may be true that the show cause notice is of the year
2017, yet the Customs Department did not take any action till issuance of
notice dated 01.03.2021. On receipt of the notice, the appellant sought for
two weeks time to produce the Bank Realization Certificates and time was
granted by the concerned Officer till 06.04.2021. Much before the said date,
the Order-in-Original has been passed. Therefore, we find that there has
been violation of principles of natural justice. That apart, the appellant has
submitted the certificates in the form of negative statement on 07.04.2021.
If those certificates are verified and the stand taken by the appellant is found
to be correct, then the proceedings itself had to be dropped. Therefore, we
are convinced that the appellant's case will fall within one of the exceptions
that have been carved out by the Hon'ble Supreme Court for entertaining the
writ petition. In this regard, we rely on the observations of the Hon'ble
Supreme Court in the case of Whirlpool Corporation vs. Registrar of
Trade Marks, Mumbai and others [(1998) 8 SCC 1].
7.Thus, for the above reasons, the writ appeal is allowed, the order
passed in the writ petition is set aside and the Order-in-Original
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W.A.No.2465 of 2021
No.81386/2021 dated 17.03.2021 is set aside and the matter is remanded to
the first respondent for fresh consideration. The BRC-Negative Statement
submitted by the appellant on 07.04.2021 shall be verified by the concerned
authority and after affording an opportunity of personal hearing to the
appellant, the case shall be adjudicated afresh on merits and in accordance
with law. No costs. Consequently, connected miscellaneous petition is
closed.
(T.S.S., J.) (S.S.K., J.)
28.09.2021
Index: Yes/ No
Speaking Order : Yes/ No
cse
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W.A.No.2465 of 2021
To
1.The Commissioner of Customs, Chennai-IV,
O/o. The Commissioner of Customs, Chennai-IV,
Custom House, No.60, Rajaji Salai,
Chennai – 01.
2.The Deputy Commissioner of Customs (BRC-DBK)
O/o. The Commissioner of Customs, Chennai-IV,
Custom House, No.60, Rajaji Salai,
Chennai – 01.
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W.A.No.2465 of 2021
T.S.Sivagnanam, J.
and
Sathi Kumar Sukumara Kurup, J.
cse
W.A.No.2465 of 2021
28.09.2021
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