Madras High Court
Ashish Mundhra vs The Commissioner Of Customs ... on 27 April, 2022
W.A.Nos.453 to 455 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 27.04.2022
CORAM :
THE HONOURABLE MR. JUSTICE R.MAHADEVAN
and
THE HONOURABLE MR. JUSTICE J.SATHYA NARAYANA PRASAD
Writ Appeal Nos.453 to 455 of 2022
and C.M.P.Nos.3273, 3278 & 3279 of 2022
Ashish Mundhra
...Appellant in W.A.No.453 of 2022
Abhishek Mundhra
...Appellant in W.A.No.454 of 2022
R.Mahaveer Pipada
...Appellant in W.A.No.455 of 2022
Versus
1.The Commissioner of Customs (Appeals – I),
O/o. The Commissioner of Customs (Appeals – I),
No.60, Rajaji Salai, Custom House,
Chennai – 600 001.
2.The Assistant Commissioner of Customs (Review Cell),
Chennai – I, Commissionerate
New Custom House,
Air Cargo Complex,
Meenambakkam,
Chennai – 600 027.
...Respondents in all W.As
Common Prayer:
Writ Appeals filed under Clause 15 of Letters Patent, praying to set
aside the order passed by the learned Judge in W.P.Nos.5910, 5908 & 12756
of 2021 dated 11.01.2022.
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W.A.Nos.453 to 455 of 2022
For Appellant in all W.As : Mr.Muralikumaran
for M/s.McGan Law Firm
For Respondents in all W.As : Mr.V.Sundareswaran,
Senior Panel Counsel
COMMON JUDGMENT
(Judgment of the Court was delivered by R.MAHADEVAN, J.)
Heard both sides and perused the materials placed before this court.
2.These Writ Appeals are directed against the common order dated
11.01.2021 passed by the learned Judge in W.P.Nos.5910, 5908 & 12756 of
2021 filed by the respective appellants herein.
3.According to the appellants, M/s.Mundhra Bullion Private Limited
was engaged in trading of bullion and one Abishek Mundhra (appellant in
WA.No.454 of 2022), who was the former director of the said company, on
14.10.2013, carried gold weighing 15.16 Kgs from Kolkata to Chennai, in his
hand baggage, after duly declaring the possession of the same to the airport
authorities. But, the officials of the DRI seized the same and without any
jurisdiction, issued show Cause Notices dated 13.04.2014 to the appellants and
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W.A.Nos.453 to 455 of 2022
other notices. Thereafter, pursuant to the order dated 19.08.2019 passed in
WP.No.10816 of 2015 filed by Abishek Mundhra and the order dated
24.01.2020 passed in WP.Nos.5550 and 5523 of 2015 filed by others,
adjudication process commenced and the adjudicating authority, without
affording an opportunity of cross examining the witnesses, passed the order-
in-original dated 13.07.2020 bearing No.87/2020-21 Commissionerate – I,
followed by two Corrigendums dated 15.07.2020 and 20.07.2020, thereby,
ordering confiscation of the seized goods with an option to redeem the same
on payment of fine in lieu of confiscation, besides imposing penalty on the
appellants.
4.The appellants further averred that challenging the aforesaid order of
the adjudicating authority, the appellants preferred statutory appeals under
section 128 of the Customs Act, 1962, before the first respondent, while the
second respondent filed cross Appeals. However, without providing sufficient
opportunity to the appellants to put forth their case, the first respondent
dismissed the appeals preferred by the appellants and passed the order-in-
appeal dated 27.11.2020. For better understanding, the operative portion of the
said order is extracted below:
“i. I set aside the denovo order no.87/2020-21-
Commissionerate – I dt.13.07.2020 passed by the Additional
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W.A.Nos.453 to 455 of 2022
Commissioner of Customs (Adjudication – Air) in its entirety, while
allowing the departmental appeal (C4/I/153/O/2020-AIR) filed
U/Sec.129 D(4) of Customs Act, 1962.
ii. I confiscate absolutely the 296 nos. of cut rectangular
foreign origin gold bars weighing 15.160 kgs., valued @
Rs.4,53,89,040/- seized vide mahazar dt.14.10.2013 U/Sec.111 (d) & (I)
r/w. Sec.120(1) of Customs Act, 1962 covered in the Additional
Director, DRI, Chennai Zonal Unit's show cause notice vide
F.No.VIII/48/22/2013-DRI (CZU) dt.13.04.2014.
iii. I confiscate the small black colour hand bag, packing
materials such as plastic container, Bengali Newspapers used for
covering the gold bars and the rubber bands U/Sec.118 of the Customs
Act, 1962.
iv. The appeal of Abishek Mundhra (C4/I/139/O/2020-AIR) is
rejected, as it has no merits.
v. I impose a penalty of Rs.1 Crore (Rupees One Crore only)
U/Sec.112(a) of the Customs Act, 1962 upon Abishek Mundhra,
Director, M/s.Mundhra Bullion Private Limited, Chennai having
address at No.20, Thulasingam Street, Sowcarpet, Chennai – 600 079.
vi. The appeal of Ashish Mundhra (C4/I/150/O/2020-AIR) is
rejected, as it has no merits.
Vii. I impose a penalty of Rs.1 Crore (Rupees One Crore
Only)U/Sec.112(a) of the Customs Act, 1962 upon Ashish Mundhra,
Managing Director, M/s.Mundhra Bullion Private Limited, Chennai
having address at No.20, Thulasingam Street, Sowcarpet, Chennai –
600 079.
viii. I impose a penalty of Rs.1 Crore (Rupees One Crore Only)
U/Sec.112(a) of the Customs Act, 1962 upon R.Mahaveer Pipada
residing at No.29, Block A, 101, Sankeswarar Niketan, Zinda Sahib
Street, Kondithope, Chennai – 600 079.
ix. I impose a penalty of Rs.1 Crore (Rupees One Crore Only)
U/Sec.112(a) of the Customs Act, 1962 upon Raju @ Mukesh, Kolkata.
x. The appeal of Goutam Chakraborty (C4/I/202/O/2020-AIR) is
rejected, as it has no merits.
xi. I impose a penalty of Rs.50 Lakhs (Rupees Fifty Lakhs only)
U/Sec.112(a) of the Customs Act, 1962 upon Goutam Chakraborty
having address at 6G/1A/5, Gopal Chandra Bose Lane, Kolkata –
700 050. ”
Aggrieved over the same, the appellants in WA.Nos.453 and 454 of 2022 filed
writ petitions in WP.Nos.5908 and 5910 of 2021, in which, on 10.03.2021,
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W.A.Nos.453 to 455 of 2022
after recording the undertaking given by the learned counsel that the appellants
confined the writ petitions to the statutory violations and agitated the other
issues before the CESTAT, the learned Judge granted an order of interim stay
in respect of recovery of penalty under section 112(a) of the Act, alone. The
relevant paragraphs of the said order are quoted below for ready reference:
“ Mr. J.Vasu, learned Junior Standing Counsel accepts
notice for the respondent and seeks some time to obtain
instructions and file a counter qua the enhancement of penalty
under Section 112 (a) of the Customs Act, 1962, as a prima facie
case is made out only in regard to this issue.
2. Mr. Muralikumaran, learned counsel appearing for the
petitioner would state that the petitioner intends to file an appeal
as against the ejection of the appeal by the first appellate authority
on all other points, and this is recorded.
3. As regards the enhancement of penalty, the order-in
original dated 13.07.2020, impose the penalty of a sum of Rs.12
lakhs under Section 112 (a) of the Act. The provisions of Section
128A (3) of the Act provides for the procedure in disposal of
appeal by the commissioner (Appeals) and also vests powers of
enhancement upon the authority. However, in terms of the proviso
thereto, the Commissioner (Appeals) is required to call upon the
assessee to show cause notice why such enhancement should not
be made, prior to proceeding with such enhancement. In the
present case such opportunity is stated to have been denied.
4. There shall be an order of interim stay of recovery of
penalty under Section 112(a) of the Act alone, till the next date of
hearing”
Thereafter, all the writ petitions were dismissed as infructuous, on the ground
of availability of alternative appeal remedy to the appellants, by a common
order dated 11.01.2022, which is impugned in these writ appeals.
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W.A.Nos.453 to 455 of 2022
5.The learned counsel for the appellants submitted that while the show
cause notice issued by the DRI itself is to show cause as to why the seized
goods should not be confiscated under sections 111(d) and 111(l) of the
Customs Act, 1962 r/w section 120(1) of the ibid Act, the first respondent
erred in confiscating the seized goods, that too, without following due process
of law as contemplated under section 128A of the Customs Act, 1962; and the
first respondent ought not to have relied on the statements of the alleged
witnesses to the show cause notice to reverse the order of the Adjudicating
Authority, when it was the specific contention of the appellants that despite an
opportunity of cross examining the witnesses, was sought for by the
appellants, the same was not granted and an order-in-original was passed. The
learned counsel further submitted that at the time of admission of the writ
petitions filed by the appellants challenging the order-in-appeal passed by the
first respondent, the learned counsel undertook to agitate the issues other than
the statutory violation before the CESTAT and restricted the relief sought in
the writ petitions to that effect, which submission was recorded by the learned
Judge in her interim order dated 10.03.2021. However, without deciding the
issue relating to statutory violation on merits, the learned Judge erroneously
dismissed the writ petitions on the ground of alternative remedy, by the order
impugned herein. Therefore, the learned counsel sought to allow these writ
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W.A.Nos.453 to 455 of 2022
appeals by setting aside the order of the learned Judge passed in the writ
petitions.
6.Mr.V.Sundareswaran, learned Special Panel Counsel appearing for the
respondents produced a copy of the communication of the Deputy Director,
Directorate of Revenue Intelligence (DRI), Chennai, dated 20.04.2022,
received by him through e-mail, which reads as under:
“With respect to the above mentioned subject it is to intimate
that though DRI is not a respondent in the concerned WA, following
comments are being offered since it was specifically sought.
Since the prayer in the WA is against the justness of single judge
order, issue may be argued to remand back the case to the single
judge.”
Therefore, the learned counsel prayed that the matter may be remanded to the
learned Judge for fresh consideration.
7.Taking note of the facts and circumstances of the case and having
regard to the submissions made by the learned counsel on either side, the order
impugned herein is set aside and the matter is remanded to the learned Judge
for passing orders afresh, after deciding the issue relating to statutory
violation, on merits and in accordance with law, after affording due
opportunity to all the parties, as expeditiously as possible.
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W.A.Nos.453 to 455 of 2022
8.All these Writ Appeals are disposed of in the above terms. No costs.
Consequently, connected Miscellaneous Petitions are closed.
(R.M.D., J.) (J.S.N.P.,J.)
27.04.2022
mrr
Index : Yes/No
Speaking Judgement (or) Non-Speaking Judgement
To
1.The Commissioner of Customs (Appeals – I),
O/o. The Commissioner of Customs (Appeals – I),
No.60, Rajaji Salai, Custom House,
Chennai – 600 001.
2.The Assistant Commissioner of Customs (Review Cell),
Chennai – I, Commissionerate
New Custom House,
Air Cargo Complex,
Meenambakkam,
Chennai – 600 027.
https://www.mhc.tn.gov.in/judis
W.A.Nos.453 to 455 of 2022
R.MAHADEVAN, J.
and
J.SATHYA NARAYANA PRASAD, J.
mrr
Writ Appeal Nos.453 to 455 of 2022
27.04.2022
https://www.mhc.tn.gov.in/judis
