Madras High Court
Shrilus vs The Assistant Commissioner on 28 January, 2022
WP(MD)No.1039 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 28.01.2022
CORAM
THE HON'BLE MR. JUSTICE M.SUNDAR
W.P(MD)No.1039 of 2022
and W.M.P.(MD)No.876 of 2022
Shrilus ... Petitioner
-Vs-
The Assistant Commissioner,
Office of the Assistant Commissioner of Customs,
No.66, Beach Road,
Tuticorin – 628 001. ... Respondent
Prayer: Writ Petition filed under Article 226 of Constitution of India, to
issue a Writ of Certiorarified Mandamus, calling for the records pertaining
to the impugned in C.No.VIII/10/09/2021-Adjn in O.R.No.09/2021-22-DPU
TIN dated 01/12/2021 by the respondent and quash the same as illegal and
consequently direct the respondent to release his vehicle namely Yamaha
FZS bearing its registration No.TN 96 E 3015 to him forthwith.
For Petitioner : Mr.M.Pitchai Muthu
For Respondent : Mr.B.Vijay Karthikeyan,
Senior Standing Counsel for Customs.
1/10
https://www.mhc.tn.gov.in/judis
WP(MD)No.1039 of 2022
ORDER
In the captioned main writ petition 'a show cause notice (SCN) dated
01.12.2021 bearing reference C.No.VIII/10/09/2021-Adjn in O.R.No.
09/2021-22-DPU TIN' {hereinafter 'said impugned SCN' for the sake of
convenience and clarity} has been assailed.
2. Mr.M.Pitchai Muthu, learned counsel on record for the writ
petitioner and Mr.B.Vijay Karthikeyan, learned Senior Standing Counsel for
Customs, who has accepted notice on behalf of the lone respondent are
before this Court. Owing to the narrow compass in which captioned matter
turns, with the consent of learned counsel on both sides, captioned main
writ petition was taken up and heard out.
3. Said impugned SCN has been issued under Section 124 of the
'Customs Act, 1962' ('said Act' for the sake of convenience and clarity).
Said impugned SCN has been issued owing to an alleged occurrence on
07.07.2021 in the wee hours (02.30 hours). A perusal of the said impugned
SCN brings to light that the allegation against the petitioner, two others and
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WP(MD)No.1039 of 2022
one Thiru Baskar is that they were carrying about 87 bags of turmeric and
the same was intended to be illegally exported to Sri Lanka bypassing the
procedure under said Act. Suffice to say that two two wheelers besides
turmeric in 87 bags estimated to weigh qua 2500 kgs approximately were
seized. Said impugned SCN has been issued to the writ petitioner and the
aforementioned three others. Learned counsel for writ petitioner submits
that impugned SCN was served on the writ petitioner on 10.12.2021 and the
writ petitioner was called for a personal hearing on 24.01.2021 but
instructions are not readily available (for both sides) as to what transpired
on 24.01.2021.
4. Learned Revenue Counsel submits that his instructions are that the
writ petitioner has not responded to the impugned SCN but he does not have
specific instructions about personal hearing scheduled to have been held on
24.01.2021. In any event, there is no disputation or disagreement about the
fact that the writ petitioner has not sent a reply or responded to the said
impugned SCN.
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WP(MD)No.1039 of 2022
5. The captioned matter turns on challenge to said impugned SCN.
As already alluded to supra said impugned SCN has been issued under
Section 124 of said Act calling upon the noticees (four in number including
the writ petitioner) to show cause as to why the seized turmeric, two
wheelers and packing bags should not be confiscated under various
provisions of said Act (sections 113, 115, 119 etc.,). The said impugned
SCN also calls upon the noticees to show cause as to why penalty under
Section 114(iii) of the said Act should not be imposed. Learned Revenue
counsel submitted that this is a challenge to an SCN and in an earlier
challenge to an SCN, another Hon'ble Single Judge in Nitin Nayar case
[Nitin Nayar Vs. The Commissioner of Customs vide order dated
24.06.2014 made in W.P.(MD)No.4174 of 2014 and reported in 2014 (310)
ELT 294 (Mad)] had negatived the prayer. It is not clear if there is any intra
Court appeal. Be that as it may, learned counsel for petitioner submits that
Nitin Nayar case is clearly distinguishable on facts as that was a case where
the noticees had not co-operated with the investigation and it is on that basis
that writ petition came to be dismissed. A perusal of Nitin Nayar case does
bring to light that it was a case where the writ petitioner was found to be not
cooperating with the enquiry but the matter does not end there. Nitin Nayar
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WP(MD)No.1039 of 2022
case cannot be applied to the case on hand for another significant reason.
The reason is, the prayer in Nitin Nayar case was for a mandamus to release
the lorries which were alleged to have been used regularly for smuggling
betel nuts. In the case on hand, the said impugned SCN itself has been
assailed and a consequential prayer for release of two wheelers has been
made. Therefore, the Court in Nitin Nayar's case did not have an occasion
to go into the grounds on which SCN can be assailed.
6. This Court now embarks upon the exercise of considering the
grounds on which an SCN can be assailed. The law in this regard is well
settled (in a long line of authorities) and it is only in cases where SCN has
been issued without jurisdiction or where there is violation of NJP (Natural
Justice Principles) besides some other grounds such as well settled position
of law of a higher Court being disregarded, an SCN can be interfered with.
Though there is a long line of authorities, this Court deems it appropriate to
rely on a recent judgment of Hon'ble Supreme court made in Coastal
Container case [order dated 26.02.2019 in Civil Appeal No.2276 of 2019,
Union of India & Ors. Vs. Coastal Container Transporters Association &
Ors]. The facts are captured in paragraph 4 of Coastal Container case and
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WP(MD)No.1039 of 2022
the same reads as follows:
'4. Necessary facts, in brief, are as under :
First respondent is an association, whose members are
transport operators engaged in the business of transportation
of goods entrusted by the customers. By way of impugned
show cause notices, the appellants have proposed to demand
service tax from the respondents under the category of “cargo
handling service”, while it is the case of the respondents that
the service which is being provided by them, falls under the
taxable category of “goods transport agency”. The
respondents, to bolster their case, have placed reliance upon
circulars dated 06.08.2008 and 05.10.2015 issued by the
Central Board of Excise and Customs (CBEC).
Based upon the intelligence gathered by the officers of
Rajkot Regional Unit, which revealed that several business
entities including respondent nos.2 and 3 who are engaged in
doing the business of cargo handling in west coastal region
but had got themselves registered under “good transport
agency”, by taking approval from the competent authorities,
searches were conducted in the premises of respondent nos.2
and 3. It is alleged that during such searches several
incriminating documents, including the quotations submitted
by the respondent-companies to their customers were seized
and statements of the Directors were recorded as per the
provisions of Central Excise Act, 1944 read with the
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WP(MD)No.1039 of 2022
provisions under Finance Act, 1994. Subsequently, the show
cause notices dated 08.10.2015 and 30.09.2015, were issued
to respondent nos.2 and 3, which are impugned in the writ
petition filed before the High Court.'
7. The legal position regarding grounds qua challenge to an SCN have
been elucidatively set out in paragraph 19 of Coastal Container case and the
same reads as follows:
'19. On the other hand, we find force in the contention
of the learned senior counsel, Sri Radhakrishnan, appearing
for the appellants that the High Court has committed error in
entertaining the writ petition under Article 226 of
Constitution of India at the stage of show cause notices.
Though there is no bar as such for entertaining the writ
petitions at the stage of show cause notice, but it is settled by
number of decisions of this Court, where writ petitions can
be entertained at the show cause notice stage. Neither it is a
case of lack of jurisdiction nor any violation of principles of
natural justice is alleged so as to entertain the writ petition
at the stage of notice. High Court ought not to have
entertained the writ petition, more so, when against the final
orders appeal lies to this Court. The judgment of this Court
in the case of Union of India & Anr. V.Guwahati Carbon
Ltd. (supra) relied on by the learned senior counsel for the
appellants also supports their case. In the aforesaid
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WP(MD)No.1039 of 2022
judgment, arising out of Central Excise Act, 1944, this Court
has held that excise law is a complete code in order to seek
redress in excise matters and held that entertaining writ
petition is not proper where alternative remedy under statute
is available. When there is a serious dispute with regard to
classification of service, the respondents ought to have
responded to the show cause notices by placing material in
support of their stand but at the same time, there is no reason
to approach the High Court questioning the very show cause
notices. Further, as held by the High Court, it cannot be said
that even from the contents of show cause notices there are
no factual disputes. Further, the judgment of this Court in
the case of Malladi Drugs & Pharma Ltd. V. Union of
India, relied on by the learned senior counsel for the
appellants also supports their case where this Court has
upheld the judgment of the High Court which refused to
interfere at show cause notice stage.
8. This Court having set out the excerpted portions of Costal
Container case law qua grounds for challenge to SCN examined the grounds
raised in the case on hand. A careful perusal of the writ affidavit and the
arguments advanced at the bar making it clear that they turn only on facts
and there is nothing to demonstrate that there is violation of NJP or that the
said impugned SCN has been issued without jurisdiction. There is nothing
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WP(MD)No.1039 of 2022
to demonstrate that said impugned SCN has been issued in disregard of
settled provisions of law; that the respondent has powers to issue SCN
under Section 124 of Customs Act calling upon the noticees to show cause
as to why there should be no confiscation is beyond any pale of doubt.
Absent grounds for challenge to an SCN, the captioned main writ petition
cannot but fail.
9. However, it is open to writ petitioner to respond to impugned SCN
and it is open to the respondent to proceed with the impugned SCN, the writ
petitioner shall co-operate with the proceedings and the same can be carried
to its logical end on its own merits and in accordance with law as
expeditiously as the business of the respondent would permit.
10. Captioned writ petition fails and the same is dismissed albeit with
the aforementioned observations. Consequently captioned WMP is also
dismissed. There shall be no order as to costs.
28.01.2022
Index : Yes/No
Internet : Yes /No
vsm
https://www.mhc.tn.gov.in/judis
WP(MD)No.1039 of 2022
M.SUNDAR, J.
vsm
Note :
In view of the present lock down owing to
COVID-19 pandemic, a web copy of the order may be
utilized for official purposes, but, ensuring that the copy of
the order that is presented is the correct copy, shall be the
responsibility of the advocate / litigant concerned.
To
The Assistant Commissioner,
Office of the Assistant Commissioner of Customs,
No.66, Beach Road,
Tuticorin – 628 001.
W.P(MD)No.1039 of 2022
and W.M.P.(MD)No.876 of 2022
28.01.2022
https://www.mhc.tn.gov.in/judis
