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2020 DIGILAW 395 (GUJ)

Lilaram Arjandas Asudani v. Union of India

2020-03-03

GITA GOPI, SONIA GOKANI

body2020
JUDGMENT : SONIA GOKANI, J. 1. The petitioner is before this court seeking the following reliefs: “(A) That Your Lordships may be pleased to issue a writ of prohibition or any other appropriate writ, direction or order, completely and permanently prohibiting the Principal Commissioner/Commissioner of Customs, Ahmedabad (the 2nd Respondent herein) from conducting adjudication of show cause notice F.No. VIII/10-47/Commr/04 dated 05.05.2006 (Annexure-B). (B) That Your Lordships may be pleased to issue a writ of mandamus or any other appropriate writ, order or direction thereby quashing and setting aside the decision of the Principal Commissioner of Customs conveyed to the petitioner vide letter F.No.VIII/10-47/Commr/2004 dated 15.11.2018 (Annexure-N) and also quashing and setting aside show cause notice dated 05.05.2006. (C) Pending hearing and final disposal of the present petition, Your Lordships may be pleased to restrain the 2nd Respondent herein from conducting adjudication of show cause notice F.No.VIII/10-47/Commr/04 dated 05.05.2006 (Annexure-B) thereby staying adjudication of the show cause notice; (D) An ex-parte ad-interim relief in terms of para 23(C) above may kindly be granted. (E) Any other further relief that may be deemed fit in the facts and circumstances of the case may also please be granted.” 2. The facts in brief giving rise to the filing of the present petition are as follows: 2.1 Some where in the year 2002, the petitioner imported several consignments of different parts of mobile phones like battery, mother board, front cover, antenna, etc. The said products were imported through the Foreign Post Office (FPO) and were assessed to custom duties. The petitioner paid such duty on the imported goods. 2.2 It is averred by the petitioner that the Rules Regarding Postal Parcels and Letter Packets From Foreign Ports In Out Of India, which have been amended from time to time, govern the landing and clearing of parcels and packets forwarded by foreign mails or by passenger vessels or air liners at ports mentioned therein and at all the Land Customs Stations and Airports. A few other traders, some of them who are the relatives of the petitioner, had also imported such goods, which were assessable to custom duties. The said goods were cleared for consumption on payment of assessed custom duties. A few other traders, some of them who are the relatives of the petitioner, had also imported such goods, which were assessable to custom duties. The said goods were cleared for consumption on payment of assessed custom duties. 2.3 Between May 2002 to December 2002, in all, 122 separate consignments were imported by seven such persons, including the petitioner and they all were assessed to duties and allowed to be cleared for home consumption. According to the petitioner, the assessment and import of all the 122 consignments of parts of mobile phones stood concluded and finalized. 2.4 In November 2003, when 11 parcels of different parts of mobile phones were lying at Ahmedabad FPO, the same were seized by the Customs Department on a suspicion that the value declared for such goods for assessing customs duties thereon was on the lower side. Necessary inquiry was initiated in respect of the said imported goods. During such enquiry, the statement of the petitioner came to be recorded on 19.11.2003 and 20.11.2003. The statements of various other importers were also recorded during the enquiry and ultimately, a show cause notice dated 05.05.2006 came to be issued by the Commissioner, Customs alleging that the import of parts of mobile phones made in the past were, actually, imports of mobile phones in Semi Knocked Down/Completely Knocked Down units and that the assessable value of such imported goods had to be considered on the basis of the value of a complete mobile phone; and on that basis, differential customs duty was proposed to be demanded by the petitioner and other importers for 122 consignments imported between May 2002 to December 2002. Various other proposals like confiscation of goods, imposition of penalty, etc. were also leveled in the said show cause notice. 2.5 The petitioner gave his reply to the said show cause notice and requested the adjudicating authority to supply copies of relevant documents, viz. (i) import declarations (ii) import invoices (iii) assessment sheets/memos and (iv) parcel bills bearing endorsement of the Custom officers and also the bills of entry, which were relied upon for proposing to enhance the value of the goods imported by the petitioner and others. Such request was not acceded to and the petitioner was advised to furnish final reply to the show cause notice vide letter dated 05.10.2006. Such request was not acceded to and the petitioner was advised to furnish final reply to the show cause notice vide letter dated 05.10.2006. The petitioner filed his written submissions on 26.10.2006 and raised a contention about breach of the principles of natural justice. 2.6 The Commissioner of Customs, Ahmedabad, thereafter, passed an order dated 20.12.2006 raising a demand for the differential customs duty for the goods contained in 258 parcels, severally and jointly from the petitioner and others, along with interest and penalty. 2.7 Being aggrieved, the petitioner and others approached the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad (hereinafter referred to as “the CESTAT”). Vide judgment and order dated 20.01.2017, the CESTAT held that there was breach of the principles of natural justice as the petitioner was not provided with the relevant documents so that he could get an opportunity to defend himself and accordingly, remanded the matter to the Commissioner (Customs), Ahmedabad for adjudication afresh within a period of four months from the date of receipt of the order, after giving due opportunity of hearing and submission of evidence to the petitioner. It is the case of the petitioner that pursuant to the order of remand passed by the CESTAT, on 20.01.2017 the petitioner was given a personal hearing by the respondent No.2 on 20.01.2007. However, no documents as directed by the CESTAT were supplied to the petitioner. 3. The petitioner had made a request to the respondent No.2 to supply copies of relevant documents in relation to the 122 consignments. Thereupon, the Assistant Commissioner of Customs from the Office of the respondent No.2 wrote a letter dated 19.12.2017 to the Assistant Commissioner of Customs (Preventive) asking to provide copies of (i) import declarations (ii) import invoices (iii) assessment sheets/memos and (iv) parcel bills to the petitioners' advocate. Couple of communications were addressed by the petitioner to the Customs Department (Preventive Section) after receipt of the communication dated 19.12.2017. However, it is lamented that no response was given by the concerned officers. A personal hearing was also fixed, but no effective hearing was conducted. Eventually, the petitioner's advocate also visited the Office of the Assistant Commissioner of Customs (O&A) for inspection of the files and collected copies of the documents vide letter dated 26.07.2018. However, it is lamented that no response was given by the concerned officers. A personal hearing was also fixed, but no effective hearing was conducted. Eventually, the petitioner's advocate also visited the Office of the Assistant Commissioner of Customs (O&A) for inspection of the files and collected copies of the documents vide letter dated 26.07.2018. The visit on 08.08.2018, according to the petitioner, did not yield much result, as the files did not contain any of the relevant documents and copies of only eight declaration forms filed by the petitioner for a few of the imported consignments were handed over to the learned advocate. Those eight declaration forms also did not bear any stamp or signature of the Customs Department. According to the petitioner, the said documents were virtually blank forms not at all relevant for the purpose of assessment of duties on the imported goods. Therefore, a communication dated 09.08.2018 was addressed by the learned advocate for the petitioner to the Office of respondent No.2, wherein the attention of the Department was drawn to the directions issued by the CESTAT for its compliance; however, to no avail. A further correspondence followed on 19.09.2018. A personal hearing was fixed on 25.10.2018, which was re-scheduled for 30.10.2018. The petitioner approached respondent No.2 on 30.10.2018 through its advocate. On 15.11.2018 the Superintendent of Customs from the Office of the respondent No.2 indicated that the petitioner should file final submissions without any delay as all the available documents had been supplied by their Office and the case would be taken up for final adjudication. 3.1 The stand taken by the adjudicating authorities aggrieved the petitioner as, according to the petitioner, the authority has not followed the directions issued by the CESTAT. Therefore, any adjudication which continues without complying with the directions issued by the CESTAT would amount to acting without jurisdiction and authority. He, therefore, approached this court with the aforementioned prayers in the present petition. 4. This court while issuing notice on 29.11.2018 had granted adinterim relief by granting liberty to the petitioner to seek adjournment in view of the fact that this court was in seisin of the matter and directed the authority to grant adjournment and post the matter only after the hearing of this petition. This direction has continued till date. 5. 4. This court while issuing notice on 29.11.2018 had granted adinterim relief by granting liberty to the petitioner to seek adjournment in view of the fact that this court was in seisin of the matter and directed the authority to grant adjournment and post the matter only after the hearing of this petition. This direction has continued till date. 5. In response to the notice, the respondent No.2 appeared and filed its affidavit-in-reply denying all the averments and allegations. It has questioned the maintainability of this petition on the ground that all the averments could be raised before the authorities concerned. It is the stand of the respondents that the documents, as sought for by the petitioner, were his own documents and hence, their copies could not have been asked for. It is also the case of the respondent that the petitioner could not have approached this court on the ground of breach of the principles of natural justice inasmuch as the adjudication would be on the strength of the available documents on the record. Moreover, the adjudication process is not yet over and any culmination of such process shall be subject to appeal under section 129 of the Act. Hence, the petitioner could not have approached this court under writ jurisdiction. 5.1 It is also the say of the respondent that the case can be taken up on the strength of the documents available on record, which has been explained to the petitioner. It was submitted that the show cause notice cannot be kept pending for an indefinite period and that the same shall have to be brought to its logical conclusion. 6. This court has extensively heard learned advocate Mr. Paresh Dave, who has urged that under the Rules, it is the duty of the respondent authorities to preserve every document, on which assessment is made, for a period of three years. Under the Rules, a duty is cast upon the Customs Appraiser to get the bags opened and scrutinized under his supervision with a view to detain all packets suspected to contain dutiable articles. The Rules also provide that the parcel bills or letter mail bills and other documents on which the assessment is made, shall remain in the custody of the Post Office, but the duplicates shall be kept in the Customs Department for dealing with claims for refunds, etc. The Rules also provide that the parcel bills or letter mail bills and other documents on which the assessment is made, shall remain in the custody of the Post Office, but the duplicates shall be kept in the Customs Department for dealing with claims for refunds, etc. 6.1 It was submitted that the CESTAT has directed the respondents to furnish the relevant documents before the assessment takes place and also to complete the assessment within a specified time period. Now, when the respondents have failed to comply with the said directions, they are required to tender their explanation, as it amounts to grave violation of the order of the CESTAT. The law prescribes that in case of any difficulty to complete the assessment proceedings within the stipulated period, the appellate authority could be approached seeking modification of its earlier order; however, nothing of this sort has been done at the ends of the respondents. Instead, in clear violation of the principles of natural justice, the respondents directed the petitioner - assessee to complete final hearing of the adjudication, which is improper and illegal. 6.2 Learned advocate has taken us through the various documents to point out that the set of four documents, in relation to 122 consignments that were imported, have not been furnished by the respondents. The reason given by the respondents for non-supply of the said documents is that they have not preserved the same. If that be so, the respondents could not proceed with the assessment. He has urged that inquiry in this case has started before the completion of three years and therefore, it was the duty on the part of the respondents to serve those documents. 7. Per contra, Mr. Parth Bhatt, learned senior standing counsel appearing for the respondents, has urged that this court would have no jurisdiction to issue the writ of prohibition in the given set of facts. It was submitted that it is only when the authority concerned has no jurisdiction and it continues to exercise the powers that such writ could be exercised. Here is a case where the authority concerned is empowered to assess the net invoiced bills and therefore, it cannot be said that it is acting without jurisdiction. It was submitted that it is only when the authority concerned has no jurisdiction and it continues to exercise the powers that such writ could be exercised. Here is a case where the authority concerned is empowered to assess the net invoiced bills and therefore, it cannot be said that it is acting without jurisdiction. 7.1 It was submitted that all contentions which have been raised in respect of the breach of the principles of natural justice could be raised before the concerned authority and an appeal has also been provided under section 129 of the Customs Act (hereinafter referred to as “the Act”) against the order passed by such authority. The petitioner could raise every defence before the authority concerned instead of agitating the same before this court. 7.2 Learned standing counsel urged that differential duty is required to be assessed on the imported goods inasmuch as different parts had been imported and an attempt has been made to hoodwink the respondent-authority. The respondent authority has clarified that those documents, which were not provided to the petitioner, would not be taken into consideration at the time of assessment. It was, therefore, prayed that the present petition deserves to be dismissed. 8. Having heard the learned advocates for the respective parties and having carefully examined the documents on record, the court notices that the question that arises for consideration of this court is as to whether the respondent No.2 could be permitted to conclude the assessment, without complying with the directions issued by the CESTAT on 20.01.2017. It is an undisputed fact that the order-in-original dated 20.12.2006 passed by the Commissioner of Customs, Ahmedabad was in relation to the “declared value” of imported goods. The said authority confirmed the differential customs duty on the imported goods at Rs.34,45,624/- and also directed that the same be recovered severally and jointly from the petitioner and seven other Noticees. The authority also imposed penalty of similar amount of Rs.34,45,624/- on the petitioner and penalty of Rs.5,00,000/- on each of the seven Noticees. 9. The CESTAT took note of the fact that the duty liability imposed by the respondent-authority was jointly and severally on eight individuals. It was of the firm opinion that no liability could be imposed on a group of persons jointly and severally. 9. The CESTAT took note of the fact that the duty liability imposed by the respondent-authority was jointly and severally on eight individuals. It was of the firm opinion that no liability could be imposed on a group of persons jointly and severally. While so concluding, the CESTAT relied upon a decision of its another Bench at Delhi, wherein it was held that the adjudicating authority was not justified in imposing duty jointly and severally on the Noticees. The CESTAT took note of the fact that relevant documents were not furnished by the respondents to the petitioner and other Noticees for their defence and accordingly, held that principles of natural justice demanded that the Noticees have to be provided with the relevant documents/evidences so that they could get an opportunity to defend themselves. 10. Considering all these aspects, the CESTAT remanded the matter to the respondent-authority for adjudication afresh, with the direction that the process shall be completed within four months from the date of receipt of the order and after giving necessary opportunity of personal hearing and submission of evidence to the petitioner. This court finds that the first personal hearing took place after about 10 months, which was in November 2017. Prior to this hearing, a communication was addressed to the respondent No.2 on 04.11.2017, whereby the authority concerned was reminded of the order passed by the CESTAT and a request was made for supplying the relevant documents. 10.1 It appears that on 07.11.2017, when the hearing took place, nothing happened. Therefore, communication dated 19.12.2017 was addressed to the Assistant Commissioner of Customs (Preventive) and Assistant Commissioner of Customs (F.P.O.) by the Office of the respondent No.2, wherein a mention was made of the fact that a fresh preliminary hearing was held on 07.11.2017 and the learned advocate appearing for the assessee, i.e. the petitioner, had sought documents. 10.2 The petitioner filed his Written Submissions, wherein also, a request was made to supply copies of the declarations, invoices, assessment sheets and parcel bills. However, it appears that the said request was not acceded to. 10.2 The petitioner filed his Written Submissions, wherein also, a request was made to supply copies of the declarations, invoices, assessment sheets and parcel bills. However, it appears that the said request was not acceded to. 10.3 Another communication dated 09.08.2018 was addressed to the Principal Commissioner of Customs, Ahmedabad reiterating the request, wherein it was stated pursuant to the earlier letter dated 04.11.2017 made on behalf of the learned advocate for the petitioner and others, a letter was addressed by the Assistant Commissioner (O&A) requesting the petitioner to inspect the files and collect photocopies of the required documents. Accordingly, the advocate visited the Preventive Section in the Customs House on 08.08.2018; but, only eight documents, which were “Declaration Forms”, were shown to the advocate from the file of the case and the copies thereof, were supplied to the advocate. 10.4 It was urged that all the copies of 122 consignments, as were requested by the petitioner and were directed to be handed over to the petitioner by the CESTAT in its order dated 20.01.2017, have so far not been provided to the petitioner. On 10.09.2018 a communication was addressed by the learned advocate for the petitioner to the Principal Commissioner of Customs, Ahmedabad reiterating the request to furnish all relevant documents and evidence to the petitioner, as directed by the CESTAT. Yet, another reminder was sent to the Principal Commissioner of Customs, Ahmedabad in the form of communication dated 30.10.2018. On 15.11.2018 the Superintendent from the Office of the respondent No.2 addressed a communication to the learned advocate for the petitioner stating that as far as the invoices and other like documents are concerned, the same being petitioners' own documents, could be had from him and that all available documents, including certain declarations, have been supplied by the Office to the petitioner. 11. Evidently, in the affidavit-in-reply filed on behalf of respondent No.2, it has been admitted that all documents, as were directed by the CESTAT in its order dated 20.01.2017, have not been supplied to the petitioner. However, the respondent No.2 has taken the stand that the petitioner would not only be having the documents as sought for by him, but the authority would not take into consideration any of those document/s at the time of making assessment. 12. However, the respondent No.2 has taken the stand that the petitioner would not only be having the documents as sought for by him, but the authority would not take into consideration any of those document/s at the time of making assessment. 12. In the opinion of this court, the stand taken by the respondents is in clear violation of the directions issued by the CESTAT. The CESTAT, after due regard to the material placed before, held that the adjudicating authority was not justified in imposing duty liability on the Noticee-appellants jointly and severally. It also held the action of the respondent authority of not providing the Noticee-appellants the relevant documents/evidences so as to enable them to defend themselves to be violative of the principles of natural justice and accordingly, directed the respondent authority to furnish all the relevant documents and to complete assessment within the period stipulated in the order. 13. The court notices that the order dated 20.01.2017 passed by the CESTAT has not been complied with by the respondents. Instead of approaching the CESTAT seeking modification of its order dated 20.01.2017, the respondent No.2 has proceeded with the assessment proceedings in utter disregard of the directions issued by the CESTAT. In our opinion, if the respondent No.2 was of the view that it would not be possible for it to comply with the directions issued by the CESTAT in the order dated 20.01.2017, then it ought to have taken recourse to any other remedy available under the law. The respondent authority could not assume the role of a Judge in its own cause. 14. At this stage, a reference to section 129B of the Customs Act, 1962 would be apposite. Sub-section (1) thereof authorises the Appellate Tribunal to pass such orders as it thinks fit for affirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority, which passed such decision or other with such directions as the Appellate Tribunal may think fit for the a fresh adjudication, after giving the parties to the appeal an opportunity of being heard. Sub-section (2) thereof provides that the Appellate Tribunal may, at any time within six months from the date of the order, with a view to rectify any mistake apparent from the record, amend any order passed by it under Sub-section (1) and shall make such amendment/s, if the mistake is brought to its notice by the Commissioner of Customs or other party to appeal; subject to the condition that an amendment which has the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the other party shall not be made under this Sub-section unless the Appellate Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard. As is evident from this provision, the Commissioner of Customs or the other party to appeal can bring to the notice of the Appellate Tribunal within a period of six months from the date of the order, any mistake with a view to rectify such mistake apparent from the order and in such case, the Appellate Tribunal is empowered to amend any order passed by it under Sub-section (1) and shall make such amendments. The section empowers the respondent authority to bring it to the notice of the Appellate Tribunal that in the given set of circumstances, it would be difficult for the authority to comply with the directions issued by the Appellate Tribunal and accordingly, seek amendment of its order. It is necessary that once any direction is issued by any Appellate Authority, the same is scrupulously followed by the authority against whom the directions are issued. 14.1 In the instant case, even without examining the reasons as to why the respondent authority was unable to comply with the directions issued by the CESTAT in its order dated 20.01.2017 in toto, the fact remains that the respondent authority has not supplied the documents, which it was asked to do so by the CESTAT, to the petitioner. Hence, the best course of action that was available to the respondent authority was to request the CESTAT to amend its earlier order by filing appropriate application within the stipulated period instead of insisting upon the petitioner to go ahead with the assessment. Hence, the best course of action that was available to the respondent authority was to request the CESTAT to amend its earlier order by filing appropriate application within the stipulated period instead of insisting upon the petitioner to go ahead with the assessment. This can never be the spirit of assessment and the assessee concerned cannot be sent from pillar to post, particularly, on the very issue on which the challenge has been made. 15. This court is conscious of the fact that the differential duty imposed upon the present petitioner and six other Noticees is huge. The matter is quite old and involves a long drawn legal battle, which has continued till date. The final adjudication could not be made in the wake of this challenge and the directions issued by the CESTAT. However, that also cannot be a ground for the court to permit breach of the principles of natural justice. 16. It is not only about the grant of an opportunity of being heard to the party concerned, but of complying with the principles of natural justice, which includes the furnishing of relevant documents also, which is vital for the purpose of adjudication. Considering the facts of the case, this court is of the opinion that the communication dated 15.11.2018 addressed to the advocate for the petitioner by the Office of the respondent No.2 stating that in case of non-furnishing of final submissions by the petitioner before 30.11.2018, the case shall be proceeded for final adjudication, deserves indulgence. 17. This court is conscious of the fact that the exercise of powers for the issuance of a Writ of Prohibition is to be used very sparingly. This is not a case where the respondent No.2 authority is not having the powers to make an assessment under the Act. However, the issue is with regard to non-supply of documents, despite the directions issued by the CESTAT. In this background, the action of the respondent No.2 authority seeking to proceed with the assessment of the petitioner, without complying with the directions issued by the CESTAT in its order dated 20.01.2017, would entail to the exercise of the powers by this court since the authority, which, otherwise has the powers, has not taken any steps in compliance of the directions issued by the CESTAT. Hence, the communication dated 15.11.2018 issued by the Office of the respondent No.2 deserves to be quashed and set aside and appropriate directions are required to be issued to the respondent No.2. 18. In the result, the petition is partly allowed. The impugned communication dated 15.11.2018 addressed to the learned advocate for the petitioner by the Office of the respondent No.2 herein is quashed and set aside. The respondent No.2 authority is directed to furnish the documents, as mandated by the CESTAT in its order dated 20.01.2017, viz. (i) Import Declarations (ii) Import Invoices (iii) Assessment sheets/memos and (iv) Parcel bills, to the petitioner within a period of Four Weeks from the date of receipt of writ of this order. In the event of its inability to furnish the said documents to the petitioner, the respondent No.2 authority shall approach the CESTAT seeking necessary modification of its order dated 20.01.2017. Till the final outcome of the application that may be made by the respondent No.2 before the CESTAT seeking modification of its earlier order dated 20.01.2017, the respondent No.2 authority is restrained from proceeding further with the adjudication of the show-cause notice dated 05.05.2006. It shall be open to the petitioner to raise all contentions in the application seeking modification; except the plea regarding delay as the proceedings were pending before this court. It is made clear that this court has not entered into the merits of the case and that the CESTAT shall decide any such application that may be filed by the respondent No.2 being uninfluenced by the observations made in this order and shall decide the same independently.