2012 (6) TMI 821 - HC - Customs

Court finds procedural flaws in duty orders, grants stay, directs affidavit-based proceedings

M/s Jai Balaji Industries Ltd & Anr Versus Deputy Commissioner Of Customs (Group-IV) & Ors

The court found that the orders claiming duty lacked a show-cause notice and prevented the petitioners from pursuing an appeal due to filing delays. ... - Issues involved: Challenge against four orders in original passed by Deputy Commissioner of Customs and a communication demanding payment under threat of recovery action under Customs Act, 1962.Details of the Judgment:1. Lack of Show Cause Notice:The orders claiming duty were based on the petitioners' failure to produce the required end-use certificate within the specified time. The petitioner's counsel argued that the impugned orders were issued without any show-cause notice. It was highlighted that the end-use certificate was eventually issued by the Superintendent (Tech), Central Excise, certifying the proper utilization of the imported goods by the petitioners for manufacturing purposes. Despite a belated appeal with a request for condonation of delay, the appeal was dismissed as time-barred, emphasizing the lack of authority to condone the delay.2. Alternative Remedy of Appeal:The petitioners were unable to pursue their alternative remedy of appeal due to the delay in filing. While the existence of an alternative remedy does not always preclude a writ petition, it was noted that the impugned orders seemed to violate principles of natural justice. The imposition of differential duty, which carries adverse civil consequences, should ideally be preceded by notice and a fair hearing, which appeared to be lacking in this case.3. Stay Order and Further Proceedings:Considering the presence of the end-use certificate, the court stayed the demand for payment mentioned in the communication dated April 24, 2012, in the interest of justice. The interim order was set to be effective until August 21, 2012, or until further orders were issued, whichever came first. The enforcement of demands from the challenged orders was suspended until August 21, 2012. The court directed the matter to proceed based on affidavits, with the affidavit-in-opposition to be filed within three weeks and the affidavit-in-reply, if any, within one week thereafter. The writ application was scheduled for a hearing on July 17, 2012. All parties were instructed to act based on a signed copy of the order.This summary captures the key issues and details of the judgment, outlining the arguments presented and the court's decisions regarding the challenges against the customs orders and the demand for payment.