2012 (12) TMI 163 - HC - Customs

Court upholds order setting aside demand for Rs.4,91,000 over customs act violations

The court upheld the order setting aside the demand for Rs.4,91,000 in relation to bills of entry, remanding the matter for further enquiry. It found that ... Principles of natural justice - absence of personal hearing and ex-parte decision - service of order under Section 153 of the Customs Act - departmental obligation to send notice to address on record - failure to intimate change of address - dismissal for lack of bona fides and non-diligent prosecutionService of order under Section 153 of the Customs Act - departmental obligation to send notice to address on record - failure to intimate change of address - Validity of service of the impugned order and notices sent to the address shown in departmental records. - HELD THAT: - The Court examined the original file and record of earlier proceedings and found that the departmental records, appeal memo and the remand order all showed the address as Seethakathi Chambers, 5th Floor, 688, Anna Salai, Chennai 600 006. There was no intimation from the petitioner informing the department of any change of address. Section 153 prescribes service by tender or registered post to the person or his agent and, if that cannot be effected, by affixing on the customs house notice board. The department despatched the remand order and the impugned order by speed post to the address as per record and produced proof of despatch. In these circumstances the Court held that the department was bound to send notices to the address on its file and could not be faulted for doing so; the petitioner's contention that the address was non-existent was undermined by the petitioner's receipt of the appellate order sent to the same address. [Paras 9, 10, 11, 12, 15]Service of notices and the impugned order to the address on departmental record was valid and in accordance with Section 153.Principles of natural justice - absence of personal hearing and ex-parte decision - Whether there was denial of opportunity of personal hearing in the de novo proceedings. - HELD THAT: - The impugned order records the dates on which personal hearings were granted and records the petitioner's failure to appear on those dates. The notices granting personal hearings form part of the record and were addressed to the same address on file. The Court held that notices were issued and sent to the address reflected in the records, and the petitioner's non-appearance, despite being given hearing dates, meant the consequences of an ex parte decision followed. Thus there was no established violation of the principles of natural justice. [Paras 3, 13]No breach of principles of natural justice; failure to appear in response to notices justified proceeding ex parte.Dismissal for lack of bona fides and non-diligent prosecution - Whether the petitioner was entitled to relief despite its conduct before the authority. - HELD THAT: - The Court noted that the petitioner had not notified any change of address, had received earlier appellate communication sent to the same address, and failed to appear despite multiple hearing dates. The petitioner produced no proof that it had informed the department of any address change. Considering these factors, the Court concluded that the petitioner was not prosecuting the matter diligently and that there was lack of bona fides warranting refusal of relief. [Paras 14, 16, 17]Petitioner not entitled to relief on account of lack of diligence and bona fides; writ petition dismissed.Final Conclusion: Writ petition dismissed for want of merit; connected miscellaneous petitions dismissed; no costs. Issues:1. Challenge to Order-in-Original No.18452/2012 for demand of Rs.4,91,000 in relation to bills of entry.2. Appeal to Commissioner of Customs (Appeals) setting aside the order and remanding for de novo enquiry.3. Confiscation of goods and imposition of penalty under Sections 111(d), 111(o), and 112(a) of the Customs Act, 1962.4. Allegation of denial of opportunity and violation of principles of natural justice due to improper service and lack of personal hearing.Analysis:1. The writ petition challenged Order-in-Original No.18452/2012 demanding Rs.4,91,000 for bills of entry due to failure to produce the B.15 Registration Certificate for goods cleared provisionally. The petitioner appealed to the Commissioner of Customs (Appeals) who set aside the order and remanded the matter for de novo enquiry by the Assistant Commissioner of Customs. The petitioner failed to appear for personal hearings, leading to the authority proceeding ex-parte and passing orders for confiscation of goods and imposition of penalties under Sections 111(d), 111(o), and 112(a) of the Customs Act, 1962.2. The petitioner alleged a denial of opportunity and violation of natural justice, claiming no notice of personal hearing was served, causing prejudice. The petitioner argued that the order was dispatched to a non-existent address, leading to improper service. However, the respondents contended that the address used for communication was consistent with previous proceedings and appeals, and the notices were sent to the correct address as per records. The court held that service on the address as per the record was valid under Section 153 of the Customs Act, rejecting the petitioner's claim of improper service.3. The court further dismissed the allegation of violation of natural justice regarding the lack of personal hearing, as the record showed notices of personal hearing sent to the correct address, and the petitioner's failure to appear was noted. The court emphasized that the department must send notices to the address as per the record, and failure to appear in response to notices was the petitioner's own peril. Additionally, the court highlighted the petitioner's lack of diligence in prosecuting the matter and lack of bona fides, leading to the dismissal of the writ petition and connected miscellaneous petitions without costs.