2013 (7) TMI 798 - HC - Customs

Court Dismisses Petition Challenging Customs Notice on Coal Classification

Binani Cement Limited Versus Union of India and others

The court dismissed the petition challenging a notice from the Commissioner of Customs regarding the classification of imported coal as steam coal instead ... Challenge to the Show Cause Notice - Classification of the imported coal as steam coal or as bituminous coal - Held that:- The assessee ought not to have filed a writ petition before the High Court questioning, the correctness or otherwise of the orders passed by the Tribunal - The Excise Law is a complete code in order to seek redress in excise matters and hence may not be appropriate for the writ court to entertain a petition under Article 226 of the Constitution. The challenge of the petitioner being at the stage where mere show-cause notice has been issued by the department - at this stage no interference was called for - the court would not encourage litigation at the stage of show cause notice - the noticee had sufficient opportunity to meet with all the allegations and produce such material on record as may be required –court relied upon Special Director and anr. vs. Mohd. Ghulam Ghouse and anr. (2004 (1) TMI 378 - SUPREME COURT OF INDIA ). The statute provides for detailed mechanism for adjudication of disputes between the department and the importer – court would not like to short-circuit such proceedings and plunge straightaway into examining such questions in a writ jurisdiction at the first instance – Union of India vs. Guwahati Carbon Ltd. (2012 (11) TMI 885 - SUPREME COURT OF INDIA) - the assessee had a remedy in the form of a right of appeal under the statute - that remedy must be exhausted first – petition decided against assessee. Issues:1. Challenge to notice dated 26.03.2013 regarding classification of imported coal.2. Challenge to exemption notification dated 01.03.2013.Analysis:Issue 1: Challenge to Notice Regarding Classification of Imported CoalThe petitioner contested a notice from the Commissioner of Customs challenging the classification of imported coal as steam coal instead of bituminous coal. The notice raised several points, including rejecting the classification under a specific Customs Tariff item, finalizing bills of entry with applicable interest, confiscation of the imported coal, demanding differential customs duty, recovering interest on the differential duty, and imposing a penalty. The petitioner argued that the notice was issued disregarding relevant facts, claiming they had imported steam coal for years, declared it as such, and benefited from a previous exemption notification. The court noted that challenging a show cause notice at this stage was premature, citing precedents discouraging interference at this initial phase. The court emphasized that the noticee would have the opportunity to respond and present evidence during the adjudication process.Issue 2: Challenge to Exemption NotificationThe petitioner also challenged an exemption notification dated 01.03.2013, which was deemed irrelevant to the show cause notice concerning coal imports filed before the notification's issuance. The court clarified that these challenges were separate and focused solely on the show cause notice in the current petition. The petitioner was advised to file a separate petition if necessary to challenge the exemption notification. The court highlighted the need for a detailed examination of facts and laws related to the classification of coal, emphasizing that such disputes should be addressed through the statutory appeal mechanism provided for in the relevant laws. Referring to previous judgments, the court reiterated the importance of exhausting statutory remedies before resorting to writ petitions. Ultimately, the court rejected the petition against the show cause notice due to the involvement of complex factual and legal issues, without any demonstrated lack of jurisdiction or violation of natural justice principles by the adjudicating authority.