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Court declines interference with show cause notices, orders removal from 'Alert' list. Petition disposed without opinion on late fine charges. The Court declined to interfere with the challenge to show cause notices, emphasizing the need for adjudication and urging cooperation. However, the Court ...
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Court declines interference with show cause notices, orders removal from "Alert" list. Petition disposed without opinion on late fine charges.
The Court declined to interfere with the challenge to show cause notices, emphasizing the need for adjudication and urging cooperation. However, the Court found the department's action of placing the petitioner on the "Alert" list impermissible, directing removal of their name. The petition was disposed of without expressing an opinion on liability for late fine charges, leaving the adjudicating authority to decide independently based on evidence.
Issues: Challenge to "Alert" insertion against petitioner and show cause notices issued by Customs Authorities.
Analysis: The petitioner, a registered partnership firm and Customs broker, sought direction to remove the "Alert" against them and challenged show cause notices for late fine charges with penalties. The department alleged deliberate breaches by the petitioner, claiming they used a deceptive method to avoid late payment charges. Several other brokers were also accused of similar actions, with an estimated total late payment charges of around Rs. 9 Crores, out of which the petitioner's share was Rs. 89 Lacs. While many brokers paid up without protest, the petitioner did not, leading to the "Alert" against them and 18 show cause notices issued in May 2018. The petitioner contested the demand and challenged the notices, arguing against coercive recovery before adjudication.
The petitioner's counsel contended that the department's action of placing them in the "Alert" list was unauthorized as the demand was yet to be adjudicated, and the petitioner was contesting it. They argued that the competent authority had discretion to reduce or waive late fines, which had been regularized in this case. Additionally, they claimed the show cause notices prejudged the issue. On the other hand, the department's counsel defended their actions, stating the petitioner used irregular procedures to avoid charges and had not replied to the show cause notices, opting to challenge them directly in the High Court.
The Court declined to interfere with the challenge to show cause notices, emphasizing the need for adjudication by the competent authority and urging the petitioner to cooperate. However, regarding the "Alert" issue, the Court found the department's action impermissible. The Court clarified that coercive recovery before confirming the demand was unjust, especially when the same amount was the subject of show cause notices. Consequently, the Court directed the respondents to remove the petitioner's name from the "Alert" list. The petition was disposed of without expressing an opinion on the liability for late fine charges or penalties, leaving the adjudicating authority to decide independently based on the evidence presented.
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