Court Upholds Decision on Import-Export Code Suspension

The court found the review order to be highly improper and interfering with the administration of justice. It upheld the adjudicating authority's decision to waive the show cause notice and proceed with a personal hearing. The suspension of the import export code was deemed prospective and not impacting prior imports. The court approved the redemption fine and penalty imposed by considering various aspects. It found no fault in relying on an accredited laboratory report. The court directed the release of goods as the order-in-original was in force. The writ petitions were allowed, and respondents were instructed to release the goods without imposing costs.

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Issues Involved:
1. Legality and propriety of the order-in-original.
2. Non-issuance of show cause notice.
3. Suspension of import export code.
4. Grounds for redemption fine and penalty.
5. Reliance on accredited laboratory report.
6. Non-release of goods despite compliance with the order-in-original.

Issue-Wise Detailed Analysis:

1. Legality and Propriety of the Order-in-Original:
The court examined whether the order-in-original, which allowed the petitioner to redeem confiscated goods upon payment of a fine, was legal and proper. The Commissioner of Customs (Import-II) had passed a review order under section 129 D(2) of the Customs Act, pointing out deficiencies in the order-in-original and directing the Additional Commissioner of Customs to apply to the Commissioner (Appeals) to set aside the order. The court found that the review order was passed in a highly improper manner, without informing or taking leave of the court, which was already seized of the matter. The court emphasized that such actions amount to interfering with the administration of justice.

2. Non-Issuance of Show Cause Notice:
The adjudicating authority did not issue a show cause notice to the petitioner, as requested by the petitioner, who instead sought a personal hearing. The court noted that under section 124 of the Customs Act, the issuance of a show cause notice and representation in writing may be waived at the request of the person concerned. The adjudicating authority's decision to waive the show cause notice and proceed with a personal hearing was found to be within the bounds of the law.

3. Suspension of Import Export Code:
The Commissioner’s review order criticized the adjudicating authority for not addressing the suspension of the petitioner’s import export code. The court observed that the suspension order was prospective and did not impact the imports made prior to its issuance, which were the subject matter of the adjudication. Additionally, the Supreme Court had noted that statutory appeals against such suspensions would be decided in accordance with law, thus the adjudicating authority could not have examined this aspect.

4. Grounds for Redemption Fine and Penalty:
The Commissioner’s review order questioned why the adjudicating authority did not consider absolute confiscation or re-export and did not conduct an enquiry for ascertaining market price and margin of profit. The court found that the adjudicating authority had considered the perishable nature of the goods and the long pendency of the consignment, and had determined the quantum of redemption fine and penalty after considering various aspects, including the margin of profit suggested by the assessing officer.

5. Reliance on Accredited Laboratory Report:
The Commissioner’s review order criticized the adjudicating authority for relying on a certificate from an accredited laboratory rather than referring the matter to a designated government agency. The court found no fault in the adjudicating authority’s reliance on the accredited laboratory’s report, noting that accredited means giving official authorization or recognition.

6. Non-Release of Goods Despite Compliance with the Order-in-Original:
Despite the petitioner complying with all terms and conditions of the order-in-original and making the necessary payments, the goods were not released on the basis of letters dated 02.09.2020. The court found that withholding the goods was not justifiable, especially since the order-in-original was holding the field and had neither been set aside nor stayed. The court directed the respondents to release the goods forthwith.

Conclusion:
The court allowed the writ petitions, directing the respondents to release the petitioner’s goods covered by the specified bills of entry. The court refrained from imposing costs but rejected the respondents' oral prayer to keep the judgment in abeyance to enable them to move the Supreme Court. The order was to be digitally signed and acted upon by all concerned.

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