2021 (2) TMI 1039 - HC - Customs

Tax Appeal Allowed, Cost Recovery Charges Waiver Granted under Customs Act.

The Tax Case Appeal was allowed, setting aside the previous order rejecting the waiver of Cost Recovery Charges under the Customs Act, 1962. The court ... Principles of Natural Justice - opportunity of personal hearing sought, but not provided - Request for waiver of Cost Recovery Charges made by the appellant rejected - HELD THAT:- The appellant had specifically sought for an opportunity of personal hearing. It is not the case of the Department that there is no necessity for affording an opportunity of personal hearing. In fact in taxing statutes, when decisions are taken, an opportunity of personal hearing could go a long way to resolve very complicated issues, apart from giving satisfaction to the assessee that all materials, which are available with them, were placed for consideration before the adjudicating authority. One more fact which is to be noted is that the request made by the appellant was kept pending for several years and only after an order was passed in the earlier writ petition on 05.03.2008, the second respondent Department had passed an order dated 16.04.2008. If an opportunity of personal hearing had been granted to the appellant and the various circulars issued by the CBEC were placed for consideration, then a more informed decision could have been arrived at by the second respondent. Therefore, for such a reason alone, the order passed by the second respondent is interfered and the matter remanded back to the second respondent for taking a fresh decision, after affording an opportunity of personal hearing - Petition allowed by way of remand. Issues Involved:Challenge to order rejecting waiver of Cost Recovery Charges based on Customs Act, 1962 and circulars issued by CBEC, denial of opportunity of personal hearing, request for documents, and remand for fresh consideration.Analysis:The appellant challenged the order rejecting the waiver of Cost Recovery Charges, which was based on the Customs Act, 1962. The appellant held licenses under Sections 58(1) and 65 of the Customs Act, which required payment of Cost Recovery Charges. The appellant disputed the charges, citing reasons such as non-import/export activities and lack of exclusive supervision. The appellant also referred to a Rajasthan High Court decision for support. Despite the appellant's submissions and payment of a partial amount, the second respondent proceeded to enforce Bank Guarantees, leading to the writ petition.The court noted the power of the Department to grant waivers subject to specific conditions outlined in circulars issued by CBEC. The Department referred to circulars from 1997 to 2015, emphasizing performance benchmarks for the past two years. However, the court observed a lack of analysis in the second respondent's order regarding compliance with these benchmarks. The appellant had switched to the MOT Scheme in 2005, but the order did not address this aspect adequately.The appellant's request for a personal hearing was not granted, and documents requested were not provided. The court highlighted the importance of personal hearings in tax matters for a fair decision-making process. Notably, the delay in addressing the appellant's request and passing the order raised concerns. Therefore, the court deemed it necessary to remand the matter back to the second respondent for a fresh decision after granting a personal hearing and considering the circulars issued by CBEC.The court directed the second respondent to provide the appellant's representative with access to relevant documents, though not necessarily physical copies. The Tax Case Appeal was allowed, setting aside the previous order and remanding the matter for a fresh decision within four months, emphasizing the need for a reasoned order based on merits and legal provisions. No costs were awarded in the case.