2010 (3) TMI 421 - HC - Customs

Court affirms dismissal of writ petitions challenging show cause notice on DEPB licenses.

CRYSTAL TRADERS Versus COMMISSIONER OF CUSTOMS, TUTICORIN

The Court upheld the dismissal of writ petitions challenging a show cause notice alleging fraud in DEPB licenses. The appellants were directed to provide ... Alternative remedy- the show cause notice, it was alleged that there were serious fraud played in respect of DEPB licences issued by the DGFT, based on which the appellants had the benefit of concessional duty. Held that- submission relying on number of decisions of High Court, the SCN not maintainable. proceedings emanating therein after adjudication and order of Tribunal. Single judge holding that court cannot be expected to determine serious disputable question of fact merely on averments contained in affidavits and dismissed the petitions directing department to proceed in law and appellant to furnish explanation to SCN. No flaw in conclusion of single judge. Writ appeal not entertainable. Issues: Challenge to show cause notice regarding alleged fraud in DEPB licenses, dismissal of writ petitions by learned Judge, reliance on Division Bench decisions and Supreme Court decision, inability to challenge show cause notice directly in High Court.In the present case, the primary issue involved the challenge to a show cause notice issued by the respondents alleging serious fraud in the issuance of DEPB licenses by the DGFT, resulting in the appellants benefiting from concessional duty. The show cause notice called for an explanation as to why the licenses should not be canceled, and the imported goods cleared using fake and forged licenses should not be liable for confiscation under relevant sections of the Customs Act, along with demands for foregone duty, interest, and penalty.The writ petitions challenging the show cause notice were disposed of by the learned Judge, who relied on a previous decision of the Court to emphasize that disputed questions of fact cannot be resolved based solely on affidavits and counter-affidavits. The Judge dismissed the writ petitions and directed the appellants to provide their explanation within four weeks, allowing the respondents to proceed in accordance with the law and pass appropriate orders. The appellants were also granted the liberty to raise the plea of limitation, leaving it to the respondents to address all points in compliance with the law.The appellants sought to rely on various Division Bench decisions and a Supreme Court decision to argue that the show cause notice was not maintainable and could be set aside in the writ proceedings. However, the Court did not accept this argument, noting that in the cited decisions, proceedings had followed orders from adjudicating authorities and appellate tribunals before reaching the Division Bench and the Supreme Court. The Court emphasized that serious disputable questions of fact could not be determined based solely on affidavits and counter-affidavits, as presented in the case before them.Ultimately, the Court found no flaw in the learned Judge's conclusion to dismiss the writ petitions and direct the appellants to submit their explanation within four weeks. Consequently, the writ appeals were dismissed, with the appellants instructed to comply with the directions of the learned single Judge within the specified timeline. The Court highlighted that the directions of the learned single Judge would continue to be in effect, and the connected Miscellaneous Petitions were closed as a result of the judgment.