TaxTMI 
TaxTMI 
2026 (8) TMI 1236
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....Gautam, Mr. Akhil and Ms. Sakshi Chandna, Advs. Mr. Anmol Sharma, GP. JUDGMENT PER ANIL KSHETARPAL, J.: 1. By way of the present batch of Writ Petitions, this Court is called upon to examine interconnected controversies arising out of the adjudication proceedings initiated pursuant to an investigation conducted by the Directorate of Revenue Intelligence ['DRI'] in relation to imports of information technology and networking equipment by M/s Zenlayer Networks India Private Limited ['Zenlayer']. Since the Petitions arise from the same investigation, involve overlapping factual and legal issues and were heard together, they are being disposed of by this common judgment. 2. W.P.(C.) No. 7091/2025 has been instituted by Zenlayer primarily assailing Notification No. 58/2024-Customs (N.T.) dated 04.09.2024 issued by the Central Board of Indirect Taxes and Customs ['CBIC'], whereby a Common Adjudicating Authority ['CAA'] came to be appointed in respect of only one of the three Show Cause Notices ['SCNs'] issued pursuant to the DRI investigation. The principal relief sought in the said Petition is for appointment of a single CAA for adjudication of all three SCNs dated 02.01.202....
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....tantial quantities of such networking equipment. 8. The DRI, Delhi Zonal Unit, initiated an investigation into the import of such networking equipment. During the course of the investigation, it was alleged that the imports had been undertaken through third-party Importer Exporter Code ['IEC'] holders, by resorting to undervaluation and misdeclaration of imported goods and without complying with the requirements of the Bureau of Indian Standards ['BIS']. The investigation culminated in issuance of the following three SCNs: S.No. Show Cause Notice Issuing Authority Nature of Proceedings 1. Show Cause Notice No. 24/2022-23 dated 02.01.2023 Additional Commissioner of Customs, Air Cargo Complex (Import), New Delhi Pertaining to four live consignments intercepted at the time of import, proposing confiscation of goods under Section 111 of the Customs Act together with recovery of differential customs duty and imposition of penalties under Sections 112 and 114 thereof. 2. Show Cause Notice No. 40/2023-24 dated 20.11.2023 Principal Commissioner of Customs, ACC (Import), New Del....
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..... 5 fixing the hearing in respect of SCN Nos. 24/2022-23 and 40/2023-24 on 22.09.2025. Zenlayer addressed a communication dated 16.09.2025, inter alia, referring to the order dated 19.08.2025 passed by this Court and requesting that the hearing be deferred. 14. Subsequently, Order-in-Original Nos. 48-49/2025-26/DR/Pr.Commr./ACC Import dated 14.11.2025 came to be passed by Respondent No. 5 in respect of SCN Nos. 24/2022-23 dated 02.01.2023 and 40/2023-24 dated 20.11.2023. The said Order-in-Original has been assailed by Zenlayer in W.P.(C.) No. 1407/2026. 15. Mr. Amit Singh was associated with Zenlayer as its General Manager/Country Head from January 2020 and became a Director of the company in February 2021. During the DRI investigation, his statements came to be recorded on 18.10.2022, 19.10.2022 and 20.10.2022. He was thereafter arrayed as a noticee in all three SCNs arising from the investigation. 16. Insofar as the adjudication proceedings are concerned, Mr. Amit Singh submitted a detailed reply dated 27.03.2023 to SCN No. 24/2022-23. He thereafter addressed communications dated 11.04.2024, 14.10.2024 and 21.03.2025 seeking appointment of a CAA for adjudication of all t....
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....s thereafter issued to Rahi Systems at the email address of a former employee of the company. According to Rahi Systems, the said notice came to its knowledge only on 14.10.2024. On 15.10.2024, Rahi Systems addressed an email to the adjudicating authority seeking an adjournment and, while doing so, also furnished three email addresses for future correspondence, stating that the email address to which the notice dated 04.10.2024 had been sent was no longer in use. 21. It is the case of Rahi Systems that, notwithstanding the aforesaid communication, it was not served with the corrigenda dated 25.02.2025 and 15.05.2025 or with notices of the subsequent personal hearings stated to have been conducted on 28.04.2025, 15.05.2025 and 22.09.2025. According to Rahi Systems, no notice of the subsequent proceedings was served upon it at the email addresses furnished by it on 15.10.2024 and it consequently remained unaware of the proceedings culminating in the Order-in-Original dated 14.11.2025. Rahi Systems states that it came to know of the adjudication only upon receipt of the said Order-in-Original by post at its registered address in Pune on 01.12.2025. 22. By the aforesaid Order-in-....
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....iate the possibility of divergent findings. It was submitted that the said decision was affirmed by the Supreme Court in Union of India v. Star Delta Exim (P) Ltd. 2022 (380) E.L.T. 398 (S.C.) wherein the direction for adjudication of the connected show cause notices by one authority was upheld. 24.4 It was further submitted that this Court, while considering the Petitioner's challenge to the appointment of the CAA, had recorded in its order dated 19.08.2025 a prima facie view that no useful purpose would be served by having different authorities adjudicate the SCNs arising from the same fact situation and that multiplicity of adjudication could result in contradictory findings and outcomes. It was contended that, in these circumstances, all three SCNs ought to be adjudicated by a single authority. 24.5 Insofar as W.P.(C.) No. 1407/2026 is concerned, it was submitted that, notwithstanding the pendency of W.P.(C.) No. 7091/2025 and the order dated 19.08.2025 passed therein, Respondent No. 5 proceeded with the adjudication of SCN Nos. 24/2022-23 and 40/2023-24. It was submitted that, upon receipt of the personal hearing notice dated 11.09.2025 fixing the hearing on 22.09.2025, ....
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....e ground that the Order-in-Original dated 14.11.2025 was passed without affording it a real and effective opportunity of hearing. It was submitted that the Petitioner was arrayed as Co-Noticee No. 13 in SCN No. 40/2023-24 dated 20.11.2023 and had duly entered appearance before the adjudicating authority by filing its Vakalatnama on 20.12.2023. Therefore, the Petitioner had not remained absent from the proceedings from the outset. 26.2 It was submitted that the personal hearing notice dated 04.10.2024, fixing the hearing for 15.10.2024, was sent to an email address belonging to a former employee of the Petitioner and came to the Petitioner's knowledge only on 14.10.2024. On 15.10.2024, the Petitioner's authorised representative addressed an email to the adjudicating authority seeking an adjournment and, importantly, furnished 03 alternative email addresses for all future correspondence. It was contended that, having thus specifically intimated the adjudicating authority of the correct email addresses, the Petitioner was entitled to receive all subsequent notices and communications at those addresses. 26.3 It was submitted that, notwithstanding the aforesaid communication, the ....
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....of the adjudication proceedings, the evidence on record and the findings returned by the adjudicating authority. According to the learned counsel, such matters fall within the statutory appellate mechanism and do not warrant exercise of the extraordinary jurisdiction of this Court under Article 226 of the Constitution. 27.2 It was further submitted that Zenlayer had itself approached this Court in W.P.(C.) No. 7091/2025 seeking appointment of a CAA and had thereafter participated in the adjudication proceedings. It was contended that the Petitioners cannot, merely because the adjudication has culminated in an order adverse to them, bypass the statutory appellate remedy and invoke the writ jurisdiction of this Court. It was submitted that no exceptional circumstance warranting interference under Article 226 had been demonstrated. 27.3 It was further submitted that the 03 SCNs, although emanating from the same DRI investigation, concern materially different factual situations, categories of goods and stages at which the alleged violations came to light. It was submitted that SCN No. 24/2022-23 dated 02.01.2023 concerns live consignments intercepted at the time of import and pro....
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....ntended that, the order dated 19.08.2025 having not interdicted the adjudication of SCN Nos. 24/2022-23 and 40/2023-24, the proceedings before Respondent No. 5 were validly continued. 27.7 Insofar as W.P.(C.) No. 1374/2026 is concerned, it was submitted that Mr. Amit Singh had been issued several notices for personal hearing, including notices dated 20.02.2024, 31.05.2024, 04.10.2024, 29.10.2024, 07.03.2025, 11.04.2025 and 05.05.2025. It was submitted that the Petitioner had responded to some of these notices and had himself sought deferment of the proceedings on the ground of the pending request for appointment of a CAA. According to the Respondents, having repeatedly sought deferment of the proceedings, the Petitioner could not subsequently contend that he had been denied an opportunity of hearing. 27.8 It was further submitted that the mere assertion that the personal hearing notice dated 11.09.2025 was not received by Mr. Amit Singh could not, in the absence of any demonstrated prejudice, invalidate the entire adjudication proceedings. The Respondents accordingly contended that the allegation of violation of principles of natural justice was without merit. 27.9 Insofar....
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....appellate remedy available under Section 128 of the Customs Act? ANALYSIS & FINDINGS 29. This Court has carefully considered the submissions advanced on behalf of the parties and perused the material on record. 30. The first question concerns the prayer made by Zenlayer in W.P.(C.) No. 7091/2025 for appointment of a CAA in respect of all three SCNs. It is not in dispute that the three SCNs emanate from the investigation conducted by the DRI in relation to the imports undertaken by Zenlayer and that there is substantial overlap in the material relied upon by the Department. The request for common adjudication is, therefore, not without basis. 31. The fact, however, remains that the three SCNs have distinct subject matters and arise at different stages of the alleged transactions. SCN No. 24/2022-23 dated 02.01.2023 concerns live consignments intercepted at the time of import and proposes, inter alia, confiscation of the goods and recovery of differential customs duty. SCN No. 40/2023-24 dated 20.11.2023 concerns seventy-four Bills of Entry relating to consignments which had already been cleared and proposes recovery of differential duty under Section 28(4) of the Customs....
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....ce requiring consideration. It did not, however, amount to an order of this Court restraining Respondent No. 5 from proceeding with the adjudication. 36. In view of the subsequent adjudication of two of the three SCNs, this Court is not persuaded that any useful or effective purpose would now be served by directing, in W.P.(C.) No. 7091/2025, that all three SCNs be placed before a CAA. Such a direction would necessarily require the adjudication already undertaken in respect of SCN Nos. 24/2022-23 and 40/2023-24 to be displaced, while the validity of that very adjudication is presently under consideration in the connected petitions. 37. The prayer in W.P.(C.) No. 7091/2025 for appointment of a CAA in respect of all three SCNs is, accordingly, not liable to be granted at this stage. This conclusion, however, is confined to the relief sought in the present proceedings and does not amount to an adjudication upon the merits of the allegations contained in the respective SCNs. 38. The remaining petitions assail the Orders-in-Original Nos. 48-49/2025-26/DR/Pr.Commr./ACC Import dated 14.11.2025. The principal question at this stage is whether the grounds urged by the respective Pe....
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....missioner of Customs against several Noticees, setting it aside qua Mr. Amit Singh on disputed questions of fact would not be appropriate in exercise of writ jurisdiction. 43. The position of Rahi Systems is similar. The Petitioner claims that, despite informing the adjudicating authority on 15.10.2024 of three alternative email addresses, the subsequent notices were not served upon those addresses and were instead sent to an email address which, according to the Petitioner, belonged to a former employee. The Respondents dispute the allegation. Whether the subsequent notices were duly served, the manner in which they were transmitted and the effect of such service upon the opportunity available to Rahi Systems are matters which can be examined by the statutory appellate authority on the basis of the complete adjudication record. 44. Rahi Systems is also one of the co-noticees against whom the consolidated adjudication has proceeded and upon whom penalties have been imposed. The mere assertion of violation of the principles of natural justice, where the existence and effect of the alleged procedural violation depend upon disputed questions of fact, does not by itself warrant b....
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....re question of law which the statutory appellate forum is incapable of examining. 49. The Court is conscious that the Petitioners have relied upon decisions concerning the requirement of a real and effective opportunity of hearing and the consequences of an adjudication undertaken without proper service of notice. Those principles remain undisputed. The question whether those principles were violated in the individual cases, however, depends upon examination of the disputed factual record relating to the respective Noticees. Such examination can appropriately be undertaken by the statutory appellate authority. 50. In these circumstances, the Court declines to examine, at the first instance, the individual procedural objections raised by Mr. Amit Singh and Rahi Systems or the substantive objections raised by Zenlayer to the Orders-in-Original. The Petitioners shall remain at liberty to urge all such grounds before the competent appellate forum. The dismissal of the present petitions on the ground of availability of the statutory remedy shall not preclude the appellate authority from considering such objections in accordance with law. 51. Nothing contained herein shall be co....