Violation of principles of natural justice in case goods confiscated without providing an opportunity to importer to call the grounds for valuation

SYSKA LED Lights Pvt. Ltd. Vs Union of India (Bombay High Court)

Conclusion: Since the respective authority had confiscated the imported goods without providing an opportunity to importer to call upon the proper officer to disclose the grounds for valuation , therefore, the impugned order in original was clearly unsustainable in law being in violation of the principles of natural justice as well as the statutory provisions.

Held:  Assessee-company was primarily engaged in the business of import and manufacture of light products. It had imported smart plugs which were used for extension socket purposes and since the same did not generate any wi-fi or bluetooth signal, assessee claimed that no import licence from the Wireless Procurement Cell was required. Assessee also got the product tested to certify that the technical features of the product did not fall under licensing requirement. Assessee was directed to pay the differential duty along with applicable interest under section 28AA of the Customs Act, 1962.  Respondent had confiscated the imported goods under section 111(m) of the Customs Act but gave an option to assessee to redeem the confiscated goods upon payment of redemption fine under section 125 of the Customs Act, and penalty under section 112(a) of the Customs Act. While an opportunity of personal hearing was granted through video conferencing, notice in writing under section 124(a) of the Customs Act was given to assessee before passing the impugned order in original. It was held that  the proper officer was required to formulate the grounds on which he entertained a doubt in writing and to furnish them to the importer.  The importer had no opportunity to call upon the proper officer to disclose the grounds because the record would indicate that after the importer submitted a letter dated 25 February, 2013, the Deputy Commissioner of Customs proceeded to dispose of the case by passing the impugned order, dated 19 March 2013.  By failing to inform the importer of the grounds of his doubt and of allowing the importer an opportunity of being heard with reference to those grounds, there has been a clear breach of principles of natural justice. Where there is a breach of principles of natural justice, existence of an alternate remedy of appeal would be no bar to exercise of jurisdiction under Article 226 of the Constitution of India. Moreover, the mere existence of an appellate remedy, it is well settled, would not remedy a breach of the principles of natural justice at the original stage. The impugned order in original was clearly unsustainable in law being in violation of the principles of natural justice as well as the statutory provisions.

FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT

Heard Mr. Prithviraj Choudhari, learned counsel for the petitioner and Mr. Pradeep S. Jetly, learned senior counsel for the respondents.

Please become a Premium member. If you are already a Premium member, login here to access the full content.