IPC Packaging Company Pvt Ltd Vs Additional Commissioner of Customs (Karnataka High Court)
The Karnataka High Court has overturned a customs duty demand of over Rs. 1 crore and the confiscation of goods valued at Rs. 4.79 crore against IPC Packaging Company Pvt Ltd. The court’s decision, issued on October 29, 2015, found that the Additional Commissioner of Customs, Inland Container Depot, Bangalore, violated principles of natural justice by issuing an ex-parte order.
IPC Packaging Company Pvt Ltd contested the demand on the sole ground that they were not given adequate opportunity to present their case. The company’s factory had been taken over by banks under the SARFAESI Act on April 15, 2015. Notices for personal hearings, scheduled for October 6, 7, and 8, 2015, were reportedly received through a watchman. The company, through its counsel, submitted a reply on November 13, 2015, asserting that export obligations, which exempted them from customs duty, had been fulfilled and providing supporting evidence. However, the customs authority issued the ex-parte order on October 29, 2015, prior to considering this reply.
The court, after hearing arguments from both sides, concluded that the customs authority acted in “hot haste” without providing the petitioner a reasonable timeframe to present their defense and verify evidence. The court criticized the practice of quasi-judicial revenue authorities acting rashly, emphasizing that while revenue collection is essential, it must adhere to legal principles, including natural justice.
