Case Law Details
Dipali Electronics Pvt. Ltd Vs Union of India (Bombay High Court)
In our view, when Petitioner has been accused of having played role in the procurement of electronic systems and parts for manufacture of automated teller machines and Petitioner has been imposed penalty of Rs.Seventy Five Lakhs under Section 112 of the Customs Act, 1962 for its alleged role in the import effected by M/s. Hindustan Engineering Corporation, and Petitioner having challenged those findings in the Appeal, the CESTAT should have specifically dealt with the grounds of challenge raised by Petitioner, and should have given independent findings as regards role of the Petitioner. Not having done so, and in view of the fact that the averment of Petitioner in the Petition that Petitioner was not given notice of hearing, which has not been denied, in our view, in the interest of justice, Petitioner should be given hearing by CESTAT.
We are conscious of the fact that if a party does not turn up, it is not possible for CESTAT to go though the entire Appeal of the party, consider the grounds and pass a detailed order. At the same time, the CESTAT ought to have checked if a party has been properly served before proceeding to hear the matter and pass the order.
In the circumstances, impugned order dated 16th October 2018 (in the prayer clause it is wrongly mentioned as 16th October 2019) is quashed and set aside.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
Petitioner is impugning order dated 16th October 2019 (Actual date of order is 16th October 2018) passed by the Customs Excise And Service Tax Appellate Tribunal (CESTAT), Mumbai rejecting Petitioner’s Misc. Application bearing No.85896 of 2018.
2 Since affidavit in reply has been filed, by consent, we have decided to dispose of this Petition at this stage itself.
3 Petitioner was engaged in the manufacture and selling of various electrical/electronic goods which used to be sold to various domestic buyers and held a small scale industries license in Daman.
4 The Directorate of Revenue Intelligence carried out certain investigation into the imports of Automatic Teller Machines against various parties, and in the course of investigation, searched business and residential premises of Petitioner and its Director and seized certain documents. Petitioner’s statement was also recorded on 29th June 1992 under Section 108 of the Customs Act, 1962. Petitioner received a show cause notice dated 2nd November 1992 alleging that Petitioner had conspired in alleged mis-declaration and undervaluation of Modems imported by one M/s. Hindustan Engineering Corporation.
5 Petitioner responded to the show cause notice and also attended personal hearing.
6 An order against Petitioner came to be passed on 30th November 2007 imposing penalty on Petitioner. Petitioner preferred an Appeal before CESTAT and also applied for waiver of pre-deposit. By an order dated 30th December 2008, CESTAT was pleased to waive the pre-deposit of entire penalty imposed on Petitioner and stayed recovery thereof till disposal of the Appeal.
7 On or about 14th December 2017, after 9 years of Petitioner being granted stay, Petitioner’s Appeal came to be dismissed by an ex-parte order. It is Petitioner’s case that it had never received any notice of hearing, and hence could not attend the hearing before CESTAT. Petitioner immediately filed an application for rectification of mistake before CESTAT. This rectification application came to be rejected by an order dated 16th October 2018 which is impugned in this Petition.
8 Before we proceed further, we have to note that in the affidavit in reply filed by one Prashant G Gawande – the Deputy Commissioner of Customs, on behalf of Respondent, affirmed on 06th March 2020, the fact that Petitioner’s averment that they did not have notice of hearing before CESTAT, has not been denied. Of-course we need to note that this was not one of the grounds that was raised by Petitioner in the Misc. Application.
9 In the Misc. Application, Petitioner sought rectification of order dated 14th October 2017 on the ground, inter-alia, that Petitioner’s grounds in the Appeal have not been recorded or even considered. The order does not even mention in the cause title, Petitioner’s Appeal was heard and there was no independent findings recorded by Tribunal against Petitioner. Petitioner also pointed out to the Tribunal that in the final order it is recorded that Petitioner has not been represented.
10 Mr. Raichandani submitted that in the impugned order it is mentioned that the role of Petitioner in the procurement of electronic systems and parts’ for manufacture of automated teller machines is on record, but then Tribunal should have also considered the grounds raised by Petitioner in the Appeal even in the absence of Petitioner. Mr.Raichandani stated that the Appeal has impugned role attributed to Petitioner in the order originally passed by Commissioner and if Tribunal is going to rely on what Commissioner has recorded, certainly Tribunal should have considered the grounds of Appeal raised by Petitioner.
11 In our view, when Petitioner has been accused of having played role in the procurement of electronic systems and parts for manufacture of automated teller machines and Petitioner has been imposed penalty of Rs.Seventy Five Lakhs under Section 112 of the Customs Act, 1962 for its alleged role in the import effected by M/s. Hindustan Engineering Corporation, and Petitioner having challenged those findings in the Appeal, the CESTAT should have specifically dealt with the grounds of challenge raised by Petitioner, and should have given independent findings as regards role of the Petitioner. Not having done so, and in view of the fact that the averment of Petitioner in the Petition that Petitioner was not given notice of hearing, which has not been denied, in our view, in the interest of justice, Petitioner should be given hearing by CESTAT.
12 We are conscious of the fact that if a party does not turn up, it is not possible for CESTAT to go though the entire Appeal of the party, consider the grounds and pass a detailed order. At the same time, the CESTAT ought to have checked if a party has been properly served before proceeding to hear the matter and pass the order.
13 In the circumstances, impugned order dated 16th October 2018 (in the prayer clause it is wrongly mentioned as 16th October 2019) is quashed and set aside.
14 Consequently, final order dated 14th December 2017 to the extent it is applicable to Petitioner is also quashed and set aside. Appeal No.C/359/2008 filed by Petitioner is restored to file of CESTAT. The CESTAT shall dispose the said Appeal on its own merits and in accordance with law after giving notice of hearing to Petitioner.
15 Petition accordingly stands disposed. No order as to costs.
16 We clarify that we have not made any observation on the merits of the matter and CESTAT can consider the Appeal of Petitioner independently and dispose it in accordance with law.
17 In view of the above, Mr.Raichandani seeks leave to withdraw the Customs Appeal No.13 of 2020 pending in this Court.
18 Hence Customs Appeal No.13 of 2020 is taken up on board for withdrawal though it is not listed on board today.
19 For the reasons mentioned above, Customs Appeal No.13 of 2020 dismissed as withdrawn.
