Case Law Details
Mahaveer NX Vs Principal Commissioner of Customs (Madras High Court)
In a recent case before the Madras High Court, Mahaveer NX contested an order dated 01.03.2024, primarily on the grounds of a breach of natural justice.
Mahaveer NX is involved in the import and trade of various decorative balloons, classified under Customs Tariff Heading 40169590, with exemption from basic customs duty claimed under relevant notifications. The petitioner asserted that despite a shift in their registered business address to No.137/IAI, Kosappur Road, Theeyampakkam, Madhavaram, they did not receive any notices prior to the issuance of the impugned order. The order in question was served on the petitioner’s customs handling agent.
The petitioner’s counsel highlighted the Importer-Exporter Code (IEC) Certificate issued post the address change, along with a communication dated 10.03.2023, informing the Deputy Commissioner of Customs about the change. It was argued that the impugned order was issued after the Deputy Commissioner received this letter, thus rendering the order invalid. Additionally, it was contended that the order exceeded the jurisdiction of the Principal Commissioner of Customs under Section 124 of the Customs Act, 1962, as it involved the confiscation of goods and imposition of a redemption fine, despite the petitioner having possession of the goods. The invocation of sub-section (4) of Section 28 of the Customs Act was also disputed.
On behalf of the respondent, Mr. K. Mohanamurali, learned senior standing counsel, submitted that the change of address was not communicated to the Principal Commissioner of Customs, Preventive.
The Court examined the IEC Certificate and the letter dated 10.03.2023, both indicating the updated address of the petitioner. However, the impugned order was communicated to the petitioner at a previous address, 111 to 113, Kanniamman Nagar, Annex Vadaperumbakkam, Chennai-600 060. Given that the letter dated 10.03.2023 bore the rubber stamp of the Deputy Commissioner of Customs with the date 13.03.2023 endorsed, the Court found that the impugned order was issued without providing a reasonable opportunity to the petitioner, thereby rendering it unsustainable.
As a result, the Court set aside the impugned order dated 22.02.2024 and remanded the matter to the respondent for reconsideration. The respondent was directed to provide a copy of the show cause notice to the petitioner within one week from receiving a copy of the Court’s order. The petitioner was then granted two weeks to respond to the notice, following which the respondent was instructed to afford a reasonable opportunity, including a personal hearing, and subsequently issue a fresh order within two months from the date of receiving the petitioner’s reply. All contentions were left open to the petitioner.
In conclusion, the Court’s decision underscores the importance of adherence to procedural fairness, ensuring that parties are duly notified and afforded the opportunity to be heard, in line with the principles of natural justice.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order dated 01.03.2024 is assailed inter alia on the ground that principles of natural justice were violated.
2. The petitioner is engaged in the business of importing and trading in various types of decorative balloons. Such goods were imported by classifying the same under Customs Tariff Heading 40169590 and claiming exemption from payment of basic customs duty under applicable notifications. The petitioner states that upon presentation of the bills of entry, the goods were cleared and that no objections were raised even pursuant to an audit in relation to the relevant bills of entry. According to the petitioner, the registered place of business was shifted from the original address to No.137/IAI, Kosappur Road, Theeyampakkam, Madhavaram. Therefore, the petitioner states that no notices were received prior to the issuance of the impugned order. As regards the impugned order, it is submitted that the same was served on the petitioner’s customs handling agent.
3. Learned counsel for the petitioner invited my attention to the Importer-Exporter Code (IEC) Certificate issued after the petitioner’s address was changed. He also referred to the communication dated 10.03.2023 by which the petitioner informed the Deputy Commissioner of Customs about the change of address. By pointing out that the impugned order was issued after said letter was received by the Deputy Commissioner, learned counsel submits that the impugned order is vitiated on that count. Even otherwise, learned counsel submits that the goods imported by the petitioner were ordered to be confiscated and a redemption fine was imposed in relation thereto. Learned counsel contends that this was beyond the jurisdiction of the Principal Commissioner of Customs while exercising jurisdiction under Section 124 of the Customs Act, 1962 (the Customs Act) especially in view of the fact that the petitioner had possession of the relevant goods. Learned counsel also contended that sub-section (4) of Section 28 of the Customs Act was not liable to be invoked in the facts and circumstances.
4. Mr. K. Mohanamurali, learned senior standing counsel, accepts notice for the respondent. He submits that the change of address was not communicated to the Principal Commissioner of Customs, Preventive
5. The petitioner has placed on record the IEC Certificate and the letter dated 10.03.2023. Both these documents indicate the current address of the petitioner. On examining the impugned order, the said order has been communicated to the petitioner at 111 to 113, Kanniamman nagar, Annex Vadaperumbakkam, Chennai-600 060 and not to the address specified in the above mentioned documents. It is also crucial to notice that the letter dated 10.03.2023 bears the rubber stamp of the Deputy Commissioner of Customs with the date 13.03.2023 endorsed thereon. In these circumstances, the impugned order was clearly issued without providing a reasonable opportunity to the petitioner. Hence, the said order is not sustainable.
6. Consequently, the impugned order dated 22.02.2024 is set aside and the matter is remanded to the respondent for reconsideration. The respondent is directed to provide a copy of the show cause notice to the petitioner within one week from the date of receipt of a copy of this order. Upon receipt thereof, the petitioner shall reply thereto within a period of two weeks from the date of receipt of such show cause notice. Upon receipt of the petitioner’s reply, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within two months from the date of receipt of the petitioner’s reply. All contentions are left open to the petitioner.
7. The writ petition is disposed of on the above terms. There will be no order as to costs. Consequently, connected miscellaneous petitions are closed.
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