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Judgment
The Court : The primary issue that had arisen and which may have been more relishing to deal with, has become a non-issue today upon the Union accepting that merely because an assessee misses the period of limitation to prefer an appeal, the doors of the writ court would not be closed to such assessee.
On a previous occasion, the Union had sought to rely on a couple of orders of this Court, without any discussion on the subject, that when a person failed to avail of the opportunity of appeal that was available, the grievance that could have been carried in appeal could not be made the subject-matter of a petition under Article 226 of the Constitution. Since there is no discussion in the relevant orders passed by a Division Bench of this Court and the Union does not insist on such objection, nothing more need to be said on such aspect except that the considerations that weigh with a writ court are not the exact considerations that weigh with an appellate authority; in other words, the jurisdiction exercised in appeal is qualitatively different from the authority exercised under Article 226 of the Constitution. Just as even when there is an alternative remedy available to a writ petitioner, the writ court may entertain the same grievance if a question of jurisdiction or blatant disregard of the principles of natural justice or the like is raised, similarly a writ court may entertain a grievance against an order which may have been amenable to an appeal despite the appellate option not being availed whether by choice or upon limitation setting in.
The matter pertains to the import of some metal scrap by the writ petitioner company in financial years 2004-05 and 2005-06. In terms of the similar bonds executed by the writ petitioner company, it was required to furnish end-use certificates within six months of the import or such extended period as may have been allowed by a Deputy Commissioner or Assistant Commissioner of Customs. It is the admitted position that till or about the beginning of 2009, no end-use certificate in respect of the relevant imports of 2004-05 and 2005-06 was furnished.
By a notice dated March 13, 2009, the customs authorities required the writ petitioner company to furnish copies of the bills of entry and end-use certificates pertaining to the goods covered by three several bills of entry of December 7, 2005, December 8, 2005 and January 21, 2006. It appears to be the fairly admitted position that despite receipt of such notice, the writ petitioner company did not respond thereto. At any rate, no end-use certificate pertaining to any of the three bills of entry was furnished by the writ petitioner company. It may be of use to notice that the letter of March 13, 2009 had this to say in its final paragraph:
"Failure to submission of required documents/clarification to the aforementioned query in compliance with the fulfillment of the conditions laid down in the bond may attract actions under Customs Act, 1962."
What followed thereafter were three orders-in-original, all dated March 30, 2009 passed by a Deputy Commissioner requiring the importer company to make payment in accordance with the requirements of the bonds and for interest under Section 28AB of the said Act of 1962. In the body of each of the orders, the liability to pay duty or the authority to demand duty was traced to Section 28 of the Act.
In fact, there was a fourth order-in-original that was passed, but that was in respect of a bill of entry dated December 26, 2005 which was not covered by the notice of March 13, 2009 nor can the Union show that any similar notice in respect of such bill of entry was issued to the writ petitioner company. Indeed, the order-in-original pertaining to bill of entry dated December 26, 2005 was passed on February 20, 2009, several days before the notice of March 13, 2009 was issued.
It appears that the writ petitioner company attempted to prefer appeals against the relevant orders but, by the time such attempts were made, the time to prefer the appeals had passed and the appellate authority had no jurisdiction to condone the delay after the lapse of the statutory period. Upon the right of appeal being irretrievably lost to the present appellant in such circumstances, the four orders were tagged together and made the subject-matter of a petition carried to this Court under Article 226 of the Constitution. The primary contention in the writ petition was that there was no show-cause notice issued as mandatorily required under Section 28 of the Act and the entire process of issuing the four orders-in-original was in breach of the principles of natural justice. It is submitted on behalf of the appellants that in addition to Section 28 of the Act, Section 122A requires an opportunity of hearing to be given to any assessee before an order of adjudication is made. The appellants also refer to the definition of "adjudicating authority" in Section 2 of the Act to indicate that the author of the impugned orders-in-original in the present case had per force to be regarded as an adjudicating authority answering to the description in the definition.
The appellants rely on a judgment reported at 2002 (146) ELT 241 for the recognition by the Supreme Court at paragraph 10 of the report that when the statutory pre-requisite was the issuance of a show-cause notice, such formality had to be complied with or the action taken in derogation thereof had to be disregarded. For the same legal principle, an earlier judgment reported at AIR 1958 SC 86 is placed on behalf of the appellant. Paragraph 11 of the report is clear, particularly, in discussing the authority of quasi-judicial bodies or tribunals in the matter of complying with the statutory pre-conditions before exercising any authority under the relevant provision. The appellants clearly make out a case that in the absence of any show-cause notice the orders could never be passed and, at any rate, since such orders had been passed without reference to the appellant company and the appellant company was denied an opportunity of being heard, such orders have to be set aside without looking at the merits thereof.
The Union contends that the situation was not one strictly covered by Section 28 of the Act in the sense that it was the appellant company which had furnished bonds that it would produce end-use certificates in lieu of the reduced import duty that it paid or in lieu of the waiver of import duty that it obtained. The Union asserts that in such circumstances it was incumbent on the appellant company to furnish the appropriate certificate at the time promised and, though the Union was late in discovering the non-compliance on the part of the appellant company, once the Union issued the notice of March 13, 2009 in respect of the three bills of entry, the appellant company ought to have responded thereto to avoid the orders that ultimately came to be passed.
However, the Union cannot demonstrate that prior to the order dated February 20, 2009 being passed in respect of the bill of entry dated December 26, 2005, there was any notice of any kind that had been issued to the appellant company.
Apart from the perceived non-compliance of the jurisdictional pre-condition on the part of the customs authorities, the appellants point out that the end-use certificates pertaining to all the bills of entry which were the subject-matters of the four orders were ultimately obtained, albeit slightly later than originally contemplated. The appellants submit that it may have been possible for the appellants to demonstrate before the adjudicating authority or the relevant Deputy Commissioner why the end-use certificates could not have been obtained earlier. The appellants say that once the end-use certificate, as issued by a customs official, is available, the misgivings of the customs authorities should be allayed and the benefit of the waiver or reduction of import duty obtained by the appellants should be found to be in order.
Though Section 28 of the Act requires a somewhat formal notice to be issued, indicating the consequences, for the purpose of the present case, the notice dated March 13, 2009, insofar as it relates to the three bills of entry, can be regarded as an appropriate notice. It is evident that bonds were furnished by the appellant company while importing certain materials upon payment of no import duty or payment of a reduced amount on such account. It is also evident that the end-use certificates as promised to be furnished had not been furnished. By the notice, the relevant bills of entry were pointed out and the corresponding end-use certificates were sought. The notice also indicated that in default, action would follow in accordance with the said Act. In substance, all that a show-cause notice was required to do was contained in the said notice of March 13, 2009 despite it not being intituled as a show-cause notice and it not calling upon the noticee to issue a reply by a certain date. The purpose of a notice is to make the noticee aware of a set of circumstances and the consequences of the noticee's action thereupon. Shorn of technicalities and in the absence of there being a statutory form of a show-cause notice, the letter of March 13, 2009 complies with all the conditions of a show-cause notice as may have been necessary in the circumstances.
But where the customs authorities went wrong was in failing to inform the appellant company that an order was to be made if the appellant company did not respond to the notice. Even the relevant authority may have issued a notice that he was about to make an order, calling upon the appellant company to explain its position or afford an opportunity of hearing to the appellant company. That would have complied with the requirement of Section 122A of the Act. What can be seen legitimately to have taken the appellant company by surprise was the making of the order dated February 20, 2009 in one case and the orders of March 30, 2009 in the other cases without any previous notice of such adjudication being issued or any opportunity of hearing in such regard being afforded to the appellant company.
Accordingly, the four orders impugned dated February 20, 2009 in one case and March 30, 2009 in the three other cases cannot be sustained and are set aside. Since no show-cause notice had been issued in respect of the bill of entry bearing the date of December 26, 2005, the demand in respect whereof culminated in the order dated February 20, 2009, a show-cause notice in such regard must first be issued by the respondent authorities to the appellant company before any demand for duty is made. In respect of the three other bills of entry dated December 7, 2005, December 8, 2005 and January 21, 2006, the appropriate Deputy Commissioner will inform the appellant company in writing fixing a date when the matter will be heard when the appellant company may present its version before a final decision is taken.
It will also be open to the appellant company to issue a comprehensive letter to the appropriate official explaining the position, which may be considered by the appropriate Deputy Commissioner upon affording a representative of the appellant company a hearing before any order adverse to the appellant company is made.
For the reasons aforesaid, the judgment and order impugned dated September 22, 2016 is set aside. APO No.51 of 2017 and GA No.1660 of 2018 are disposed of on the above basis.
There will be no order as to costs.