2021 (3) TMI 439 - HC - Customs

Maintainability of petition - alternative remedy of appeal present or not - Import of branded goods in the name of fictitious entities - Misdeclaration and undervaluation - rejection of request for cross examination of the witness - petition dismissed on the ground that there is no acceptable explanation given by the appellant for not having resorted to the alternate remedy of filing an appeal before the Customs Excise and Service Tax Appellate Tribunal - import of such imitation stones on monetary consideration - Levy of penalty - whether order is violative of Article 21 of the Constitution of India? - violation of the principles of personal hearing (natural justice) or not HELD THAT - The outcome of the investigation was that Mr.Zahir Hussain was the actual owner of the goods imported by M/s.Abi Sathiya Enterprises and Mr.Zahir Hussain in connivance with the appellant and Mr.T.Suresh had imported branded glass chatons in the guise of artificial stones by grossly under invoicing the value of the consignment by misusing IECs issued in the name of M/s.Abi Sathiya Enterprises. Similar is the outcome of the investigation in the other case as well - The reply given by the appellant has been dealt with by the adjudicating authority from paragraph 80 of the Order-in-Original No.640 of 2012 and from paragraph 40 of the Order-in-Original No.639 of 2012. In the reply/representations which the appellant had sent he has not been specific as to why he requires cross examination because the appellant has not brought out any independent facts or evidence as his defence to the allegation made against him in the show cause notice. The reply is a bald denial of the entire allegations stating that the appellant is not involved in the import of the said items - during the course of investigation and while considering the entire matter the Adjudicating Authority has been able to bring out the facts as to how the appellant has impersonated himself opened bank account in the name of a fictitious person remitted customs duty by effecting cash payment in dummy bank accounts opened in the name of an Enterprise and one Shri Rakesh Upadhaya. Therefore the facts and circumstances of the case would clearly show that the request for cross examination is devoid of merits lacks bonafide and rightly denied by the Adjudicating Authority. The appellant would seek to argue that the proceedings are vitiated on account of mala fide. If this is the case of the appellant then there should be specific allegation against the named officers against whom he alleges mala fide or bias. Admittedly no such officer has been made a party to the writ petition. Therefore the plea of mala fide exercise of power has to be definitely rejected. The request made by the appellant to cross examine few of the co-noticees who were also involved in the transaction was rightly denied by the Adjudicating Authority and no prejudice has been caused to the appellant on the said ground. The reasons assigned by the Adjudicating Authority to deny cross examination taking note of the factual situation is well founded. That apart the other co-noticees have not retracted their statements rendered by them under Section 108 of the Act which is binding - the order passed by the Adjudicating Authority does not suffer from any error of law for interfering with the same. Appeal dismissed.

Summary

Issues Involved:
1. Maintainability of the writ petitions due to the availability of an alternate remedy.
2. Violation of principles of natural justice and fair play.
3. Denial of the request for cross-examination.
4. Allegation of mala fide action by the Department.

Issue-wise Detailed Analysis:

1. Maintainability of the writ petitions due to the availability of an alternate remedy:
The appellant challenged the dismissal of the writ petitions by the Single Bench on the grounds of not availing the alternate remedy before the Customs, Excise and Service Tax Appellate Tribunal. The Court noted that the writ petitions were entertained since 2013, and it would be harsh to relegate the appellant to file an appeal before the Tribunal after seven years. The Court emphasized that the pleadings were complete, and the respondent/Department had filed a counter affidavit. Therefore, the Court decided to take up the matter on merits rather than relegating the appellant to the alternate remedy.

2. Violation of principles of natural justice and fair play:
The appellant contended that the initiation of proceedings was in violation of natural justice principles, and he was not an importer but was implicated based on mala fide actions by high-ranking officials. The Court observed that the Adjudicating Authority had thoroughly analyzed the factual position and the role of the appellant in the transaction. The appellant's request for cross-examination was considered and denied by the Adjudicating Authority, who observed that the appellant had no intention of defending the charges but to cast aspersions on DRI. The Court agreed with the Adjudicating Authority's findings and held that the denial of cross-examination was justified based on the appellant's conduct and the factual matrix.

3. Denial of the request for cross-examination:
The appellant argued that the denial of cross-examination violated principles of natural justice. The Adjudicating Authority pointed out that the appellant did not honor summons, did not participate in the investigation, and absconded. The Authority concluded that the request for cross-examination was a ploy to delay the adjudication process. The Court agreed, noting that the appellant had not provided any independent evidence or facts to support his defense. The Court found that the denial of cross-examination was well-founded and did not prejudice the appellant.

4. Allegation of mala fide action by the Department:
The appellant alleged that the proceedings were vitiated due to mala fide actions by the investigating agency and the Department. The Court rejected this plea, noting that there were no specific allegations against named officers, and no such officers were made parties to the writ petition. The Court emphasized that the plea of mala fide exercise of power must be supported by specific allegations and evidence, which were absent in this case.

Conclusion:
The Court concluded that the Adjudicating Authority's order did not suffer from any error of law. The writ appeals were dismissed, and the orders passed by the Adjudicating Authority were confirmed. The Court held that the denial of cross-examination was justified, and no prejudice was caused to the appellant. The allegations of mala fide actions were also rejected due to the lack of specific allegations and evidence. Consequently, the connected miscellaneous petitions were closed.