Case Note & Summary
The petitioner, Shri Bipin Badani, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court challenging an order-in-original dated 6 June 2017 passed by the Commissioner of Customs, Pune. The order demanded differential customs duty of Rs.2,45,83,219/- under Section 28 of the Customs Act, 1962. The background of the case involves a show cause notice issued on 29 March 2000, following which the petitioner approached the Settlement Commission. The Settlement Commission initially admitted the application on 20 February 2001 but later rejected it on 17 October 2003 on the ground of lack of jurisdiction. The petitioner challenged this rejection in Writ Petition No.2 of 2004 before the Bombay High Court, which by order dated 21 July 2005 remitted the case to the Settlement Commission, holding that the Commission had jurisdiction. The Revenue appealed to the Supreme Court, which dismissed the appeal on 19 August 2015, but granted the petitioner three months to approach the Settlement Commission, failing which the rejection order would stand revived. The petitioner failed to approach the Commission within the stipulated time, leading to the revival of the rejection order. Consequently, the Revenue proceeded with the adjudication, resulting in the impugned order-in-original. The petitioner contended that the impugned order was passed in violation of principles of natural justice as he was not provided an opportunity to cross-examine the persons whose statements were recorded during investigation. The respondents raised a preliminary objection that the petitioner had an alternative remedy of appeal under Section 129A of the Customs Act before CESTAT. However, the court held that since the order involved a breach of natural justice, the writ petition was maintainable. The court examined the provisions of Section 138B of the Customs Act, which deals with the relevancy of statements, and found that the denial of cross-examination was a serious procedural irregularity. The court quashed the impugned order-in-original and remitted the matter back to the Commissioner of Customs for fresh adjudication, with a direction to provide the petitioner a reasonable opportunity of being heard, including the opportunity to cross-examine the witnesses.
Headnote
A) Customs Law - Principles of Natural Justice - Right to Cross-Examination - Section 138B, Customs Act, 1962 - The petitioner was denied the opportunity to cross-examine persons whose statements were recorded during investigation, which is a fundamental breach of natural justice. The court held that such denial vitiates the proceedings and the order-in-original is liable to be quashed. (Paras 1-3, 6-7) B) Customs Law - Alternative Remedy - Maintainability of Writ Petition - Section 129A, Customs Act, 1962 - Although an alternative remedy of appeal before CESTAT exists, the court entertained the writ petition as the impugned order involved a breach of principles of natural justice, which is an exception to the rule of alternative remedy. (Paras 2-3) C) Customs Law - Settlement Commission - Jurisdiction - The Settlement Commission had initially rejected the petitioner's application for lack of jurisdiction, but the High Court and Supreme Court held that the Commission had jurisdiction. The petitioner failed to approach the Commission within the time granted by the Supreme Court, leading to revival of the rejection order. (Paras 4-5)
Issue of Consideration
Whether the impugned order-in-original passed by the Commissioner of Customs is liable to be quashed on the ground of breach of principles of natural justice, specifically the denial of opportunity to cross-examine persons whose statements were recorded during investigation.
Final Decision
The impugned order-in-original dated 6 June 2017 is quashed and set aside. The matter is remitted back to the Commissioner of Customs, Pune, for fresh adjudication in accordance with law, after providing the petitioner a reasonable opportunity of being heard, including the opportunity to cross-examine the witnesses.
Law Points
- Principles of natural justice
- Right to cross-examination
- Section 138B Customs Act
- 1962
- Alternative remedy not a bar when breach of natural justice
