By TIOL News Service

MUMBAI, JAN 24, 2018: THE Petitioner, a public sector undertaking (PSU) seeks the following three reliefs viz. Quashing the order dated 28 August 2003; quashing the letter dated 24.08.2017; stay the implementation of the order and letter (supra).

The petitioner, in order to carry on certain production activities, imported automatic machines and paid a provisional duty of Rs.85,26,959/- under heading 98.01 of the Custom Tariff and Project Import Regulations, 1986 and also executed a provisional duty bond of Rs.1,52,50,000/- for differential duty.

It is claimed that the goods were imported for home consumption and certain compliances were to be made but which were not made.

A SCN dated 21st October, 1997 was allegedly issued and the specific claim is that it was not served. No notice of any hearing was allegedly received, nor was the petitioner heard, but an ex parte order came to be passed on 28th August, 2003 denying the benefit of project import and demanding Customs duty.

The petitioner further submits that they did not file any Appeal under the bonafide belief that it is the arm of the Government of India; that being a Government of India Enterprise, it should not indulge in litigation but try and sort out all the issues and problems, particularly of the above nature, in terms of the direction of the Ministries and which direction was then prevailing. [ Oil And Natural Gas Commission -   2002-TIOL-196-SC-CX refers.]

Nonetheless, the petitioner was served with a letter dated 24th August, 2017 by which communication, the petitioner was directed to pay the balance amount. All the more, when the petitioner's request for payment by installments has also been accepted as an exceptional case by the Chief Commissioner of Customs.

The petitioner, therefore, pleads that the correspondences entered by them would save them from the bar of delay and laches and that a sympathetic view should be taken.

The counsel for the Revenue submitted that such a petition, even if filed by a PSU, should not be entertained as that would send down a wrong message for an assessee who, irrespective of plural remedies available under the Customs Act, 1962, will not avail of them deliberately. Furthermore, in the present case the petitions have been filed belatedly after 14 years with the grievance that the order has been passed ex-parte.

The High Court, after considering the submissions, inter alia observed -

"10. … the Customs Department also is partially to be blamed. If it issued a show cause notice in October, 1997, it took six years to pass an order on the same. In the process of adjudication, it issued intermittent notices for appearance to the petitioner. Further, the Department also allowed the petitioner to engage it in correspondence and though an order was passed confirming the duty demanded way back on 28st August, 2003. We have found that save and except a sum of Rs.23,56,548/ paid on 29th March, 2010 and Rs.25,00,000/ on 28th April, 2017, the balance amount of Rs.1,14,05,689/ alongwith applicable interest was not paid. Since the balance amount was not paid even by installments, the recovery proceedings and by coercive means were sought to be initiated."

It is further observed –

"12. To our mind, these are not satisfactory state of affairs even by a PSU. If its financial position is precarious, it could not have held back the dues and which were legitimate, due and payable in terms of an order. Now, we have a request for fresh adjudication into the same show cause notice. We do not deem it fit and proper to extend such facility or grant an opportunity at this belated stage unless the interests of Revenue are secured."

Clarifying that the order should not be treated as a precedent, even for a PSU, the High Court directed the petitioner to pay the differential duty within a period of three months and report complaince, pursuant to which the SCN would be adjudicated afresh on merits.

The petition was disposed of.

(See 2018-TIOL-140-HC- MUM-CUS)