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2024 Supreme(Online)(Del) 33733
IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, Amit Sharma, JJ
BONANZA ENTERPRISES – Appellant
Versus
THE ASSISTANT COMMISSIONER OF CUSTOMS & ANR – Respondent
W.P.(C) 7510/2024
For the Appellants/Petitioners: Mr. Prem Ranjan Kumar
For the Respondents: Mr. Aakarsh Srivastava, Adv Anand Pandey
Proper service of notice is mandatory to ensure fairness in proceedings under the Customs Act.
Headnote:The judgment concerns W.P.
(C) 7510/2024 where the petitioner Bonanza Enterprises sought to quash the impugned Order-in-Original dated 10th November 2022 under Articles 226 and 227. The Court identified procedural lapses in communication concerning the show cause notice and the subsequent hearing which affected the petitioner's rights under the Customs Act. The Court found the impugned order had imposing penalties without proper service of notice. The Court directed the issuance of a fresh show cause notice and hearing for the petitioner. The final order set aside the impugned Order-in-Original dated 10th November, 2022.
| Table of Content |
|---|
| 1. factual background and procedural history surrounding customs duty drawback claims. (Para 2 , 3 , 4 , 5 , 6 , 7 , 8) |
| 2. arguments regarding show cause notice and due process. (Para 10 , 11 , 12) |
| 3. court's observation on proper service and adherence to due process under the customs act. (Para 14 , 15 , 16 , 20 , 21) |
| 4. court's decision to grant a hearing due to procedural violations. (Para 23) |
| 5. final directive on issuing a new show cause notice and hearing. (Para 24 , 25 , 26 , 27) |
CORAM:
JUSTICE PRATHIBA M. SINGH JUSTICE AMIT SHARMA Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
2. The present writ petition under Articles 226 and 227 of the Constitution of India has been filed by the Petitioner-Bonanza Enterprises for quashing the impugned Order-in-Original dated 10th November, 2022, numbered -187/2022/ASSTT.COMMR/EXP./ICD/TKD.
3. The Petitioner is an exporter of readymade garments including printed scarves etc. The case of the Petitioner is that it has been in business since 2001 and it had made certain exports to a Dubai based entity for MMF Printed Scarves by various Shipping Bill Nos. bearing 8869092, 5568084, 8868090, 8868098, 8868094, 8868082 and 8868086 all dated 25th September, 2017 with the total Free On Board (‘FOB’) value of Rs. 3,72,96,859.60/- and total drawback amount claimed as Rs. 36,55,092.25/-.
4. According to the Petitioner, there were certain earlier inspections of the export consignments conducted by the Department of Revenue Intelligence (‘DRI’) at the Mundra Port and representative samples of the export goods were drawn for further investigation and the clearance of goods have been put on hold. The said proceedings was going on with the Department and an Order-in Original was passed pursuant to a Show Cause Notice (‘SCN’) dated 26th March, 2018. The said Order-in Original dated 19th November, 2020 was issued by the Adjudicating Authority, rejecting the contentions of Petitioner and imposing penalty.
5. The said matter was in statutory appeal before the Ld. Commissioner of Customs (Appeals) against the Order-in-Original dated 19th November, 2020 and in the process of those proceedings the Petitioner was informed that the Order-In-Appeal No. CC(A) CUS/D-II/EXP/ICD/TKD/1152 dated 23rd September, 2021 was passed wherein the Appeal was allowed and the Order- in-Original dated 19th November, 2020 was set aside. The said order also set aside the penalties and redemption fine as a relief. In view of the order-in- appeal dated 23rd September, 2021, the Petitioner vide letter dated 29th December, 2021 requested the Respondent No. 2 release the pending drawback and credit the same. The said letter was communicated to the Assistant Commissioner (IGST) and the same was accepted by the competent authority.
6. Thereafter, the Petitioner requested the Office of the Deputy Commissioner of Customs (Recovery) to issue no dues Certificate. However, the Petitioner is stated to have not received any reply. Eventually, the Petitioner received a letter from the Assistant Commissioner (BRC Cell) on 24th March, 2022, requesting submission of export proceeds details in the prescribed format and coordination with their bank for EDPMS updates. Subsequently, the Petitioner obtained certificates from the respective banker certifying the realization and upload of export proceeds from 1st April, 2014 to 31st March, 2018. The said documents were submitted to the Assistant Commissioner, however it is stated that the duty drawback amount remained unpaid.
7. In view of the non-payment, the Petitioner approached the High Court via W.P. (C) No. 10459/2022, leading to multiple hearings and assurances from the Respondent to process the drawback. While the drawback was eventually released, other consequential benefits remained pending, prompting further Court directions and adjournments for compliance.
8. In the meantime, the Petitioner received an Order-in-Original dated 10th November, 2022 wherein the a
