Tadano India Pvt. Ltd. vs Union of India

On the earlier Writ Petition, namely, Writ Petition No. 11808/2013, this Court had passed an order dated 28-3-2014 and which is in the following terms:-

"1. Mr. Jetly, appearing on behalf of the respondent, on instructions, states that the respondent will follow the due process of law, inasmuch as the notice to show cause would be issued demanding duty and penalty after the investigations are concluded. In view of this clear statement made on instructions, as also affirmed in the affidavit, we are of the opinion that the Writ Petition is premature. In view of this statement made and which is affirmed on oath in the affidavit in reply, Mr. Kantawala seeks leave to withdraw the Writ Petition.

Leave granted. Writ Petition is dismissed as withdrawn."

We categorically recollect as to why Mr. Jetly, Advocate, appearing on behalf of the Respondents in Writ Petition No. 11808/2013 (earlier Writ Petition) which was filed by the present Petitioner No. 2 in this Court, made the statement on instructions. The apprehension of the Petitioners then and even now is that the Respondents will not follow the due process of law. They would not call upon the Petitioners to show cause as to why the duty should not be paid by the Petitioners and thereafter, pass a reasoned order either confirming the demand or dropping it. In addition, if the demands are confirmed the penalty would be imposed.

There was an affidavit filed by the Respondent in the earlier Writ Petition which contained a specific statement and assurance to this Court that the compliance will be made with the Rule of Law.

Now, the apprehension of the Petitioners was that without such compliance the Authorities approached the Federation of Indian Chambers of Commerce and Industry (for short "FICCI") and lodged the demand so that the amount which was secured by FICCI as a Guarantor would be duly paid to the Authorities.

The explanation given now on affidavit is that the approach to the FICCI was not to get over the orders passed by this Court, but it is only to secure the demand and within the time frame. The explanation given is that the Authorities approached the FICCI within the period specified as otherwise it could be understood that they have no claim. The dodging of the claim/making of demand within the period of limitation, namely, of one year and to secure the Revenue''s interest, was bona fide intent. At no stretch did the Respondents avoid compliance with the due process of law.

An additional affidavit has been filed by the Petitioners wherein they point out as to how the Joint Commissioner of Customs, SUB (Import) addressed the letter dated 4-4-2014, copy of which is at page 31 of the petition paper book and followed it by another letter dated 25-6-2014 at page 35. The additional affidavit now annexes a copy of the letter dated 25-8-2014 from the office of the Commissioner of Customs (Import), Special Investigation and Intelligence Branch (SUB), informing the Petitioners as under:-

"Subject:- Closing of ATA Carnet in respect of crane imported and cleared duty free under Customs Exemption Notification No. 157/90 - Reg. Please refer to your letter of Nil No. dated 7-8-2014, duly signed by Authorised signatory, on the above mentioned subject. In this regard it is informed that,

(1) Since, FICCI is an umbrella body and guarantor for all the ATA car-net imports, so from the Department''s point of view, it was necessary to apprise FICCI about the issue and it was a call by the FICCI to pay the duty to ensure that its position as a Guarantor doesn''t get eroded.

(2) Your contention that you won''t get an opportunity of Hearing Side show cause notice is vague, since SCN is in the process of issuance. After the issuance of show cause notice, you will get an opportunity for having your say.

(3) The Duty paid by FICCI can''t be construed as duty payment by the importer M/s. Tadano India Private Ltd., as FICCI has paid the duty as a Guarantor to safeguard its reputation.

This issues with the approval of Commissioner of Customs (Import)."

We find clearly that paragraph 2 of this letter would show that the Respondents have not shown due respect and regard for the orders of this Court. Rather they insisted that there was no necessity of issuing any show cause notice. They have directly approached the Guarantor and in the garb of securing the revenue, they ensured the full payment of duty. That is why there is justification as to why the FICCI made the payment.

We are not satisfied with this state of affairs. When there is a court order and which records the statement and undertakings to this Court that the compliance will be made with the due process of law, then, we do not see any justification for a show cause notice not being issued till date. It may be that the demand or claim was required to be lodged with the Guarantor (FICCI) within a stipulated time frame, but that has no connection or nexus with the compliance with the Rule of Law and particularly the orders of this Court. In such circumstances we find that the compliance has not been made.

It is only because of persuasion of Mr. Rao that we do not carry the matter any further or else we would have called upon the concerned officers of the Respondents and particularly the Deponent of the affidavit filed on 8-9-2014 as to why the proceedings for not complying with the orders of this Court be not initiated against them. By merely cautioning them that hereafter such conduct will be viewed seriously that we dispose of this Writ Petition with a direction that if within a period of ONE WEEK from today a show cause notice is not issued to the Petitioners the legal rights of the Respondents shall stand forfeited thereafter without any further extension being granted by this Court.

At this stage, Mr. Rao submits that the ad interim order passed on this Writ Petition be vacated. Whereas, Mr. Sen submits that if that is vacated the Petitioners would be a in precarious position. Meaning thereby, there are no proceedings presently pending and yet, the goods would not be in possession of the Petitioners and would be lost to them completely. In such circumstances Mr. Sen prays that first of all if physical verification and inspection of the goods is needed, that can always be done without effecting seizure of the goods.

After hearing both sides on this point we are of the opinion that the Respondents are to issue a show cause notice and comply with the provisions of law. Equally if they are empowered to seize the goods they will have to comply with the law. If the provisions of law enable them to seize the goods, then, they must comply with such provisions and procedures prescribed therein before effecting seizure. If the law contemplates release of the goods after such seizure even that opportunity should be given to the Petitioners. Needless to state that in all such events the Respondents shall comply with the provisions of the Customs Act, 1962 and the requisite Rules thereunder. The Writ Petition is, accordingly, disposed of. No costs.