Disposed

M/s. Zeta International v. Additional Commissioner of Customs and another

Telangana HC22 Jan 2025WP/1637/2023

Case brief

AI extract

What is this about?

Exporter challenged confiscation of printed circuit boards and enhancement of penalty from Rs.1,00,000 to Rs.1,00,00,000 under an Order-in-Original. The High Court declined to decide merits given the statutory appeal, but directed the appellate authority to entertain the appeal without dismissing it as delayed and permitted pre-deposit based only on the original lower penalty.

What did the court decide?

Appeal permitted within three weeks without delay dismissal; pre-deposit limited to Rs.1,00,000; pending appeal No.S/12/2022-Cus to be heard together.

M/s. Zeta International Vs Additional Commissioner of… — Customs and Excise | Telangana HC (2025)

¶1

t3437 1

¶2

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction)

¶3

WEDNESDAY ,THE TWENry SECOND DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE

¶4

PRESENT

¶5

THE HONOURABLE THE ACTING CHIEF JUSTICE SUJOY PAUL AND THE HONOURABLE DR. JUSTICE G.RADHA RANI

¶6

WRIT PETITION NO: 1637 0F 2023

¶7

Between:

¶8

H No.4ele, 1st Ftoor, Kishan Garh Vasant Kunj, New $j?r,i?i%X)3,national,

¶9

AND

¶10

...PETITIONER

¶11

1 Additional^{commissionerof_ customs} and another, office of the^princioar Commissioner of Customs cST Bnavan, l.e. Sii;iil;'ii:,:ro, e;.il";[#ff] Hyderabad - 500034

¶12

1. Principal Commissioner of Customs, and Central Tax (Appeal-l), GST Bhavan, Vllth Floor, Lal Bahadur Stadium Road, Basheer Bagh, Hyderabad - 500004

¶13

...RESPONDENTS

¶14

Petition under Articre 226 ot rhe constitution of India praying that in the circumstances stated in the affidavit fired therewith, the High court may be pleased to issue a writ or order more particurarry one in the nature of writ of certiorari or any other writ setting aside the order in originar No. 11st2022-Adjn cus ADC dated 31r10t2o22 passed by the Respondent No.'r as being arbitrary, illegal, unreasonabre, in vioration of the principres of naturar justice and being violative of Petitioners fundamental rights under Articles 14, 19,21 and constitutional right under Articre 3004 of the constitution of rndia and pass such other order or orders in the interest of justice as this Hon'ble court deems fit and proper. lt is further prayed that a writ or order or more in the nature of mandamus or any other writ directing the Respondent No.2 to decide the appear No_ 5712022- cus. in a time bound manner and issue a writ or order in the nature of mandamus or any other writ directing a departmentar inquiry to be conducted against the Respondent No. 1 for abusing the powers and non-compriance of raw_

¶15

lA NO: 1 OF 2023

¶16

Petition under^lSection 151 CPC^praying that^{in the circumstances statedin} the affidavit filed in support of the^petition, the^{High Court maybe pleasedto} suspend the order in Original No.^{11512022-Ad.inCus ADC dated3111012022} passed by the Respondent No. 1.

¶17

lA NO: 2 OF 2023

¶18

Between:

¶19

The Additional^{rlommissioner} of Customs^{and another,Office r:f the Principal} Commissioner^,:f Customs GST Bhavan, L-B- Stadium^{Road,Basheerbagh,} Hyderabad - 50C034

¶20

Piincipal Commissioner of Customs, and^{Central Ta1 (Anpeal-l),GST} Bhavdn, Vllth Floor, Lal Bahadur Stadium Road,^{Basheer Bagh, Hyderabad-} 500004

¶21

...PETITIONER/RESPONDENTS

¶22

AND

¶23

M/s. Zeta lnternational, H-No.49/9, 1st Floor, Kishan Garh Vasant^Kunj,New Delhi -1 10070

¶24

..,RESPONDENT/WRIT PETITIONER

¶25

Petition under {}ection 151 CPC^praying that in the circumstances^statedin the affidavit filed in support of the^petition, the High Court^{maytre pleasedto} vacate the orders dated 0210212023 in lA NO.1/2023 in WP No.16l]7/2023ⁱⁿ the interest of^justice

¶26

Counsel for the Petitioner: SRl. CHINMAYA SETH FOR Ms. l. MYTRI

¶27

Counsel forthe Respondents: SRI A. RAMAKRISHNA REDDY

¶28

The Court made the following: ORDER

¶29

THE HONOT'RABLE THE ACTING CHIEF JUSTICE SUJOY PAUL AND

¶30

THE HONOURABLE DR. JUSTICE G.RADHA RANI

¶31

WRIT PETITION No. 1637 of 2o23

¶32

ORDER lOrall: (I'er the llon'ble the A(xuLg ClLrcl Justice. Su.log Paul)

¶33

Sri Chinmaya Seth, learned counsel for the petitioner and Sri A.Ramakrishna Reddy, learned counsel for the respondents.

¶34

This writ petition filed under Article 226 of the Constitution assails the Order-in-Original No.lI5l2022Adjn Cus ADC, dated 31.1O.2O22 (Annexure P1), whereby the iearned authority has passed the following order:

¶35

"iii) I reject the value of Rs. 1,28,86,4 10/- declared for 19136 pieces of Printed Circuit Boards in respect of export goods under the Shipping Bill Nos.6808152, 6806389 both dated 09.09.2019 and 6873498 dated 12.09.2019, under Rule 8 of the Customs Valuation (Determination of value of Export Goods) Rules, 2O07 ald I re-determine the r,alue o[ 3 I,050 pieces as Nil (Rs.0/-) of Printed Crrcuit Boards seized under Panchanama dated 16,O9.2O19 in respect of export goods covered under the Shipping Bill Nos.68O8152, 6806389 both dated O9.O9.2O19 and 6873498 dated

¶36

¶37

12.O9.t',O19. under Rule 6 of Customs V.tluation (Deternrination of value of export goods) Rules, 2O07;

¶38

(ii) I orrler for absolute conhscation of the 3 1 ,050 pie,:es of Cir<:uit Board, seized under Panchanama dared 16.O9.i:,O19 in respect of export goods covered under^r he Shipping Bill Nos. 6808152, 68063U9 both da:cri 09.O9.2OI9 and 6873498 dated 12.09.2019 unrier Section 113(h) and 113(i) of the Customs Act, 1962; ard

¶39

(iii) I irr.pose a penalty of Rs. 1,OO,OO,O0O/- (Rr.Lpecs C,ne crorc C)nly) on M/s. Zeta International undcr sectron 114(iii) of the Customs AcL, 1962."

¶40

Brief facts for adjudication of this matter as p,rojected by the pe1.ilioner are that the petitioner filed thr( re \rhite shipping bills for export of Printed Circuit Boarcls (l:'}CBs) to Dubai, n'hic:h u,ere examined by the officers of Air- Cargo, Customs, l{yderabad, and LET Export Order dated 12.O2.2O 19, was passed.

¶41

4 . Based on some intelligence input received by the Directorate ,:f Revenue Intelligence (DRI), Hyderabe d Zonal Unit, that the alleged goods were of substandard quality and were hlghly inflated, the said consignment was requested to be examined.

¶42

¶43

On 16.O9.2O19 (Annexure R5 with rejoinder), the consignment was examined by the DRI, uide panchanama dated 16.09.2019. The Chartered Engineers on the same day examined 19 1 36 pieces in the consignment at the behest of DRI officers so as to ascertain the nature of the PCBs. After examination of the goods, the same were seized by the DRI uide order dated 16.09.2O19 under Section 110(1) of the Customs Act, 1962.

¶44

6 . The petitioner was served^."vith show cause notice dated O5.03.2O2O by the Joint Director, DRI New Delhi The petitioner preferred representations dated 28.O8.2O2O and 04.09.2020 (Annexures P6 and P7) and requested to provide additional documents r.l.hich n,ere relevant for the purpose of adjudication of the matter.

¶45

On 74.O9.2O2O, tL,e petitioner submitted a detailed interim reply to the show cause notice and asked for permission to cross-examine the Chartered Engineers, who conducted the valuation and submitted the report thereof

¶46

¶47

dated 16.09.20L9.^{lt \ Ias also prayed for cross exartrinatton} of Panchas^{,rf the panchanama dated 16'09 2019'}

¶48

On 22.12.2O2O,^{personalhearing was granted to the} petitioner ard it^{specifically reiteratedits request for cross-} examinatiort of the^{Chartered Engineers and the l)anchas'} On 31.12.i'.O2O, Order-in-Original^{was passed rrnd the} va-lue of 3 i05O^{PCBssought to be exporteduncier shipping} bill u,as rejected^{and held to be NILThe goc'dsq'ere} absolutely confiscated^{and penalty of Rs' 1,00,0C0/-u'as} imposed upon the Petitioner.

¶49

g . Aggrierved, the^{petitioner preferred anaprpealon} O5.O3.2O21 against^{the aforesaid Order-in Origiral dated} 31.12.2O2O before^{respondent No.2.}

¶50

iO. Respcrndent No.2,^{on21.06'2021,set aside the} impugned Order-in-Originai^{and directed the} "ruthority below to consicler the^{matter afresh in accordanceu'ith the} principles of natural^justice.

¶51

In turn, on 26.11.2021,^{respondent No.l treld that} the matter u'as examined^{afresh and declined the pral-er of}

¶52

)

¶53

i l I I i

¶54

the petitioner^{seeking cross-examinationof the Chartered} Engineers^{and Panchas'}

¶55

The petitioner,^{against the aforesaid order' filed a} second appeal^{before respondentNo'2 on 24'O22022'Tlle} petitioner was^{given a personalhearing beforerespondent} No.1 on 12.05.2022^{in the Order-in-Originalproceedings'} The petitioner informed^{the authoritythat its appeal is} pending consideration^{before theappellate authority} against the^{order dated 26'71'2021' But' thesaid} authority did^{not agreewith the petitioner's request and} after granting^{personalhearing on 15 07 '2022} '^{passed the} impugned Order-in-Original^{dated 3|'IO'2O22'whereby} the penalty^{of Rs.1,OO,0O,OO0/-(ten times of the penaltyin} Order-in-Original^{dated 3l} '12^{'2O2O\ was imposed on the} petitioner.

¶56

Learned^{counsel for the petitioner submits that when} the petitioner's^{appeal against the order dated26'll'2021} was pending consideration,^{in all fairness' the authority} should. have^{waited for the outcome of the said appeai'} However, the authority^{had decidedthe matter in the same}

manner and^{lvithout assigning adequate reasonsas to why} the Chartered^{Engineers and Panchasshould not be} examined,^{passed the imPugned} permitted trt be^cross Order-in-Original.

¶61

Learned counsel^{for the petitioner submitst hat the} facts and cit'cumstances^{on the strength of u'hicht'he first} Order-in Original^{\ ras passed remained the samerthenthe} impugned Order-in-Original^{waspassed' Thtrs, the} imposition of^{higher penalty is shockingly disproportionate,} uncalled for and unwarranted.^{Learned counsel for the} petitioner further submits that^{in view of the aforesaid} factual backdrop and^{judgments of the Delhi High (lourt in} Ashish Ban.sal v. Principal^{Commissionerof Customs} (Preventivel (W.P (C) No.6855/2022^andCM APPL.No.2OB62 I 2022, dated^{17.03.20231and Mohammed} Akmam Uddin Ahmed^{v.CommissionerAppeals} Customs and Central Excise^{(W.P(C).No. 1242} l2O,).2^{&' CM} APPL.No.3f>12 512022,^{dated 28.04.2023, the petitioner may} be permitted to assail the Order-in-Original^{be ore the} appellate a,uthority, but the^{petitioner may notbe}

¶62

¶63

compelled to deposit the statutory amount before the appellate authority

¶64

Sri A.Ramakrishna Reddy, learned counsel for the respondents, opposed the prayer and urged that the imposition of penalty of Rs.1,O0,00 ,OOO /_ is in accordance with law and cannot be said to be harsh and excessive. However, he fairly admitted that the petitioner has a statutory alternative remedy to assail the Order_in Original.

¶65

16 We have heard the pa_rties at length.

¶66

17 . This is not in dispute that there exists a statutory alternative remedy to the petitioner. This is also not in dispute that based on the same fact situation in the Orderin-Original dated 31.12.2O2O, penalty imposed was Rs. 1,O0,O00/ , whereas in the second Order_in_Original it is enhanced to Rs.l,OO,OO,OOO/-. The Delhi High Court in Ashish Bansal (supra) opined as under:

¶67

"9. Considering that the petitioner has a remedy of appea,l before the Customs Excise and Service .I.ax

¶68

¶69

Appellrrte Tribunal (hereafter^'Tribunal'), u'e do not consider it apposite to examine the pelitioner's challer-rge to the impugned order in this petition. However, gi',,en thc mrrnner in which Lhe penalty has been compu ted ancl the financial condition of the petitioner, u,e consider it apposite to direct the Tribunal to consider the petitioner's appeal without any pre-deposit."

¶70

The similar view is taken in the judgrnent of Mohammed Akmam Uddin Ahmed (supra).

¶71

In tl-rjs view of the matter, we deem it pr:oper to dispose of this ,!,rit petition with the following directions

¶72

i) 'lhe petitioner may prefer an appeal ag:rinst the impugned Order-in-Original dated 31.1O.2022 r,vithin three weeks from today. If the zrppeal is prelerred within the aforesaid tinre, the zrppellate authority shall consider and rlecide it on merits and shall not dismiss it on the EJround^{of delay;}

¶73

ii) Oonsidering the fact that the petitioner suffered zr penalty of Rs. 1,00,000/- in the previous round, which is enhanced to Rs. 1,0O,011,000/ -, in the peculiar factual backdrop of this matter, \

¶74

¶75

we deem it proper to permit the petitioner to pre-deposit on the basis of the penalty of Rs. 1,00,00O/- before the appellate authority. However, this will not have any effect on merits of the matter and the appellate authority will be free to decide the appea-l on its own merits. iii) If the petitioner undertakes the aforesaid exercise of hling the appeal within the aforesaid time and deposits the amount as stated above, the learned appellate authority shall make endeavour to decide the appeai expeditiously.

¶76

ir) If the petitioner's Appeal No.ST 12O22-Cus against the order dated 26.),1.2021 is pending before the appellate authority, the appellete authority may hear both the matters together and decide them in accordance with law.

¶77

With the aforesaid and without expressing any opinion on,merits, the writ petition is disposed of. There shall be no order as to costs

¶78

¶79

Interloc:utory^{applications,if any pending, shall stand}

closed.

Sd/.T. JAYASREE

ASSI GIS

//TRUE COPY//

OFFICER

To,

l.TheAdditionalCommissionerofCustomsandanother,officeofthePrincipal Commissioner^{ot customl'"Cs"iani"'",L g stadi'm Roacl' Basheerbagh'} Hvderabad^- 500034

¶87

z rtJ"p?i'.?Ipri''c-#missioner^{of Customs,and.C^entral Tax (Appeal-l)'.GST} - B't;";;. Vilt, ioot rar 6anaour siioium'noaa, Basheer Baqh' Hyderabad - 500004

¶88