AMBER ANIRUDDHA MUFTI Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) Rule; with the consent of Counsel for the parties returnable forthwith. With the consent of Counsel and at their request the Petition is taken up for hearing and final disposal. The petition is directed against an order of the Commissioner of Customs (Appeals) calling upon the petitioner to effect deposit of Rs. 7.50 lakhs; this order having been passed on an application for waiver of pre-deposit under Section 129E of the Customs Act, 1962.

(2.) In pursuance of a notice to show cause dated 20 September, 2010, an order of adjudication has been passed against the petitioner on 30 March, 2012 imposing a penalty of Rs. 15 lakhs under Section 114 of the Customs Act, 1962. The allegation against the petitioner is that he was involved in a fraudulent export of fabric and ready made garments of inferior quality by grossly inflating the value of the export goods so as to avail of duty drawback or, as the case may be, DEPB benefits. Upon the passing of the order of adjudication, the petitioner has filed an appeal before the Commissioner (Appeals) and sought a waiver of the pre-deposit of the penalty imposed. By a notice dated 27 August, 2012, the petitioner was granted an opportunity of a personal hearing on the application for stay on 10 September, 2012. By a communication dated 7 September, 2012, a copy of which has been placed on record during the course of hearing, the Advocate for the petitioner had sought a postponement of the personal hearing on the ground that he was preoccupied in a part heard petition before this Court on the date of hearing that was fixed. The Commissioner (Appeals) relied on a circular of the C.B.E. & C. dated 30 March, 1999 which states that the grant of a personal hearing on a petition for stay would be more of an exception than the rule and that while there would be no irregularity if a stay petition is disposed of without a personal hearing, nonetheless a reasoned order should be passed in an objective manner. After adverting to the provisions of Section 129E, the Commissioner of Customs (Appeals) has indicated only the following reasons in support of the direction for the deposit of an amount of Rs. 7.50 lakhs;

(3.) The Supreme Court, in a decision in Union of India v. Jesus Sales Corporation, 1996 83 ELT 486 , construed the provisions of Section 4M of the Import & Export (Control) Act, 1947. The Supreme Court held that under the second proviso to Section 4M, no appeal could be entertained unless the amount of penalty has been deposited. Hence, the power which was conferred by the third proviso to grant a dispensation of pre-deposit on grounds of undue hardship being a discretionary power was held as being by way of an exception. The Supreme Court held that an order passed after taking into consideration the points raised in the appeal or in the application shall not be held to be invalid merely on the ground that no personal hearing was afforded. The decision took note of the fact that while Section 4M(2) requires the Appellate Authority to furnish a reasonable opportunity of being heard if the appellant so desires, such a requirement could not be read impliedly in the third proviso of sub-section (1) which deals with the disposal of stay applications. At the same time, the Supreme Court emphasized that the discretion ought to be exercised objectively after taking into consideration all the relevant facts and circumstances while considering whether the deposit of penalty should be dispensed with and if so, unconditionally or subject to condition: