HARESH NAGINDAS VORA Vs. UNION OF INDIA

JUDGEMENT

(1.) Rule returnable forthwith. Respondents waive service. By consent of the parties and at their request, taken up for final hearing. As common question of law and facts arise, we dispose of both these petitions by this common judgment.

(2.) The principal prayer in the present petitions is a challenge to the constitutional validity of Sec. 129E of the Customs Act,1962 (for short 'the Act'), as amended by the Finance Act No.2 of 2014 and brought into effect from 6 Aug. 2014, prescribing a mandatory predeposit for filing an appeal before the Tribunal or the Commissioner (Appeals). The petitioners also challenge the common Order in Original dated 22 Jan. 2016 passed on the show cause notice dated 24 Aug. 2015, on the ground that the order is illegal being passed without considering the submissions of the petitioners. Briefly the facts are:

(3.) The petitioners in each of the petitions are partners of one M/s. Bright International which is stated to be engaged in the business of export and import of goods. The genesis is, a search conducted at the premises of M/s. Bright International by the Directorate of Revenue Intelligence (DRI) wherein large number of dubious invoices were recovered. The scrutiny of those invoices revealed that there were parallel invoices for various exports made by the partnership. Further scrutiny revealed that in 29 cases, one invoice indicated actual contract value and the other invoice indicated higher value which is used for availing undue duty drawbacks. It was also revealed that in the case of export of 71 shipping bills, some of the items exported were of the same value as mentioned in the actual value invoices recovered during search. The statements of both the partners of the firm were recorded under Sec. 108 of the Customs Act who admitted recovery of parallel invoices for the same goods exported by them. The partners also conceded that the invoices of higher value were submitted to the Customs at the time of export to avail higher duty drawback and the actual invoice is the one with the lesser value. Accordingly, a show cause notice dated 24 Aug. 2015 was issued to the petitioner which was adjudicated by the impugned Orders-in-Original dated 22 Jan. 2016/ 1 Feb. 2016. The adjudicating officer concluded that the value of the goods exported through ICD Mulund was intentionally misdeclared in the documents submitted to the Customs to avail ineligible duty drawback thereby violating Sec. 50(2) of the Customs Act. It was held that the goods exported in 63 consignments as listed in Annexure A and B to the order with declared value of Rs. 11,51,26,266/- and redetermined value of Rs. 7,23,20,450.00 were liable for confiscation under Sec. 113(i) of the Customs Act and that the firm was liable for penal action under Sec. 114(iii) and the partners petitioners herein were liable for penal action under Sec. 114(iii), as also a penalty under Sec. 114AA of the Customs Act. Accordingly the adjudicating officer passed the following order: ORDER