AGK AGK AGK IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.6134 OF 2008 Khandelwal Laboratories Ltd., ..Petitioner V/s. The Union of India & Others ..Respondents. Mr.Prakash Shah with Mr.Motwani & Mr.J.S. Sanghavi i/by PDS Legal for the Petitioner. Ms.S.V. Bharucha with Mr.A.S. Rao for the Respondents. CORAM : D.K. DESHMUKH & J.P. DEVADHAR, JJ. DATED : 8TH OCTOBER, 2008. P.C. : 1. Rule, returnable forthwith. Heard finally by consent of the parties. 2. By this petition, the petitioner basically challenges the order dated 28-3-2007 passed by the Joint Commissioner, Customs & Excise confirming the demand of recovery of Rs.16,91,677/- from the petitioner and penalty in the same sum. It appears that the petitioner had filed appeal against this order which is provided by the statute, however, that appeal has been dismissed as barred by limitation. The petitioner, therefore, has challenged the original order. The only ground on which the original order dated 28-3-2007 is challenged is that the order has been passed in breach of principles of natural justice. 3. We have heard learned counsel for both the sides. It is common ground that before disposing of the proceedings, the authority is under a duty to grant an opportunity of being heard to the petitioner. So far as the aspect of final hearing is concerned, in para 11 of the order impugned passed by the original authority dated 28-3-2007, following is observed : 11. A personal hearing was granted to the assessee on 26-09-2006, or 27-09-2006 or 28-09-2006. The assessee vide their letter dated 12-09-2006 requested to grant the further extension after 10th of November, 2006. In view of above further personal hearing was granted to the assessee as per their request, on 13-11-2006 or 15-11-2006, but no one appeared on behalf of the assessee". 4. It is clear from the abovequoted portion of the order that according to this order, the final date of personal hearing was 13-11-2006 or 15-11-2006, but nobody appeared on this date on behalf of the petitioner and, therefore, the authority proceeded to decide the matter finally. Perusal of the documents placed on record shows that on 24-11-2006 i.e. after 15-11-2006 which according to abovequoted portion of the authority was final date of hearing, a letter was addressed to the petitioner by the Superintendent of Customs and Central Excise, which reads as under : "Please refer to above subject matter. During the adjudication process, Joint Commissioner, C. Ex. & Customs, Vapi are observed as under : ‘During the adjudication process, you have produced the Cost Accountant’s. On perusal of the said certificate, it has been observed that the certificates are issued covering period up to March, 2000 whereas the present Show Cause Notice has been issued covering period from April 2001 to March 2004. You have paid duty to removals to your sister concern at much higher rates than the cost ascertained as per cost construction method under CAS-4 costing principles. You are also requested to submit the product wise clearances removals to Khandelwal Laboratories Pvt. Limited Wadala for the period 01-04-=2001 to 31-3-2004 within 7 days". 5. By this letter after 15-11-2006, the petitioner was asked to produce product wise clearances removals to Khandelwal Laboratories Pvt. Limited, Wadala for the period 01-04-2001 to 31-03-2004 within 7 days. On 27-12-2007 another letter was addressed by the same authority, the subject of that letter reads as under : Sub. : C. Ex.Personal Hearing in respect of SCN No.V(Ch.30) 3-12/Dem/06 dated 18-04-2006 M/s.Khandelwal Laboratories Pvt.Ltd., Dadra It is para 1, 2 and 5 of that letter, which are relevant. They read as under : In this connection, I am directed to inform you that the Personal Hearing in the above case has been fixed on 12-01-2007 or 16-01-2007 at 11.45 hrs. before Shri.Mithilesh Kumar, Joint Commissioner of Central Excise & Customs, VAPI stationed at 4th Floor, Adarshdham Building, Vapi-Daman Road, Vapi. 2. You are, therefore, requested to remain present at the above address at the above-mentioned date at the specified time for the purpose. 5. You have also submitted the Zerox copy of C.A. Certificate for the year 2000 only. You are therefore, requested to submit C.A. S-34 Certificate for the cost of production of (Captively consumed / Transfer to sister concern) goods as per CBEC Circular No.692/08/2003-CX dated 13-02-2003 for the year 2001-02, 2002-03& 20-03-04 respectively. 6. It is clear from the abovequoted portion of the letter that the matter was to be heard either on 12-01-2007 or 16-1-2007 and before that date the petitioner was required to submit the documents which are mentioned in para 5 of that letter. The petitioner in para 20 of the petition stated thus : "20. The Petitioners personally met the Superintendent (Adj) in 1st week of January 2007 before the date of personal hearing and requested for some time for preparing the CAS - 4 Certificate for all the products for three years. The Superintendent (Adj.) orally assured that since the Petitioners require time to submit that certificates of Chartered Accountant hearing fixed on 12/16-1-2007 would be postponed and a new date of hearing will be given." 7. The Respondents have not disputed what is stated in para 20 of the petition. It is thus clear from what has foregone that the hearing of the matter did not conclude on 15-11-2006 as claimed in the order dated 28-3-2007. The matter was kept for hearing on 12-1-2007 or 16-102007. Therefore, the observations in the order that the final hearing of the matter was on 13-11-2006 or 15-11-2006 is factually incorrect. Perusal of the uncontroverted averments in para 20 of the petition shows that the petitioner has requested for time to produce the documents and he was assured that the time will be granted. It is thus clear from the record that the order dated 28-3-2007 has been passed in violation of principles of natural justice. 8. The learned counsel appearing for the respondents submitted that the petitioner had alternate remedy for challenging that order available and he was also entitled to challenge that order further before the tribunal. However, the petitioner allowed his remedy to be barred by limitation and, therefore, according to the learned counsel for the respondents the writ petition should not be entertained. In our opinion, submission of the learned counsel for the respondents has no merit because the Supreme Court right from the judgment in the case of State of U.P. Vs. Mohammad Nooh reported in AIR 1958 SC 86 has laid down that one of the exceptions to the rule of the High Court requiring the petitioner to exhaust alternate remedy before entertaining the petition under Article 226 is that the action impugned in the petition is violative of principles of natural justice. In other words, if the High Court finds that the order challenged before it is passed in breach of principles of natural justice, then the self-imposed restriction of requiting the petitioner to exhaust alternate remedy does not apply. In our opinion, as we find that the order dated 28-3-2007 has been made in clear breach of principles of natural justice, we cannot decline to interfere in favour of the petitioner only because alternate remedy was available or has been allowed by the petitioner to be time-barred. 9. In the result, therefore, the petition succeeds and the same is allowed. Order dated 28-3-2007 impugned in the petition is set aside. The proceedings are remitted back to the Joint Commissioner, Customs & Central Excise for denovo consideration and decision in accordance with law. Rule is made absolute accordingly. D.K. DESHMUKH, J. J.P. DEVADHAR, J.