Legal principle

A cryptic, non-speaking adjudication order that reiterates a previous order without application of mind or cogent reasons violates principles of natural justice, and such violation permits writ interference under Article 226 notwithstanding the availability of an alternative appellate remedy.

Court decision

The Court allowed the writ petition and set aside the Order-in-Original dated 10.07.2025 (Annexure-A), remitting the matter back to the Additional Commissioner for reconsideration afresh in accordance with law, thus deciding in favour of the petitioners.

Facts

Veetech Infoline Pvt. Ltd. (VIPL), a 100% EOU under the STPI scheme, held a private bonded warehouse licence (No. 531/2000 dated 14-11-2000) under Sections 58 and 59 read with Section 65 of the Customs Act, 1962, and had imported capital goods duty free and procured goods indigenously without payment of duty, bonding them at its Bengaluru premises. On information that VIPL had let out the duty-free imported capital goods on rent to four companies without payment of duty, Customs Preventive officers visited and verified the premises on 08-07-2010, found the warehousing permission had expired with no de-bonding applied for under Section 61, and detained the goods under a mahazar. A show cause notice dated 25.05.2011 demanding duty of Rs.36,88,280/- culminated in an Order-in-Original dated 21.02.2012 confirming the demand, which was upheld in appeal (30.10.2014) but set aside by CESTAT on 27.01.2025, remitting the matter for de novo adjudication. In the de novo proceedings, after the petitioner's detailed reply of 13.06.2025, the Additional Commissioner passed the impugned Order-in-Original dated 10.07.2025 reiterating the earlier order, holding goods valued at Rs.2,19,94,694/- liable to confiscation under Sections 111(j) and 111(o), confirming duty of Rs.36,88,280/- under Section 72(1)(a) read with the Central Excise Act, and imposing penalties on VIPL and its Managing Director under Section 112(a) and (b).

Key provisions

• Section 72(1)(a), Customs Act, 1962 — Goods improperly removed from warehouse, etc
• Section 112(b), Customs Act, 1962 — Penalty for improper importation of goods
• Section 71, Customs Act, 1962 — Goods not to be taken out of warehouse except as provided by this Act
• Section 61, Customs Act, 1962 — Period for which goods may remain warehoused
• Section 111(o), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 58, Customs Act, 1962 — Licensing of private warehouses
• Section 59, Customs Act, 1962 — Warehousing bond
• Section 65, Customs Act, 1962 — Manufacture and other operations in relation to goods in a warehouse
• Section 69, Customs Act, 1962 — Clearance of warehoused goods for export
• Section 68, Customs Act, 1962 — Clearance of warehoused goods for home consumption
• Section 67, Customs Act, 1962 — Removal of goods from one warehouse to another