2017 (8) TMI 769 - HC - Customs

Court overturns order, cites lack of evidence in serving notice, upholds natural justice. Fresh hearing ordered.

Manvi Exim Pvt. Ltd. Versus The Principal Commissioner of Customs, (Preventive)

The Court set aside the adjudication order due to lack of evidence of proper service of the Show Cause Notice (SCN) on the Petitioner, favoring the ... Restoration of appeal - the Show Cause Notice dated 12th August, 2016 was not received by the Petitioner - Held that: - There were three notices of hearing sent to the Petitioner while the adjudication process was on. These notices dated 2nd February, 20th March and 20th April, 2017 appeared to have been sent by the Department by speed post to the above address. While the Department, in its file, has the postal receipts for dispatch of these notices by speed post, there is no tracking report showing whether, in fact, they were delivered to the Petitioner. Section 153 (a) of the Customs Act, 1962 (‘Act’) mandates the service of a notice, including an SCN, “by registered post or by such courier as may be approved by the Commissioner of Customs”. In the present case, the SCN was dispatched by ordinary post and not by the registered post. Consequently, the Department is unable to satisfy the Court that in compliance with Section 153(a) of the Act, it has, in fact, served the SCN in question on the Petitioner. Consequently, the benefit of doubt in this regard must go to the Petitioner. The matter is restored to the file of the Principal Commissioner of Customs (Preventive), New Customs House, New Delhi, for a fresh hearing of the Petitioner and passage of a fresh adjudication order on merits without reference to the orders that has been set aside by this Court - decided in favor of petitioner. Issues:Challenge to Adjudication Order based on non-receipt of Show Cause Notice (SCN) by the Petitioner.Analysis:The writ petition challenged the Adjudication Order dated 29th May, 2017, arguing that the Petitioner did not receive the Show Cause Notice (SCN) dated 12th August, 2016. The Court directed notice to be issued and acknowledged that the principle of natural justice had not been complied with as the Petitioner claimed no SCN was received. The Customs Department produced documents showing the dispatch of the SCN by ordinary post, but there was no proof of the Petitioner receiving it. Despite the Petitioner's address remaining the same, the SCN was not acknowledged. Additionally, three hearing notices were sent by speed post, but their delivery to the Petitioner was not confirmed. As per Section 153(a) of the Customs Act, the SCN should have been served by registered post or an approved courier, not ordinary post. Due to the lack of evidence of proper service, the benefit of doubt favored the Petitioner, leading to the setting aside of the impugned adjudication order.The Court set aside the adjudication order and restored the matter to the Principal Commissioner of Customs for a fresh hearing and a new adjudication order without reference to the previous one. The Petitioner was instructed to appear for the fresh hearing on a specified date. The Department was directed to provide a complete copy of the SCN and related documents to the Petitioner within a week. The Petitioner's response to the SCN was required by a specified date, and any document inspection requests should be accommodated before the hearing date. The Petitioner was advised against seeking unnecessary adjournments, and the adjudicating authority was instructed to complete the process within three months of the specified date.In conclusion, the petition was disposed of with the above terms, and dasti orders were issued to the parties involved.