Natural justice in customs assessment requires notice and hearing before rejecting classification and finalising duty liability

Finalisation of a provisional customs assessment and rejection of the declared classification cannot be sustained where the importer was not issued a show cause notice or granted a personal hearing. Section 122A of the Customs Act, 1962 requires an opportunity of hearing in adjudication proceedings when sought, and the absence of such procedure breaches natural justice, especially where fresh determination of classification and assessment is required. The impugned order was set aside and the matter remanded to the competent authority for a fresh decision after hearing the importer in accordance with law.

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Issues: Whether the finalisation of provisional customs assessment and rejection of the declared classification could be sustained when no show cause notice or personal hearing was granted to the importer.

Analysis: Section 122A of the Customs Act, 1962 mandates an opportunity of hearing in adjudication proceedings when sought by a party. The assessment in question was finalized adversely to the importer without issuance of a show cause notice and without affording a personal hearing. Such a course was held to be contrary to the statutory adjudication procedure and in breach of the principles of natural justice, particularly when the matter required fresh determination on classification and assessment.

Conclusion: The impugned order was not sustainable and was set aside. The matter was remanded to the competent authority for fresh decision after hearing the importer in accordance with law.

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