2018 (10) TMI 571 - HC - Customs

High Court overturns Customs Act penalty, citing lack of natural justice. Appeals restored for reconsideration.

The High Court of Bombay set aside the penalty imposed under Section 112(a) of the Customs Act, 1961 on Customs House Agents for non-compliance with a ... Penalty u/s 112(a) of CA on CHA - non-speaking order - Whether the impugned order of the Appellate Tribunal sustaining the penalty imposed on the Appellant under Section 112(a) of the Customs Act, 1961, is nonspeaking and passed in breach of principles of natural justice? - Held that:- The submission of the Appellant which is the fundamental to their challenge of the order in appeal before the Tribunal, is not considered - The Respondent is not able to show any reason, why the impugned order should be sustained in the above facts. The substantial question of law, is answered in affirmative - impugned order is set aside - Appeal of the Appellants are restored to the Tribunal for fresh disposal after following the principles of natural justice. Issues:Challenging penalty imposed under Section 112(a) of the Customs Act, 1961 based on non-compliance with a public notice issued by the Commissioner of Customs.Analysis:The judgment by the High Court of Bombay involved two Appeals challenging a common order passed by the Customs, Excise and Service Tax Appellate Tribunal. The Appeals questioned the penalty imposed under Section 112(a) of the Customs Act, 1961, based on non-compliance with a public notice issued by the Commissioner of Customs. The substantial question of law in both Appeals was whether the impugned order sustaining the penalty was nonspeaking and in breach of principles of natural justice.The Appellants in both cases were Customs House Agents (CHAs) who were penalized for not complying with the public notice issued by the Commissioner of Customs regarding quarantine clearance and Exim Policy requirements for import of livestock and its products. The Tribunal's order upholding the penalty was challenged on the grounds that all relevant Bill of Entry filings were made before the issuance of the public notice, rendering the penalty unjustified. Despite the Appellants' submissions, the impugned order did not address their contentions, leading to the claim of a nonspeaking order and violation of natural justice principles.Upon review, the High Court found merit in the Appellants' argument that their fundamental submission was not considered in the impugned order. The Court concluded that the impugned order was indeed nonspeaking and in breach of natural justice principles. Consequently, the substantial question of law was answered in the affirmative, leading to the setting aside of the impugned order. The Appeals of the Appellants were restored to the Tribunal for fresh disposal while emphasizing the importance of following principles of natural justice in the process. All contentions were left open for further consideration by the Tribunal, and both Appeals were disposed of accordingly.