Natural justice in customs adjudication requires an effective personal hearing before evidence is relied on and orders are confirmed.

Customs adjudication based on email correspondence and statements recorded during investigation required a meaningful personal hearing, because the revenue case depended on material that had to be tested in adjudication rather than on direct evidence alone. The Tribunal found that repeated adjournment requests and non-attendance did not cure the absence of an effective hearing, and this violated principles of natural justice. It also noted that the relied-upon evidence would need to be established under Sections 138B and 138C of the Customs Act, 1962. The adjudication orders were set aside and the matter was remanded for fresh decision after granting personal hearing.

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Issues: Whether the adjudication orders were vitiated for denial of an effective personal hearing and whether the matter should be remanded for fresh adjudication.

Analysis: The appeals arose from customs adjudication based on email correspondence and statements recorded during investigation, alleging undervaluation and misdeclaration of quantity. The appellants were repeatedly granted hearing dates, but the record showed requests for adjournment and non-attendance on the scheduled dates. The Tribunal held that where the revenue case rested on material gathered during investigation and not on direct evidence alone, the need for effective hearing in adjudication was significant. In these circumstances, the absence of a meaningful hearing amounted to violation of principles of natural justice. The Tribunal also noted that the relied-upon evidence would have to be established in adjudication in terms of Sections 138B and 138C of the Customs Act, 1962.

Conclusion: The adjudication orders were set aside and the matter was remanded to the adjudicating authority for fresh decision after granting the appellants an opportunity of personal hearing.

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