2020 (4) TMI 388 - AT - Customs

Tribunal Overturns Customs Penalty Due to Ineffective Notice Service

Surinder Khanna Versus Commissioner of Customs (Import)

The Tribunal set aside an Order-in-original confiscating goods and imposing penalties under the Customs Act, 1962, due to ineffective service of show ... Absolute Confiscation - penalty - fact of SCN not recorded - HELD THAT:- As the fact of service of show cause notice is not recorded in the impugned order, this Tribunal directed learned AR to file evidence of issue and service of show cause notice dated 25.09.2015, issued by the Additional Director General, DRI, DZU, New Delhi. As per the report dated 03.06.2019 issued by the office of DRI, the show cause notice was served on one Shri Rohit Bhasin, who is said to be authorised by the appellant Shri Surinder Khanna to receive the show cause notice, at Karol Bagh - As per the copy of receipt issued by Rohit Bhasin dated 25.09.2015, it is stated that he has received the notice on behalf of the appellant who has authorised him, as he is outside India. However, no such authorisation has been given nor Revenue has taken any other steps for service of notice. There is no effective service of show cause notice on the appellant. Further, the impugned order has been passed without any jurisdiction. For assuming the jurisdiction to pass an adjudication order, service of show cause notice is must, as provided in law - In the present case, there is no proper authorisation neither Rohit Bhasin is a relative of the appellant, nor there being any proper authorisation to receive the show cause notice - Accordingly, the impugned order is set aside so far as this appellant is concerned - Appeal allowed - decided in favor of appellant. Issues: Effective service of show cause notice, Jurisdiction of passing adjudication orderThe judgment pertains to an appeal against an Order-in-original passed by the Commissioner of Customs, absolutely confiscating goods valued at Rs. 7,04,000 under Section 111(d) of the Customs Act, 1962, and imposing penalties on the appellant and others. The Tribunal noted the absence of recorded satisfaction of service of show cause notice in the ex-parte order and the lack of reply or written submission from the noticee. The impugned order mentioned fixing multiple personal hearings, but the fact of service of the show cause notice was not recorded. Consequently, the Tribunal directed the learned Authorized Representative to provide evidence of issue and service of the notice. The report indicated that the notice was served on an individual authorized by the appellant to receive it, but no proper authorization was presented, and no further steps for service were taken by the Revenue. The Tribunal emphasized the necessity of proper service of show cause notice for jurisdiction to pass an adjudication order, ultimately concluding that there was no effective service of notice on the appellant, rendering the impugned order passed without jurisdiction. As a result, the impugned order was set aside concerning the appellant, who was deemed entitled to consequential benefits as per the law.The judgment highlights the critical legal requirement of effective service of show cause notice for the jurisdiction to pass an adjudication order under the Customs Act, 1962. It underscores the significance of proper authorization and the necessity of following due process in serving notices to parties involved in customs proceedings. The Tribunal's decision emphasizes the fundamental principles of natural justice and procedural fairness, ensuring that individuals subject to adjudication orders are given an opportunity to respond and defend themselves adequately. By setting aside the impugned order due to the lack of effective service of notice, the Tribunal upholds the rule of law and the principles of administrative justice, safeguarding the rights of appellants in customs matters. This judgment serves as a reminder of the procedural safeguards and legal requirements essential for maintaining the integrity and fairness of adjudication processes in customs cases, thereby promoting transparency and accountability in administrative decision-making within the customs framework.