Court sets aside order due to procedural flaws, emphasizes legal requirements for fair process.

The Court found in favor of the petitioner, highlighting violations of statutory provisions in the issuance of the show cause notice and order-in-original. It noted the premature issuance of the show cause notice before the mandated consultation period had lapsed, emphasizing the importance of procedural fairness and adherence to legal requirements. The impugned order was set aside, allowing the respondent to commence proceedings anew in compliance with the law. Costs were awarded to the petitioner, and the respondent was directed to file a duly notarized counter-affidavit.

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Issues:
Violation of statutory provisions in issuance of show cause notice and order-in-original.

Analysis:
The petitioner challenged the Order-in-Original dated 25.05.2022, contending that it was based on a show cause notice (SCN) that did not adhere to legal requirements. The petitioner argued that the SCN was issued without the mandatory pre-show cause notice consultation, as prescribed in Section 28(1)(a) of the Customs Act, 1962 and Regulation 3 of the Pre-Notice Consultation Regulations, 2018. The petitioner disputed receiving the pre-consultation notice dated 14.12.2021, emphasizing that even if received, it did not validate the subsequent SCN dated 22.12.2021. The Court noted the obligation on the revenue to serve a notice for pre-consultation, allowing 15 days for written submissions and an option for an in-person hearing. The Court found a legal lacuna in the impugned order due to the premature issuance of the SCN before the statutory timeframe for consultation had lapsed.

The respondent no.2/revenue argued that a consultative letter dated 28.06.2021 was served on the petitioner, followed by a response from the petitioner. However, the petitioner contended that this communication did not comply with the provisions of the 1962 Act and the 2018 Regulations. The Court emphasized the importance of pre-show cause notice consultation to prevent unnecessary litigation and ensure procedural fairness. It highlighted the violation of statutory safeguards in the issuance of the SCN before the expiration of the mandated consultation period, indicating a breach of natural justice principles.

The Court found two main flaws in the impugned order-in-original: non-compliance with the mandatory pre-notice consultation requirement and failure to follow the prescribed procedure for consultation as per the regulations. It noted that the premature issuance of the SCN infringed upon the rights of the petitioner to respond adequately within the stipulated timeframe. The Court set aside the order-in-original dated 25.05.2022, allowing the respondent to initiate proceedings de novo in accordance with the law. The respondent was directed to file a duly notarized counter-affidavit, and costs were awarded to the petitioner as per the prevailing rules.

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