Deemed service under Customs law is rebuttable; penalty based on an unserved notice was quashed for breach of natural justice.

Section 153 of the Customs Act permits service of notices by prescribed modes, including registered post or speed post to the last known address, and the statutory deeming fiction operates only subject to rebuttal. Where the record contained no proof of service in the manner required, no acknowledgement-based delivery evidence, and repeated assertions of non-receipt, the presumption of service was rebutted. An adjudication founded on an unserved show cause notice breached natural justice, so the penalty order could not be sustained and was liable to be quashed to that extent, with fresh proceedings left open in accordance with law.

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Issues: Whether the penalty order was liable to be set aside for want of service of the show cause notice and consequent violation of natural justice.

Analysis: Section 153 of the Customs Act, 1962 prescribes the permissible modes of service and also creates deeming provisions as to when service is taken to have been effected. Service by registered post or speed post under Section 153(1)(b) contemplates dispatch to the last known place of business or residence, and the deeming fiction in Section 153(3) operates only to fix the time of receipt, subject to proof to the contrary. On the facts, there was no material to show service in the manner required by Section 153, no proof of speed post with acknowledgement due, and the petitioner had repeatedly asserted non-receipt of the notice before the authority. The presumption of service was therefore rebutted.

Conclusion: The impugned penalty order was passed in breach of natural justice and was liable to be quashed to that extent. The issue is decided in favour of the assessee.

Final Conclusion: The penalty could not be sustained in the absence of valid service of the show cause notice, though fresh proceedings were left open in accordance with law.

Ratio Decidendi: Where service of a notice is challenged, the statutory presumption of deemed service is rebuttable, and an adjudication founded on unserved notice violates natural justice.

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