Confiscation of goods under Customs Act requires prior show-cause notice and adherence to natural justice; failure invalidates orders

The text addresses non-compliance with the principle of natural justice in customs confiscation proceedings, emphasizing that confiscatory orders are drastic and mandate prior issuance of a show-cause notice and a reasonable opportunity to make written representations; failure to do so invalidates such orders. It cites authorities holding that issuance of a show-cause notice in prescribed form is mandatory and that confiscation affects occupational rights, supporting quashing of impugned confiscation and penalty orders for procedural infirmity. The operative legal point is the mandatory statutory and procedural requirement of notice and opportunity before confiscation or penalty.

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Issues involved:
The primary issue in this case is the violation of the principle of natural justice due to the absence of a show cause notice before passing the impugned orders. Another issue is the confiscation of goods without following the mandatory procedure under Section 124 of the Customs Act 1962.

Violation of Natural Justice:
The petitioners, engaged in the manufacture and sale of Electric Scooters, imported goods which were deemed non-compliant with the Bureau of Indian Standards (BIS). The Customs Officer proceeded to pass an Order-in-Original for confiscation without issuing a show cause notice. The petitioners argued that such an approach was against the principles of natural justice, emphasizing the necessity of a show cause notice, response consideration, and a hearing before passing an order with civil consequences. The Court agreed with the petitioners, highlighting the drastic nature of the order and the requirement for strict adherence to natural justice principles.

Mandatory Show Cause Notice under Section 124:
The Additional Commissioner of Customs passed the impugned order-in-original, exercising powers of confiscation and imposing a penalty without issuing a show cause notice as mandated by Section 124 of the Customs Act 1962. This section requires the issuance of a written notice, an opportunity for representation, and a reasonable opportunity to be heard before confiscating goods or imposing penalties. Citing relevant case law, the Court emphasized the importance of following the statutory requirement of issuing a show cause notice in a specified manner, noting that such notice is a mandatory legal requirement.

Judgment:
In light of the above legal principles, the Court quashed and set aside the impugned orders, emphasizing the necessity of following due process and natural justice. The respondents expressed their intention to issue a show cause notice, and the petitioners were granted the option to apply for provisional release of the goods in accordance with the law. The Court disposed of the writ petitions with no costs, keeping all contentions of the parties open for future proceedings.

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