Natural justice requires notice and hearing before cancellation of customs exemption eligibility certificate.

An eligibility certificate issued for customs exemption on import of medical equipment was later withdrawn for alleged non-compliance with the notification conditions. The High Court held that, because the cancellation was adverse to the holder, the authority was required to issue a show cause notice and afford a hearing before acting. In the absence of prior notice and an opportunity to respond, the withdrawal breached the settled requirements of natural justice and could not be sustained. The cancellation order was therefore liable to be set aside.

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Issues: Whether the cancellation of the eligibility certificate issued for availing customs exemption under Notification No. 64/88-Cus. could be sustained without issuing a show cause notice and without affording an opportunity of hearing.

Analysis: The eligibility certificate had been issued to enable import of medical equipment with exemption from customs duty under the notification. The certificate was withdrawn years later on the ground of non-compliance with the notification conditions. Since the cancellation was adverse to the petitioner, the authority was required to put the petitioner on notice and hear it before passing the order. In the absence of a show cause notice and a hearing, the impugned action offended the settled requirements of fair procedure.

Conclusion: The cancellation order could not be sustained and was liable to be set aside for breach of natural justice.

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