1987 (3) TMI 307 - AT - Income Tax

Appellate Tribunal Upholds Show Cause Notice Timing but Rejects Appeal Due to Natural Justice Violation

The Appellate Tribunal upheld the issuance of the review show cause notice within the legal timeframe but found a violation of natural justice. ... Show cause notice for classification Issues:1. Review show cause notice under Section 131 of the Customs Act.2. Classification of imported rubber bladders.3. Denial of principles of natural justice.Analysis:1. The appeal before the Appellate Tribunal concerned a review show cause notice issued by revenue authorities under Section 131 of the Customs Act. The notice was challenged by the respondents on the grounds of limitation and denial of natural justice. The notice was sent to the respondents who requested the matter to be decided on merits in their absence. The appellants argued that there was no limitation for the review show cause notice under sub-section (3) of Section 131. The dispute involved the classification of imported rubber bladders and the imposition of countervailing duty. The Assistant Collector had rejected the refund claim, which was later accepted by the Appellate Collector, leading to the issuance of the review show cause notice.2. The Tribunal examined the issue of limitation for the review show cause notice under Section 131. It was noted that sub-sections (3), (4), and (5) of Section 131 were relevant. The Tribunal held that in the present case, sub-section (3) applied, and there was no specific limitation mentioned for the issuance of the review show cause notice. Therefore, the Tribunal concluded that the notice was issued within the permissible time frame. However, on the merits of the case, the Tribunal observed a denial of principles of natural justice. The revenue's case relied on a letter from Dunlop India Ltd., dated after the appellate order, without providing the respondents with an opportunity for cross-examination. Due to this denial of natural justice, the Tribunal declined to disturb the order of the Appellate Collector and rejected the appeal.3. In conclusion, the Appellate Tribunal upheld the issuance of the review show cause notice within the legal timeframe but found a violation of natural justice in the proceedings. As a result, the appeal was rejected based on the denial of principles of natural justice, and the Tribunal did not delve into the merits of the case concerning the classification of the imported rubber bladders. The decision was made to maintain the order passed by the Appellate Collector of Customs.