Natural justice in customs penalties requires effective notice, document disclosure, and hearing; joint penalty without separate attribution fails.

Customs penalty proceedings must comply with mandatory natural justice: the person proceeded against must receive effective notice of the grounds, access to the relied-upon documents, and a real opportunity to respond and be heard. Where notices remain unserved, publication requirements are not properly shown, and personal hearing is denied, the adjudication is vitiated and cannot stand. A joint penalty on two persons without separately attributing liability to each was also treated as unsustainable. The penalty order was set aside and the matter remanded for fresh adjudication after disclosure of documents, time to reply, and personal hearing.

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Issues: (i) Whether the penalty order was vitiated for non-service of show cause notice, non-supply of relied-upon documents, and denial of personal hearing, thereby violating the mandatory requirements of natural justice under the Customs Act. (ii) Whether the Collector could validly impose a joint penalty on two persons under the Customs Act and the Gold (Control) Act.

Issue (i): Whether the penalty order was vitiated for non-service of show cause notice, non-supply of relied-upon documents, and denial of personal hearing, thereby violating the mandatory requirements of natural justice under the Customs Act.

Analysis: Section 124 of the Customs Act requires that no penalty or confiscation be ordered unless the person concerned is informed of the grounds and given a real and substantial opportunity to represent against the proposed action. The notices had returned unserved, the later hearing notices were again sent to the same address despite knowledge of detention, and the order did not show compliance with the statutory requirement of proper publication under Section 153. The appellants were thus denied a meaningful opportunity, and the adjudication was ex parte in substance.

Conclusion: The order was invalid for breach of mandatory procedure and principles of natural justice, in favour of the appellants.

Issue (ii): Whether the Collector could validly impose a joint penalty on two persons under the Customs Act and the Gold (Control) Act.

Analysis: The penalty was imposed jointly on two persons without specifying the amount payable by each. A penalty must be clearly attributable to each person liable, and a joint imposition of this nature was treated as a grave irregularity.

Conclusion: The joint penalty was not sustainable, in favour of the appellants.

Final Conclusion: The penalty order against the appellants was set aside and the matter was remanded for fresh adjudication after supply of the relied-upon documents, grant of reasonable time to reply, and affording personal hearing.

Ratio Decidendi: A penalty order under customs law cannot stand unless the person proceeded against is given effective notice, disclosure of the grounds and material relied upon, and a real opportunity of hearing; failure to comply with these mandatory requirements vitiates the adjudication and warrants remand.

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