Mandatory Show Cause Notice required before confiscation; order quashed and matter remitted for fresh consideration.

Absence of a show cause notice prior to a confiscation order under the Customs Act invalidates the order as a procedural infirmity and breach of principles of natural justice; a contested waiver letter did not cure this defect and recent High Court authority treats issuance of a show cause notice as mandatory, leading to quashing of the confiscation order. Disputed factual questions on seizure legality under seizure provisions and whether detention arose from non-declaration or non-payment of duty require fresh consideration. The matter is remitted for reconsideration with directions for the petitioner to file a reply in two weeks, three personal hearings and a final speaking order within twelve weeks; seized goods to be preserved pending final orders.

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Issues: Whether the confiscation order dated 03.06.2024 passed under Section 124 of the Customs Act, 1962 is valid in the absence of issuance of a show cause notice and whether the impugned order must be quashed and remitted for fresh consideration.

Analysis: The undisputed facts include that no show cause notice was issued prior to the confiscation order, a detention receipt recorded non-release due to non-payment of duty, and duty was paid by the petitioner on 02.05.2024. A disputed letter purporting to waive show cause notice is placed on record by the respondents but is contested by the petitioner. Recent authority of this Court has held that issuance of a show cause notice is mandatory prior to confiscation under Section 124 of the Customs Act, 1962 even if a waiver letter is produced. In view of the admitted absence of a show cause notice before the confiscation order, the confiscation order suffers from procedural infirmity and violation of principles of natural justice. Questions regarding the propriety of the seizure under Section 110 and whether detention was for non-declaration or for non-payment of duty involve disputed facts and require fresh consideration by the respondents.

Conclusion: The confiscation order dated 03.06.2024 is quashed and the matter is remitted to the second respondent for fresh consideration. The petitioner is directed to furnish a reply within two weeks and the second respondent shall afford three personal hearings and pass a final speaking order on merits within 12 weeks. The seized goods shall not be disposed of until final orders are passed. This conclusion is in favour of the assessee.

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