Speaking order requirement under Customs law: failure to address defence submissions led to quashing and remand.

Penalty orders under the Customs Act were held unsustainable where the adjudicating authority failed to consider the noticees' written defence and supporting material. A quasi-judicial order must be a speaking order and must address the reply filed by the parties; a bare statement that the record was perused is insufficient. The omission to deal with the defence was treated as a breach of natural justice. The penalty orders were quashed and the matters remanded for fresh adjudication after consideration of the defence submissions and grant of personal hearing.

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Issues: Whether the penalty orders passed under the Customs Act, 1962 were vitiated for failure to consider the petitioners' defence submissions and for want of a speaking order, warranting quashing and remand.

Analysis: The petitioners' detailed written defence was not dealt with in the impugned orders, which largely reproduced the show-cause notice and recorded no meaningful findings on the reply and supporting material. A mere recital that the authority had perused the record does not satisfy the requirement of a speaking order. A quasi-judicial adjudication must consider and answer the defence raised by the noticee, and omission to do so amounts to breach of natural justice.

Conclusion: The penalty orders were quashed and the matters were remanded for fresh adjudication after considering the defence submissions and after granting personal hearing.

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