Show cause notice requirement in customs assessments: a query memo cannot replace proper notice and hearing before adverse action.

In quasi-judicial customs assessment proceedings, a query memo is only a preliminary departmental communication and cannot substitute for a proper show cause notice. The affected party must receive notice of the allegations and a fair opportunity to respond in writing and be heard before any adverse decision is taken. Because the Department had not followed that procedure, the remand for fresh decision was justified and was upheld.

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Issues: Whether a query memo could be treated as a substitute for a show cause notice in customs assessment proceedings, and whether the remand order on the ground of absence of notice was sustainable.

Analysis: A query memo is only a preliminary communication used in the course of departmental processing and does not by itself satisfy the requirement of a proper show cause notice. Assessment proceedings are quasi-judicial in nature, and the person affected must be put on notice of the allegations and given a fair opportunity to meet them through a written reply and hearing. Since the Department had not followed the proper procedure before deciding the matter, the remand made by the lower appellate authority was justified.

Conclusion: The query memo could not replace a show cause notice, and the order remanding the matter for fresh decision was upheld. The appeal was dismissed.

Ratio Decidendi: In a quasi-judicial customs assessment proceeding, a query memo does not dispense with the requirement of a proper show cause notice and opportunity of hearing before an adverse decision is taken.

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