Mandatory show cause notice and hearing protect penalty orders from invalidation where procedural safeguards are not followed.

Rule 233A of the Central Excise Rules, 1944 required a written show cause notice and a reasonable opportunity of hearing before confiscation or penalty. An alleged waiver by the assessee did not remove the officer's duty to follow that mandatory procedure. An order passed without notice and without hearing violated the prescribed safeguard and the principles of natural justice, so the matter had to be reconsidered after compliance with notice and hearing requirements.

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Issues: Whether an order imposing duty and penalty could be sustained when no show cause notice was issued and no opportunity of hearing was granted, despite the assessee's alleged waiver.

Analysis: Rule 233A of the Central Excise Rules, 1944 made issuance of a written notice and grant of a reasonable opportunity of hearing mandatory before confiscation or imposition of penalty. The waiver letter did not dispense with the officer's obligation to follow the prescribed procedure. Since the order was passed without issuing notice and without hearing the party, it offended the mandatory procedural safeguard and the principles of natural justice.

Conclusion: The challenge succeeded on the procedural ground and the matter was sent back for fresh decision after issuing notice and granting hearing.

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