TaxTMI 
TaxTMI 
2018 (7) TMI 1596
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.... of Excise and Customs, New Delhi, Ministry of Finance (Department of Revenue), Government of India, vide Circular No.1053/2/2017- CX, dated 10.03.2017, issued a Master Circular on show cause notice, Adjudication and Recovery - Regarding, in supersession of the previous 89 Circulars. Insofar as the issuance of show cause notice is concerned, it is stated that it is a mandatory requirement according to the principles of natural justice, which are commonly known as audi alteram partem which means no one should be condemned unheard. 4. In respect of personal hearing, at paragraph No.14.3 of the Master Circular, instructions are issued, which read as follows: "14.3 Personal hearing: After having given a fair opportunity to the noticee for replying to the show cause notice, the adjudicating authority may proceed to fix a date and time for personal hearing in the case and request the assessee to appear before him for a personal hearing by himself or through an authorised representative. At least three opportunities of personal hearing should be given with sufficient interval of time so that the noticee may avail opportunity of being heard. Separate communications should be ma....
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....er failed to respond to the show cause notice and has not expressed his wish to be heard in person. In the absence of any request for personal hearing, the statutory provision does not mandate the adjudicating authority to provide personal hearing. In support of his contention, the learned Standing Counsel would rely on the judgments in 2010 (253) E.L.T. 722 (Mad) [Optigrab International vs. Government of India], 2008(221) E.L.T. 496 (Kar.) [Bharath Hospital & Inst. of Oncology vs. Dir.Gen.of Health Services] and 2005(185) E.L.T. 227 (Cal.) [Nellimarla Jute Mills Co. Ltd. vs. Zonal Dir.Gen. of Foreign Trade]. 8. On the other hand, in support of adherence of the principles of natural justice in affording an opportunity of personal hearing, the learned counsel for the petitioner would rely on the following judgments.: "(1) Swadeshi Cotton Mills v. Union of India [1981(1) SCC 664]; (2) JT (India) Exports vs. UOI [2002(144) ELT 288 (Del)]; (3) Alfred Berg & Co.(I)(P)Ltd vs. Cestat, Chennai [2011(273) ELT 373 (Mad)]; (4) Automotive Tyre Manufacturers Association vs. Designated Authority [2011(263) ELT 481(SC)]; (5) Khaitan Chemicals & Fert....
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.... for a personal hearing by himself or through his authorized representatives. At least three opportunities of personal hearing should be given with sufficient interval of time so that the noticee may avail opportunity of being heard. Separate communication should be made to the noticee for each opportunity of personal hearing. From this, it can be inferred that while adjudicating the issues, it is incumbent on the adjudicating authority to provide opportunity of personal hearing, not one, at least three, with sufficient interval of time, so that,the noticeee may avail the opportunity of being heard. The very object of the Master Circular issued by the Central Board of Excise and Customs mandates that the provision of personal hearing is very essential before deciding any issue by a quasi judicial authority. 12. Section 33-A of the Act reads that the adjudicating authority shall give an opportunity of hearing, if the party so desires. The word "shall" employed in the provision envisages the importance of compliance of principles of natural justice. The words "if the party so desires" further exemplify the compulsory requirement of personal hearing by the adjudicating authority, w....
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....n 2010 (253) E.L.T. 722 (Mad) [Optigrab International vs. Government of India], while dealing with the issue of personal hearing in an appeal proceeding, held that the Additional Bench of Customs and Central Excise Settlement Commission examined the application and other connected records and has taken into consideration the reply filed by the appellant therein and decided the issue. In such an appeal proceeding, it is observed that if personal hearing is not given, it could not be said that there was violation of principles of natural justice. More so, the subject matter of controversies/disputes between the parties only impinge upon the interpretation of various Sections of the Customs Act on legal plane and, therefore, no prejudice was caused to the party in not providing opportunity of hearing to its authorised representative. Whereas, in the instant case, a show cause notice was issued by the adjudicating authority to the petitioner and it requires explanation directly by him and in cases of clarification, requires his presence in person to explain the factual issues. The issue decided by this Court in the above said case is with regard to the appeal proceeding and that cannot....
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.... section (4) of Section 10A has to be liberally construed to encompass the cases of renewal of permission as well. 22........... 23.The significance of principle of natural justice was highlighted in the case of Managing Director, ECIL, Hyderabad, Etc. v. Karunakar, etc. (1993) 4 SCC 727. Though, it was a case of disciplinary enquiry against an employee, the rationale given justifying the furnishing of enquiry report and giving an opportunity to meet, explain and controvert the same would apply here as well, as would be clear from the following passage in that judgment. "The reason why the right to receive the report of the Inquiry Officer is considered an essential part of the reasonable opportunity at the first stage and also principle of natural justice is that the findings recorded by the Inquiry Officer form an important material before the disciplinary authority which along with the evidence is taken into consideration by it to come to its conclusion. It is difficult to say in advance, to what extent the said findings including the punishment, if any, recommended in the report would influence the disciplinary authority while drawing its conclusions.....
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.... this case can be countenanced even in the present matter. When he is aware of the requirement of giving a personal hearing before a adverse order is passed, then, the impugned order shows either a uncalled for or undue enthusiasm which could safely be termed as arrogance as well. We do not approve of such a hasty course and, therefore, proceed to quash and set aside the impugned order. The refund claim of the petitioners shall be now decided in accordance with law meaning thereby after hearing the petitioners and giving them an opportunity of producing the relevant material and a reasoned order shall thereafter be passed by the authority and uninfluenced by the earlier action. All contentions on merits of the claim of refund are kept open. The petitions are allowed. No costs. Our order and directions does not mean that we have adjudicated the claim of refund and that the authorities are oblige to grant it." 22. Likewise, a Division Bench of this Court in a batch of Writ Appeals in W.A(MD).Nos.234 to 240 of 2015 [G.V.Cotton Mills (P) Ltd., Vs. The Assistant Commissioner (CT), Avarayampalayam Assessment Circle, Coimbatore] dated 16.03.2018, has held as under:- "Denial of....