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Issues:
1. Liability of custodian for shortage of goods handed over by Customs authorities. 2. Interpretation of Public Notice No. 29/86 conditions. 3. Invocation of Customs Act provisions for recovery of customs duty. 4. Scope of show cause notice in adjudication process. Analysis: 1. The case involved the liability of the custodian for goods handed over by Customs authorities. The appellants received goods in 1993 and returned them in 1996. Subsequently, show cause notices were issued in 1998 alleging shortage of goods. The adjudicating authority ordered recovery of the goods' value and customs duty. The Commissioner (Appeals) upheld the duty demand but found no provision to recover the goods' value under the Customs Act. 2. The appellants argued that the goods were returned without any objection from Customs in 1996, and the show cause notices in 1998 did not specify the Customs Act provision violated. The Revenue contended that the custodian is responsible for any loss per Public Notice No. 29/86 condition 8. However, as no claim of shortage was made upon return in 1996, the demand for customs duty in 1998 was deemed unsustainable. 3. The Customs authorities failed to specify the Customs Act provision breached in the show cause notices. The adjudicating authority invoked Section 45(3) of the Customs Act, while the Commissioner (Appeals) relied on Section 142(2) for duty recovery. Section 142(2) pertains to recovery of sums due to the government through bonds, not applicable in this case as no bond was executed by the appellants. Hence, the duty demand was beyond the scope of the show cause notice. 4. Consequently, the impugned order of the Commissioner (Appeals) was set aside, and the appeals were allowed. The judgment highlighted the importance of clearly specifying the legal provisions invoked in show cause notices and ensuring the adjudication process aligns with the scope of the notice to maintain procedural fairness and legal validity.
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