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2014 (12) TMI 767 - AT - CustomsPower of adjournment - Choice of three dates for personal hearing in one letter - Adjudication procedure u/s 122A - Violation of principle of natural justice - Held that - The words give an opportunity of being heard to a party in a proceeding in sub-section (1) of Section 122A of the Customs Act, 1962 make it clear that an opportunity of hearing is to be given to a party. The power of adjournment is given in sub-section (2) of Section 122A of the said Act. Proviso to Section 122A(2) has restricted to such adjournment not more than three times. In the present case it is seen from Para 26 of the adjudication order that an opportunity of hearing was given under Section 122(A)(1) of the Act, 1962 and the applicant requested for adjournment by letter dated 13-10-2013. Thereafter as contended by the learned advocate, personal hearing notice was issued by fixing the date at 16-11-2011 or alternatively at 18-11-2011 which would be taken as one opportunity. The Tribunal in the case of Afloat Textiles (P) Ltd., (2007 (7) TMI 444 - CESTAT, AHMEDABAD) observed that giving a choice of three dates for personal hearing in one letter and seeking of adjournment by the appellant by one month, would not amount to granting of adjournments three times. - Principles of natural justice have been violated by the adjudicating authority, which is in favour of the applicant and therefore, there is no need to look into the other two issues. - Matter remanded back the original adjudicating authority - Decided in favour of assessee.
Issues Involved:
1. Compliance with Section 138B of the Customs Act. 2. Applicability of the Customs Act to a person located abroad. 3. Violation of principles of natural justice. Issue-wise Detailed Analysis: 1. Compliance with Section 138B of the Customs Act: The appellant argued that the adjudicating authority did not comply with Section 138B of the Customs Act, which is similar to Section 9(d) of the Central Excise Act. The appellant cited the decision in J & K Cigarettes Ltd. v. Collector of Central Excise, where it was held that statements made before a gazetted officer are admissible only under specific circumstances, and the authority must form an opinion based on material evidence. The adjudicating authority in the present case failed to form such an opinion or provide supporting reasons to believe the correctness of the statements made during the investigation. Therefore, the reliance on co-noticee statements without proper validation was challenged. 2. Applicability of the Customs Act to a Person Located Abroad: The appellant contended that the Customs Act, 1962, does not apply to individuals located outside India, as the Act extends only to the whole of India. The appellant, residing in Dubai at the time of the alleged offense, relied on the decision in C.K. Kunhammed v. Collector of Central Excise & Customs, which held that actions committed outside India do not fall within the jurisdiction of the Customs Act. The Tribunal in C.K. Kunhammed's case emphasized that the Customs Act does not have provisions extending its applicability beyond India, unlike the Indian Penal Code. 3. Violation of Principles of Natural Justice: The appellant argued that the adjudicating authority violated the principles of natural justice by not providing a reasonable opportunity for a hearing. The appellant's counsel sought adjournments, but the authority proceeded with the adjudication without granting further adjournments. The Tribunal's decisions in Meenakshi Associates (P) Ltd. v. CCE, Noida and Afloat Textiles (P) Ltd. v. CCE, Vapi were cited, highlighting that providing a choice of multiple dates for a hearing in one notice does not equate to granting multiple adjournments. The adjudicating authority's interpretation that three adjournments were granted was incorrect, as only one effective adjournment was given. Separate Judgments: Member (Technical): The appellant was directed to deposit Rs. 25 lakhs within eight weeks and report compliance, with a waiver of pre-deposit and stay against recovery of the balance dues during the appeal's pendency. Member (Judicial): The appellant made a case for waiver of penalty based on the non-compliance with Section 138B, the non-applicability of the Customs Act to a person abroad, and the violation of natural justice. The order was not sustainable, and a waiver of penalty was granted during the appeal's pendency. Third Member (Judicial): The principles of natural justice were violated as the adjudicating authority did not provide a fair hearing. The case was remanded to the original adjudicating authority for a fresh order, ensuring compliance with natural justice principles. Majority Opinion: The impugned order was set aside, and the matter was remanded to the original adjudicating authority to pass a fresh order after observing the principles of natural justice.
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