2015 (11) TMI 1459 - AT - Customs

Penalty under section 114(iii) and section 114AA - involvement in inflating the export price and the purchase documents in respect of synthetic fabric being exported under the DEPB scheme with intention to avail the higher incentive - Held that - Granting three consecutive days of hearing i.e. at short intervals of a week or so cannot be considered as the reasonable opportunity afforded to the appellant before deciding the case. Moreover neither the order of the ld.Commissioner nor any evidence is produced by the Revenue showing that the communication of the hearing on 14.01.2013 was duly served to the appellant. In these circumstances we arrive on the conclusion that a reasonable opportunity of hearing was not provided to the appellant before imposing penalty on him and therefore principle of natural justice has been violated by the adjudicating authority. - we aside the order of imposition of penalty on the appellant with the direction that the ld.Commissioner shall decide the case afresh after giving a reasonable opportunity of hearing to the appellant - Decided in favour of assessee.

Summary

Issues:
- Imposition of penalty under sections 114(iii) and 114AA of the Customs Act, 1962.
- Adequacy of opportunity of hearing provided to the appellant.
- Violation of principles of natural justice by the adjudicating authority.

Imposition of Penalty:
The appeal was filed against an order imposing penalties of Rs. 10.00 Lakhs and Rs. 12.00 Lakhs on the appellant under sections 114(iii) and 114AA of the Customs Act, 1962, respectively. The appellant was alleged to have inflated the export price and purchase documents to avail higher incentives under the DEPB scheme. The High Court directed the matter to be tried before the Tribunal, emphasizing the need for a fair opportunity of hearing for the appellant.

Adequacy of Opportunity of Hearing:
The appellant argued that they were not given a reasonable opportunity to present their case before the adjudicating authority. The appellant's representative highlighted the appellant's reasons for non-appearance against the summons. The Tribunal examined the provisions of the Customs Act, emphasizing the requirement to provide a person with a reasonable opportunity before imposing any penalty. It was observed that the three consecutive days of hearing at short intervals did not constitute a fair opportunity for the appellant. Moreover, there was no evidence that the communication of the crucial hearing date was duly served to the appellant, leading to a violation of natural justice.

Violation of Principles of Natural Justice:
The Tribunal concluded that the adjudicating authority had not provided a reasonable opportunity of hearing to the appellant before imposing the penalty, thereby violating the principles of natural justice. The order of penalty imposition was set aside, and the case was directed to be decided afresh by the Commissioner after ensuring a fair opportunity of hearing for the appellant. The appellant was instructed to provide their address for the service of personal hearing letters. The decision was specific to this case and would not impact appeals by other appellants.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT KOLKATA highlights the issues of penalty imposition, adequacy of hearing opportunity, and violation of natural justice, providing a comprehensive understanding of the legal proceedings and outcomes in this case.