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2016 (4) TMI 408 - HC - Customsseeking release of seized goods - Waiver of right to be given a SCN under Section 124(a) of the Act - Non-issuance of SCN under Section 110(2) of the Customs Act 1962 for over six months and also no adjudication order passed in next six months - Department contended that petitioner made a statement that I do not want any show cause notice and any personal hearing and matter may be decided on merit in my absence , therefore, it is contended that there was no requirement to give a SCN to the petitioner within six months - Held that - despite the waiver by the petitioner of the right to be given a SCN in terms of Section 110(2) of the Act, no adjudication order was passed for a period of one year after the seizure. The Petitioner could, therefore, not be bound by such waiver after the expiry of the time limit under Section 110(2) of the Act. In such circumstances, there was no justification for the respondents to continue to detain the goods seized - Therefore, it is directed that the goods seized be forthwith released unconditionally to the petitioner and this will, however, not preclude the respondents from proceeding under Section 124 of the Act ad passing an adjudication order in accordance with law. - Decided in favour of petitioner
Issues Involved:
1. Validity of waiver of the right to be given a Show Cause Notice (SCN) under Section 124(a) of the Customs Act. 2. Obligation of the Customs Department to pass an adjudication order within a reasonable period and the consequences of failing to do so. Issue-wise Detailed Analysis: 1. Validity of Waiver of the Right to be Given a Show Cause Notice (SCN) under Section 124(a) of the Customs Act: The petitioner, M/s. Shiv Shakti Trading Company, sought the unconditional release of seized goods, arguing that no SCN was issued within the stipulated six months under Section 110(2) of the Customs Act. The Customs Department contended that the petitioner's sole proprietor had waived the right to an SCN during an investigation. The court examined whether such a waiver was valid. It referred to Section 124 of the Customs Act, which mandates that no order confiscating goods or imposing penalties can be made without giving the owner a notice in writing, an opportunity to make a representation, and a reasonable opportunity of being heard. The proviso allows for oral notices and representations at the request of the concerned person, implying that a waiver is possible. The court cited the Supreme Court's decision in Commissioner of Customs, Mumbai v. Virgo Steels, which held that the right to notice under Section 28 of the Act is personal and can be waived. Similarly, in the context of Section 124, the court concluded that the waiver by the petitioner was valid, provided it was made voluntarily and not under duress. 2. Obligation of the Customs Department to Pass an Adjudication Order within a Reasonable Period and the Consequences of Failing to Do So: The court emphasized that the Customs Department must pass an adjudication order within a reasonable time after the seizure of goods, even if there is a waiver of the right to an SCN. The court referred to several precedents, including Jatin Ahuja v. Union of India, which held that the time limit under Section 110(2) for issuing an SCN is mandatory. If no SCN is issued within six months or the extended period, the seized goods must be released unconditionally. In the present case, the Customs Department failed to pass an adjudication order for a year after the seizure, despite the petitioner's waiver. The court found this delay unjustified and held that the petitioner could not be bound by the waiver after the expiry of the time limit under Section 110(2). The court directed the unconditional release of the seized goods to the petitioner, while allowing the Customs Department to proceed under Section 124 and complete the adjudication without a specified time limit. Conclusion: The court concluded that the waiver of the right to an SCN under Section 124(a) is valid if made voluntarily. However, the Customs Department is obligated to pass an adjudication order within a reasonable period. Failure to do so within the stipulated time frame necessitates the unconditional release of the seized goods, although the Department may still proceed with adjudication under Section 124. The petition was allowed, and the seized goods were ordered to be released unconditionally to the petitioner.
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