2009 (1) TMI 223 - AT - Customs

Advance License Violation of the conditions duty free import diversion of goods - . The submission of the appellants is that although they had not filed any reply to the show-cause notice they were represented before the Commissioner who initially had taken up the case for adjudication in June 2005, they did not receive any notice of hearing before the Commissioner who passed the impugned order on 16-11-2007 and filed a reply to the show-cause notice only on 3-12-2007, that is, after the impugned order was passed. In this circumstance they submit that the orders suffers from the contravention of principles of natural justice and that the reply is required to be taken into consideration accepting the submission of the appellant, CESTAT remanded the matter for passing fresh order.

Summary

Issues:
Violation of principles of natural justice in passing the impugned order without giving the appellants an opportunity to be heard.

Analysis:
The case involved an application for waiver of pre-deposit of duty amounting to Rs. 4,76,95,795 confirmed against M/s. Sandip Exports for violation of conditions for duty-free import under advance licenses. Additionally, penalties of Rs. 2,25,00,000 on M/s. Sandip Exports and Rs. 25,000 on Shri Sandip Agarwal were imposed. The appellants contended that they were not given a chance to respond as they did not receive any notice of hearing before the Commissioner who passed the impugned order. They argued that the order suffered from a contravention of principles of natural justice and that their reply filed later should be considered before confirming the duty or imposing any penalty.

The Joint Commissioner of Central Excise, Customs, and Service Tax left the decision to the Bench, acknowledging that the notice of hearing for October 2007 was sent but returned undelivered. It was also confirmed that the impugned order was sent to the appellants but returned undelivered. The Tribunal accepted the appellants' submission regarding the violation of principles of natural justice and set aside the impugned order. The case was remanded for a fresh decision to the Commissioner, who was directed to consider the reply filed by the appellants on 3-12-2007 and provide a reasonable opportunity for a hearing before passing fresh orders. The appeal was allowed by way of remand, with instructions for expeditious disposal of the case.

As a result of setting aside the impugned order, the detention notice issued to the appellants for holding the goods was lifted pending the fresh decision. Two miscellaneous applications filed by the company and its director were allowed, along with the stay applications. The decision was dictated and pronounced in open court by the Vice-President and Member of the Appellate Tribunal CESTAT, Chennai.