2018 (11) TMI 38 - AT - Customs

Principles of natural justice - Prohibition on CHA from working in certain area - Mumbai Customs zones I, II & III - it is the case of appellant that no opportunity was accorded to them to explain their position - Held that - Observing principles of natural justice is the rule, and dispensing it, is the exception to the said rule. Needless to mention the exception could be resorted to only in extraordinary circumstances - the situation is such that the personal hearing if allowed would defeat the very of purpose of directing prohibition, then it should be resorted to. Also, there is no evidence or observation by the learned Commissioner justifying direction of prohibition dispensing with the personal hearing to the appellant. The matter remanded to the adjudicating authority to decide the issues afresh after affording a reasonable opportunity of hearing to the appellant - appeal allowed by way of remand.

Summary

Issues:
- Prohibition order against the appellant by the Commissioner without affording an opportunity of hearing.
- Compliance with principles of natural justice in issuing prohibition orders for Customs Brokers.

Issue 1: Prohibition order against the appellant by the Commissioner without affording an opportunity of hearing.
The appellant, a licensed Customs Broker, filed an appeal against an order prohibiting them from operating in Mumbai Customs zones I, II & III. The order was based on an investigation revealing the involvement of one of the appellant's employees in facilitating undervaluation of goods by an importer, resulting in short payment of duty. The appellant argued that they were not given any notice or hearing before the prohibition order was issued. The Revenue contended that no hearing was necessary before issuing such an order, citing previous judgments. The Tribunal noted that the appellant was not afforded an opportunity to explain their position before the prohibition order was passed, which violated the principles of natural justice. The Tribunal referred to a judgment of the Hon'ble Bombay High Court emphasizing the importance of balancing natural justice with public interest, particularly in cases requiring urgent action. The Tribunal concluded that the prohibition order was issued without justification and set it aside, remanding the matter for a fresh decision after providing a reasonable opportunity of hearing to the appellant.

Issue 2: Compliance with principles of natural justice in issuing prohibition orders for Customs Brokers.
The Tribunal analyzed the requirement of complying with the principles of natural justice when issuing prohibition orders for Customs Brokers. It highlighted that while immediate action may be necessary in public interest cases, the authority must still provide an opportunity for a hearing after passing a temporary order. The Tribunal emphasized that principles of natural justice should be observed as a rule, with exceptions only in extraordinary circumstances where a hearing would defeat the purpose of the prohibition. In this case, the Tribunal found no justification for dispensing with a hearing before issuing the prohibition order against the appellant. Therefore, the Tribunal set aside the order and directed the adjudicating authority to decide the matter afresh after giving the appellant a reasonable opportunity for a hearing, in line with the principles of natural justice.

This comprehensive analysis of the legal judgment highlights the issues raised, arguments presented by both parties, relevant legal principles, and the Tribunal's decision to set aside the prohibition order and remand the matter for a fresh decision after affording the appellant a proper opportunity of hearing.